A distant dream: China's international rail ambitions
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A distant dream: China’s international rail ambitions

07 Sep 2014

With four international rail projects planned and a promise to Africa for the support of a continent-wide railroad network, China’s prime minister Li Keqiang is living up to his nickname as the “railway salesman”. In the past, China has always required foreign support for its railway engineering – and even ten years ago French and Japanese companies were behind high-speed rail in China – but with rising debt and international relations at stake, are China’s high-speed rail dreams really on track?

A distant dream: China’s international rail ambitions

chin high speed rail station

With a high-speed network that has been running since 2007, China now has the longest high-speed rail network in the world, the Beijing-Guangzhou-Shenzhen-Hong Kong high-speed line, which has over 11,000km of track. This has reduced a 24-hour trip down to eight hours. The country’s progress is not without its problems though. While America was admitting that its infrastructure had slipped in comparison with China’s high-speed rail development back in 2011, a bullet train crash outside Wenzhou in the same year killed 40 people and railway officials were exposed for corruption and substantial safety negligence.

China’s international rail ambitions

But the Guangzhou-Shenzhen-Hong Kong section of the track, which was originally due to be completed in 2015, is likely to be delayed by two years. According to the Hong Kong Standard: "In 2010 the Legislative Council approved HK$66.8bn [$8.62bn] for the project, HK$65bn [$8.39bn] of which was for Mass Transit Railway Corporation (MTRC) to provide the design, construction, project management, testing, commissioning and more." However, in August 2014, a spokesperson for MTRC said that the latest estimate had risen to HK$71.52bn [$9.23bn], with the bearer of the extra cost to be decided by the "entrustment agreement".

Now there are ambitious plans underway to develop and construct international lines, critics are expressing their lack of belief in the feasibility of the projects and concern for the price tag that is attached. One route would start in the city of Kunming and end in Singapore (via Vietnam, Cambodia, Thailand and Malaysia); another is planned to start in China’s north-west city of Urumqi and go through Kazakhstan, Uzbekistan, Turkmenistan, Iran and Turkey to German.

"The scale and cost of these projects, particularly the "China-Russia-Canada-America" line, mean that some squarely oppose them."

Another will connect London, Paris, Berlin, Moscow and then pass into China; and the most ambitious of them all is known as the "China-Russia-Canada-America" line. Starting in north-east China, 13,000km of track will cut through Siberia and pass under a 200km tunnel in the Bering Strait to Alaska (four times the length of the Channel Tunnel), where it would go through Canada and then into the US. The trip would take two days with the train travelling around 350km/h, the train’s maximum speed.

An impossible dream?

But the scale and cost of these projects, particularly the "China-Russia-Canada-America" line, mean that some squarely oppose them. "The ‘China-Russia-Canada-America’ line is totally meaningless," says Zhao Jian, a professor at Beijing Jiaotong University in the School of Economics and Management.



High-speed rail in the US is languishing in the doldrums, leaving important regions like the Northeast Corridor (NEC) underserved.


"For transport passengers, why not by airplane; for transport cargoes, it is more expensive than by sea," he adds. "Rail across other countries involve the sovereign rights of countries and environment protection, it is nearly impossible."
In fact, when comparing with air travel, reported the Economist, it would take 13 hours to get from Beijing to Chicago, whereas a train running at a more leisurely 200km/h to travel the "China-Russia-Canada-America" line would take 65 hours.

While the China Daily newspaper, which is run by the state, says that the tunnel technology is ready, it also reports that the "project will be funded and constructed by China" and adds that the details of the project are yet to be finalised. However, in July 2014, China Securities Journal has reported that, in terms of cost, the government is currently planning to spend 27bn yuan [$4.39bn] on 14 railway projects.

But Jian believes the project will be a liability and not an asset, and he does not believe that the line will ever materialise. He believes that conventional rail is advantageous for China, but not high-speed.

Another question mark regarding the reality of the "China-Russia-Canada-America" line hangs over whether the different countries will be able to foster international co-operation well enough for the line to actually materialise.

Keqiang has been seeking deeper economic integration between China and Europe and President Xi Jinping’s visit to Europe earlier in 2014 was the first-ever visit of a Chinese Premier to Europe. With China being the biggest source of UK imports and possessing one of the EU’s fastest-growing export markets – they trade more than $1.33bn every day – China and the EU have just gone through the third round of negotiations for an investment agreement to make doing business easier and safer.

"China and the United States are different in history, culture and stage of development."

Keqiang is continually underlining that international relations are of primary importance to China. At a press conference in March 2014, he said that in order to achieve modernisation in the country, on behalf of 1.3 billion people, creating a favourable environment for China’s development is key. In terms of the relationship between the US and China – which is vital for the implementation of the "China-Russia-Canada-America" line – a bilateral investment treaty is currently in development, with trade currently reaching over $520bn last year.

"China and the United States are different in history, culture and stage of development," said Keqiang. "So it’s only natural that these two countries have some differences and there are also some frictions in their cooperation. But these are pains amidst growing cooperation," he added, underlining that the focus between the US and China will be in on "common ground in pursuit of long-term benefits".

The fastest way and the lowest cost

In response to fears over the stability of the Chinese economy, at a recent press conference in March 2014, Keqiang made assurances that despite China’s economic downturn during the previous year, it had met the "goal set for economic growth" and achieved their goal for economic growth. He stated that the way to upgrade the Chinese economy is by upgrading Chinese exports.

As the rail boom continues in the country China wants to export its new-found expertise. While on a trip to Kequiang last year, he told leaders in Europe that Chinese companies can deliver high-speed railways and nuclear power plants in "the fastest way and at the lowest cost".

Now other major plans for China’s rail expansion includes the extension of the Qinghai-Tibet Railway to Nepal by 2020, which will reach the borders of Nepal, India and Bhutan. It has also started to export its rail technology to Turkey through a Chinese-Turkish consortium. Xinhuanet reported recently that Chinese firms are helping to finish a high-speed railway project that connects the capital of Ankara with Istanbul. The Turkish government intends for this line to support up to 80% of the total number of passengers between the two cities. Agreements are also in place for China to construct a new East Africa railway line, which will run initially from Mombasa to Nairobi in Kenya, but then be extended to Uganda, Rwanda, Burundi and South Sudan. Construction is expected to start in October 2014 and be finished in 2018. China has also recently agreed a $1.3bn deal in Nigeria to construct a high-speed railway, which is likely to run across ten Nigerian states.



With ground finally broken on the $98bn project, we ask if it now has a realistic chance of success.


In its latest move to improve "fundraising ability and revenues" for its booming rail industry, the Chinese government has announced it will allow railway firms to generate more income through the development of land and the construction of integrated transport hubs that connect stations with buses and taxis, reported Reuters following a statement on the central government’s website, gov.cn.

Only time will tell if this can reform the sector’s debt-laden financing model and if critics with negative opinions, such as Jian, can be persuaded that high-speed rail is as beneficial for the country as the government believes. For now, he stands firm in his beliefs. "There is no market," he concludes, "except the foreign government can pay the cost".

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