China Is Building 30,000 Miles of High-Speed Rail—That It Might Not Need

The train system is one of the biggest public works in history, and it’s becoming a giant money pit

By Brian Spegele of The WSJ. Excerpts:

"one of the biggest public works in history, soon to exceed 30,000 miles of high-speed rail"

"It’s becoming a giant money pit. China has spent more than $500 billion on new tracks, trains and stations in the past five years, while the country’s national railway operator, China State Railway Group, is nearing $1 trillion of debt and other liabilities. Just keeping up with its debt requires $25 billion annually."

"China’s population is projected to shrink by around 200 million people in the next three decades. Some of the newest lines are in effect duplicating older ones."

"On a recent afternoon, Fushun Station itself was practically deserted, with around 20 travelers milling about in a cavernous waiting room with seats for 1,000. Another even newer station a few miles up the road was similarly empty."

"China State Railway envisions adding nearly 15,000 miles more by 2035, costing hundreds of billions of dollars."

"high-speed trains are far more costly than alternatives, such as traditional trains or buses, which many economists believe are sufficient for much of the country."

"China State Railway’s liabilities grew to a record of about $860 billion as of September. The total debt tied to China’s rail expansion is even higher, since cash-strapped local governments are being required to bear many of the costs for new projects."

"The rail investments also divert resources away from initiatives such as building a stronger social safety net that economists say China needs to help its aging population and increase domestic consumption over time."

"one of China’s priciest rail projects is taking shape, linking Tibet’s capital of Lhasa with the central city of Chengdu in Sichuan, at a cost of more than $50 billion."

"While not technically high-speed rail, the trains would run at around 100 miles an hour over the 13-hour journey. That’s still far longer than the 2½ hours it takes to fly from Chengdu to Lhasa, with plentiful daily options. Flights can go for as little as $50 one way, making it tough for the trains to compete."

"Efforts to boost profitability are constrained by a desire to keep ticket prices low, which builds goodwill for Xi and the government. A study by Chinese academics last year found that prices for high-speed rail tickets in China were less than a quarter of the average cost of such tickets globally."

"China is now practically duplicating some routes. High-speed trains have operated for years between the inland cities of Chongqing and Kunming, a journey that takes about five hours. China State Railway says a new $20 billion line being built between the cities, following a different path, will cut travel time to about two hours, while supporting the regional economy and promoting national unity."