China's crumbling high speed rail infrastructure ..

China's investment in High Speed Rail infrastructure running for 37,900 kms at end 2020, 19,000 kms in 2015, has been the highest in the world over the past decade. Since 2015, they have invested almost double of what has been done by the rest of the world in 50 years. It has run into losses of $8 billion last year or about $24 million per day. 

 Is this heavy investment, running to the tune of $900 billion (by the central govt) and another $900 billion by the respective local governments a liability or giving proper returns to the Chinese GDP ? Is it a drain on the Chinese economy ?

Data points to the fact that it is causing Chinese economy to bleed. This article is trying to point to some  interesting and important data relating to HSR network in China and the world and how it is helping decongest the supply chain networks in China and other parts of the world. Thanks to the video from Chinese insights. (click here)

The 37000 kms of HSR built in China over the past ten years has been double of what has been built around the world for the past fifty years.  

The Tokaido Shikansen HSR built in Japan in 1964, stated generating profits in 3 years, extens for 500 km connecting 8 important cities in Japan and covering 55% of the population of Japan. It has had a passenger travel intensity metric value of 90 million passenger-km per km where the threshold for profits is at 36 million passenger km per km as per a Japanese academic. 

The average value of the same metric passenger intensity in China is 17 million passenger-km per km. The maximum has been between Beijing and Shanghai at 47 million passenger km per km while the minimum has been at 2.3 million passenger km per km. Thus we find Chinese HSR has been bleeding for a long time.

The average cost of HSR infrastructure is about 2.3 times higher than ordinary railway while the fare is about 3x. The low occupancy rate of HSR at 30% is one of the main reasons that the Chinese HSR is bleeding.

HSR rail essentially to run at profit has to travel through high population density areas. While Chinese ports account for 40% of global container transportation volume, the sea rail intermodal transportation within China is just 2.5% while the sea rail intermodal transportation rates for US and Europe is at 40% and 38% respectively.  China controls about 49% of the world port container freight.

We find that infrastructure cost wise, HSR infrastructure cost is 3 times ordinary rail costs. The weight of a HSR train axle is about 70T that of an ordinary train is just 23T. 

For every doubling of speed we find the fare increases 4 times. ie. to save 8 hours on an average for a ride, one has to spend about $32, which does not work well for the Chinese public.

The growth in GDP occurs when for every $100 billion invested in ordinary rail road infrastructure gives a return of more than $100 billion in the long run. But this has not been happening for HSR. The poor occupancy has slowed down the returns that proves that Chinese HSR is bleeding.

It is high time Chinese communist dictators take a relook at their bleeding HSR network.

The Indian political leaders should look at the Chinese failed experiment and instead of going for HSR within the country should go for ordinary rail network running at app 200 kmph speeds.

George.