High-speed train route 'to ease economic slowdown'

Small and medium-sized cities between Beijing and Guangzhou now have the opportunity to attract new business and investment, experts say

PUBLISHED : Thursday, 27 December, 2012, 12:00am
UPDATED : Thursday, 27 December, 2012, 1:37pm

The world's longest high-speed rail line, from Beijing to Guangzhou, has opened at a time of economic uncertainty on the mainland, with growth slowing due to a lack of new stimulus.

Scholars say the new line could inject much-needed energy into the economy, especially in the many mid-sized cities that missed out on the first wave of the development gold rush.

But that will depend on whether the central government can bear the huge financial burden generated by its construction and maintenance.

Chen Tian, regional development geologist with the Chinese Academy of Sciences' Institute of Geographic Sciences and Natural Resources Research, said the Beijing-Guangzhou line, like other high-speed rail lines on the mainland, had attracted a lot of criticism due to its huge cost.

He agreed with the critics that the line would probably run at a huge loss.

"But we need the line as much as a drowning swimmer needs a lifesaver, because transportation has become a matter of life and death for the economic development of many regions," he said.

Most of the mainland's talent and money is concentrated in a few big cities such as Beijing, Shanghai and Guangzhou, while many mid-sized and small cities remain undeveloped.

After more than three decades of rapid development, the big cities have many problems.

Chen said many residents, fed up with traffic jams, air pollution and skyrocketing housing prices, would consider holidaying or living in smaller cities if transport times were cut to a few hours by a train travelling at 300km/h. The Beijing-Guangzhou line not only runs through four provincial capitals - Shijiazhuang in Hebei, Zhengzhou in Henan, Wuhan in Hubei and Changsha in Hunan - but also through more than 20 mid-sized and small cities such as Dingzhou, Xingtai, Hebi, Xuchang, Yueyang, Hengyang and Shaoguan, where labour, tourism and consumer markets remain largely untapped.

Chen said high-speed train travel would prompt many manufacturers to consider building labour-intensive factories in small cities along the line, and tourism companies to develop new destinations.

"Driving 1,000 kilometres on the highway is dangerous and tiresome," he said. "Flying 1,000 kilometres in a jetliner is troublesome and uncertain, as Chinese airlines often miss their schedules due to increasing extreme weather events such as typhoons and snow storms.

"But a three-hour ride on a high-speed train is comfortable and convenient."

On the Beijing-Guangzhou high-speed line, a Beijing resident can travel to Dingzhou in about an hour, Handan in two hours, Zhengzhou in three hours and Xiaogan in less than five hours.

"A family in Beijing having a hard time figuring out where to spend their weekends can now pick their destinations from a much larger radius," Chen said. "They can have breakfast at home, lunch in Henan and return home for dinner."

Chen said that not only would mainlanders' concept of travel change profoundly over the next decade as the high-speed rail network was completed, but high-speed rail lines would become the stimulus for a new round of economic growth.

The high-speed rail lines would allow traditional lines to carry more freight trains.

"By cancelling one passenger train on the traditional railway line we can add six cargo trains," Chen said. "As we enter the high-speed rail era, our economic motor will run much faster, at much less cost."

Wang Mengshu, deputy chief engineer of China Railway Tunnel Group, said the new line's construction was difficult and costly, with nearly 1,000 kilometres of it being tunnels through mountains.

Though the total cost of the line has not been officially released, Wang said he expected it would be much higher than the cost of the 1,318-kilometre Beijing-Shanghai line, which cost more than 220 billion yuan (HK$270 billion).

Professor Zhao Jian, an economist at Beijing Jiaotong University, said the new line would lose money from the first day of operation.

Ticket prices for the eight-hour ride from Beijing to Guangzhou start at 865 yuan, almost twice the price of a hard sleeper on a traditional line and many people have complained on internet that they will not be able to afford the high-speed train.

But Zhao said even such high prices would not relieve the Ministry of Railways from its huge and growing financial burden.

He said the ministry had relied heavily on direct funding from the central government and loans from state-owned banks to build the mainland's high-speed rail network, and the returns from high-speed trains in recent years showed no sign of hope that it could ever pay back the debt.

"The opening of the new line will definitely suck hard on taxpayer's money," Zhao said. "I don't think the benefit will exceed the cost."