Engines of Growth

By Austin Ramzy Monday, Aug. 16, 2010
    • Photograph by Michael Christopher Brown for TIME

    People get ready There's a bullet train a-coming. China plans to double the size of its high-speed network in two years

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    The network is already creating a new class of intercity commuters. "This train is really convenient," says Lu Ke, a 30-year-old civil servant, as he makes a twice-weekly, 205-km/h run between his job in Hangzhou and his home in Shanghai — a 90-minute journey that cruises past factories, fishponds and new apartment complexes and costs $4.25 each way. "In the past," he recalls, "people would be wedged into here like chopsticks, standing in every available space and even squeezing beneath the seats."

    But critics worry that with more than half of China's population still rural, spending billions on fancy rail projects is excessive — particularly as it comes a mere decade after the country embarked on building an equally impressive highway system. For every white-collar commuter like Lu, there are dozens more migrant workers who need to make only two train trips a year — from their jobs on the coast to their inland hometowns to celebrate the Lunar New Year, then back again. Earning as little as $100 a month, they can hardly afford a seat in the high-speed network's plush carriages (the journey from Wuhan to Guangzhou, for instance, starts at $72).

    Although construction costs are cheap in China, high-speed railways are also much more expensive to build and maintain than standard railroads. Fast-train networks have traditionally been built in smaller, developed nations like Japan, because they are best suited to travel between highly populated, closely located cities — not in a place like China, where large cities are spread out. What's more, many Chinese are perfectly willing to take slower, cheaper trains. In an opinion piece in the China Daily published in April, Zhao Jian, an economics professor and colleague of Jia's at Beijing Jiaotong University, wrote, "China's per capita income is still relatively low and so is the economic value of time. Cheap travel with basic comfort suits ordinary Chinese passengers, who do not want to spend three times as much for high-speed tickets just to save a few hours of travel time."

    The danger is not just that China ends up with a much better rail system than it needs at this point. It's that it incurs heavy debts in building it. Massive infrastructural investments over the past year have helped China become the first major economy to pull out of the global economic crisis, but they could become a heavy burden if the recovery stumbles. The current flagships of the high-speed-rail project, the Beijing-Tianjin line in the north, Wuhan-Guangzhou in the south and Zhengzhou-Xi'an in central China, will all face difficulties breaking even, according to Zhao. When China's grandiose highway projects ran into trouble during the Asian economic crisis of the late 1990s, the government was able to finance them thanks to strong export growth over the next decade. Another export boom is less likely in the current global climate.

    There is, however, the possibility that China could cushion the risk by exporting its rail expertise. State media report that Beijing wants to expand high-speed rail to more than a dozen Asian nations, eventually building a high-speed grid that would link China to Europe. Already, Chinese firms have begun to win key rail projects overseas. Last year, Saudi Arabia awarded the $1.8 billion first phase of a high-speed rail link between Mecca and Medina to a consortium that includes the state-owned China Railway Construction Corporation. Chinese companies are building high-speed-rail projects in Venezuela and Turkey, and the Ministry of Railways is even organizing a Chinese bid for California's proposed $45 billion project to build a high-speed-rail network linking the southern and northern parts of the state.

    The American train system could certainly use a boost. It now has just one high-speed line in operation, Amtrak's Acela Express between Boston and Washington, D.C., which averages a measly 116 km/h. That laggardness isn't lost on ordinary Chinese. "Chinese trains have gotten so much better," says Xu Wenhong, a 55-year-old schoolteacher traveling on the train from Hangzhou to Beijing to see his newborn granddaughter. "Now even the U.S. is thinking of buying them." He smiles with satisfaction as we speed into the future at 200 km/h.

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