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China's next big thing: high-speed railways
By John Gong |
February 4, 2010, Thursday
|
Print Edition
Print Edition
THOSE of my readers who are old enough to have seen Dustin Hoffman in "The Graduate" (1967) must remember one classic scene in which Mr McGuire lectures on career advice with only one word - "plastics."
That was in the late 1960s. When a group of my undergraduate students came to me recently asking for career advice, I impulsively uttered one word as well - "railways."
There was a moment of suffocating silence in the room. And I had the feeling I seemed like a snake oil salesman.
Rail transport is hardly eye-catching career advice in times of sex, lies and mobile handsets. But that is where the money is, and that is where the opportunity abounds. And here is the reason why.
Towards the end of last year, another landmark was achieved in China's railway history. The latest feast is Harmony Express' opening service linking Wuhan, Hubei Province, and Guangzhou, Guangdong Province, reducing the previously 12-hour-long trip to a record time of about only three hours.
This is the world's fastest train, running close to 400 km per hour at top speed. At this speed, rail for the first time becomes a viable competitive alternative to air travel.
What is more remarkable is that the Wuhan-Guangzhou rail connection is just one of a series of grand railway developments that will unfold in the next few years involving trillion of yuans of investment.
In 2007, China improved the speed of its conventional trains to 200-250 km an hour. In 2008, the high-speed rail that links Beijing and Tianjin at a speed of up to 350 km an hour started service. Thirty-six more passenger rail lines stretching altogether 13,000 km will open by 2012.
The most exciting of all, and this is even personal to me as a Shanghainese who frequently commutes between Shanghai and Beijing, is the ultra high-speed, ballastless-track railway service running at three-minute intervals connecting the two cities within an incredibly short time of a bit over three hours. Construction is under way.
Wow, I can't wait to throw away my Eastern Airline's preferred passenger card, because the habitual delays have tested, and exceeded, my patience many times over.
Ode to the Ministry of Railways! Based on my study, this is one of the few state-owned monopolies that show a remarkable level of investment and operations efficiency, at least compared to its peers in leading developed countries. The technology development model of China's high-speed railway is also a textbook example of success.
In sharp contrast to the automobile industry, where China's "market for technology transfer" industrial policy in the last 20 years has generated despicable results, the state-of-art railway technologies from the Ministry of Railways is truly a wonderful combination of advanced foreign pedigrees and audacious indigenous innovations.
Before China, France, Japan and Germany have already developed world-class high-speed rail technologies, and have succeeded in commercializing their technology.
However, China acquired its advanced high-speed train technology through limited technology transfer from these companies in combination of its own research and development.
The trains operating on the Wuhan-Guangzhou line for example are built by China South Locomotive and Rolling Stock Corp.
These technology accumulations include not just the tricks for constructing tracks and manufacturing passenger cars, but also various other technologies on telecommunication signals, control systems, and other system management issues.
With cutting-edge technologies and a vast domestic market to exploit economy of scale, vendors under the Ministry of Railways are now in a position to flex their muscles on international markets.
China's rail technology has export competitiveness thanks to its stable quality and low construction cost, which is about 20 percent less than that of other countries.
And China is currently seeking alliances with Russia, the US, and India on high-speed train projects.
If you look at the 4 trillion yuan (US$586 billion) fiscal stimulus package that started last year, I would say 60 percent goes into transport, and the bulk of that is spent on railway-related projects.
Construction of a high-speed rail network of such a large scale has driven the growth of upstream and downstream industries, like transport, cement, mechanical engineering, and steel industries.
Construction of high-speed rails is also expected to affect logistics, relocation of industries and boost tourism industry in areas near high-speed rail lines.
The ripple effect will be felt many years into the future, and the economic impact is tremendous, percolating into many sectors of the economy.
(The author is associate professor of economics at the University of International Business and Economics in Beijing. His email: johngong@gmail.com).
That was in the late 1960s. When a group of my undergraduate students came to me recently asking for career advice, I impulsively uttered one word as well - "railways."
There was a moment of suffocating silence in the room. And I had the feeling I seemed like a snake oil salesman.
Rail transport is hardly eye-catching career advice in times of sex, lies and mobile handsets. But that is where the money is, and that is where the opportunity abounds. And here is the reason why.
Towards the end of last year, another landmark was achieved in China's railway history. The latest feast is Harmony Express' opening service linking Wuhan, Hubei Province, and Guangzhou, Guangdong Province, reducing the previously 12-hour-long trip to a record time of about only three hours.
This is the world's fastest train, running close to 400 km per hour at top speed. At this speed, rail for the first time becomes a viable competitive alternative to air travel.
What is more remarkable is that the Wuhan-Guangzhou rail connection is just one of a series of grand railway developments that will unfold in the next few years involving trillion of yuans of investment.
In 2007, China improved the speed of its conventional trains to 200-250 km an hour. In 2008, the high-speed rail that links Beijing and Tianjin at a speed of up to 350 km an hour started service. Thirty-six more passenger rail lines stretching altogether 13,000 km will open by 2012.
The most exciting of all, and this is even personal to me as a Shanghainese who frequently commutes between Shanghai and Beijing, is the ultra high-speed, ballastless-track railway service running at three-minute intervals connecting the two cities within an incredibly short time of a bit over three hours. Construction is under way.
Wow, I can't wait to throw away my Eastern Airline's preferred passenger card, because the habitual delays have tested, and exceeded, my patience many times over.
Ode to the Ministry of Railways! Based on my study, this is one of the few state-owned monopolies that show a remarkable level of investment and operations efficiency, at least compared to its peers in leading developed countries. The technology development model of China's high-speed railway is also a textbook example of success.
In sharp contrast to the automobile industry, where China's "market for technology transfer" industrial policy in the last 20 years has generated despicable results, the state-of-art railway technologies from the Ministry of Railways is truly a wonderful combination of advanced foreign pedigrees and audacious indigenous innovations.
Before China, France, Japan and Germany have already developed world-class high-speed rail technologies, and have succeeded in commercializing their technology.
However, China acquired its advanced high-speed train technology through limited technology transfer from these companies in combination of its own research and development.
The trains operating on the Wuhan-Guangzhou line for example are built by China South Locomotive and Rolling Stock Corp.
These technology accumulations include not just the tricks for constructing tracks and manufacturing passenger cars, but also various other technologies on telecommunication signals, control systems, and other system management issues.
With cutting-edge technologies and a vast domestic market to exploit economy of scale, vendors under the Ministry of Railways are now in a position to flex their muscles on international markets.
China's rail technology has export competitiveness thanks to its stable quality and low construction cost, which is about 20 percent less than that of other countries.
And China is currently seeking alliances with Russia, the US, and India on high-speed train projects.
If you look at the 4 trillion yuan (US$586 billion) fiscal stimulus package that started last year, I would say 60 percent goes into transport, and the bulk of that is spent on railway-related projects.
Construction of a high-speed rail network of such a large scale has driven the growth of upstream and downstream industries, like transport, cement, mechanical engineering, and steel industries.
Construction of high-speed rails is also expected to affect logistics, relocation of industries and boost tourism industry in areas near high-speed rail lines.
The ripple effect will be felt many years into the future, and the economic impact is tremendous, percolating into many sectors of the economy.
(The author is associate professor of economics at the University of International Business and Economics in Beijing. His email: johngong@gmail.com).
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