Forum Post: Economic benefits of high speed rail in China

Shouldn't we be doing something like this in the US? The first step is passing Glass Steagall, to get all the phony money out of Wall Street, and then, establishing a national bank, as an alternative to Wall Street, to finance economic development projects, such as the following.

"The world’s longest high-speed rail route was inaugurated on Wednesday, as the first bullet train linking China's capital with Guangzhou, left Beijing on Wednesday morning. The distance of 2,298 km is equivalent to a trip from Washington, DC, to Houston, Texas. The travel time of 22-hours on the existing lines will now be reduced to about 8 hours.

By contrast, U.S. Amtrak trains travelling from New York to Miami, a shorter distance, still take nearly 30 hours.

China's high-speed rail network was only established in 2007; by 2010 it covered 8,358 km; by 2020 it is expected to cover 16,000 km.

{Russia Today} had reported on it’s successful test on December 23, with 100 reporters on board. During the test, the train went over 300 km/hour (185 mph); it's designed to hit speeds of 350 km/hour (217 mph).

China sees that infrastructure development, such as with high-speed rail, brings widespread general economic growth. The {China Daily} reported on the wider implications of the commercial opening of the high-speed rail line between Beijing, in the north of China, and Guangzhou (Canton), in the south.

China Daily outlined some of huge economic'' benefits the new line is expected to bring to towns and cities along its route, creating what officials are calling world-classcity clusters'' across Central China. There will be 35 stops along the newly completed route, including major cities such Shijiazhuang, Zhengzhou, Wuhan, and Changsha, and the route will cut through areas with a combined population of 300 million to 400 million.

``Opening the route will not only bring these cities closer, but will generate business for many different supporting facilities, promoting change in their growth patterns for years to come,'' said Wang Mengshu, an academic at the Chinese Academy of Engineering. He said GDP growth in many of those areas had been independent of each other in the past, and relied mainly on real estate development and automobile sales, both of which had been run inefficiently while devouring resources. Better access to fast railway links will now mean improved cargo transportation between factories in various cities, leading to greater expansion of support facilities, Wang said.

Better access to fast railway links will now mean improved cargo transportation between factories in various cities, leading to greater expansion of support facilities, Wang said. ``Railways will indeed become a way to increase prosperity for so many industries,'' he added. Wang calculates that a 600-billion-yuan ($96 billion) annual investment in railway construction could generate 3,000 kilometers of railway a year, which in turn could raise the country's annual GDP growth by 1.5 percentage points, and create more than 6 million jobs.

Apart from increasing the flow of people into the cities, the railway will also greatly increase freight traffic, he added. Although the line is largely being seen as a passenger line, Wu Ruliang, director of the Logistics Association of Hubei Province, said that his industry will benefit greatly from the high-speed link, and that he expects the cost of express delivery to drop by at least 50 percent as a result of its opening. Officials from the Ministry of Railways have said the new route will release cargo transport capacity on the old line between Beijing and Wuhan by 20 million tons a year. China's high-speed passenger system is separate from its bulk cargo railroad network. While the growing high-speed system does not directly increase cargo speeds (except for high-value ``express'' packages), it not only removes the passenger traffic from the ordinary routes but permits greater efficiencies for the now all-cargo, single mode network.

Xiao Jincheng, the director of the Land Development and Regional Economy Research Institute, gave an example of the ``city cluster'' effect, using the city of Shijiazhuang, which will be brought much closer to the economic region dominated by Beijing as a result of the new link. It will now be just an hour away from the capital.

Shijiazhuang will be one of many locations along the route to benefit from the development of what officials are calling ``city clusters.'' One of the largest will be created along the Beijing-Wuhan section -- the Central Plain area which ties in the city of Wuhan with Changsha, Zhuzhou, and Xiangtan. Analysts believe the area could become as economically important as the Pearl River Delta (Guangzhou), Yangtze River Delta (Shanghai), and Bohai Economic Rim (Beijing).

Xiao said conditions are perfect for many cities in the central regions to grow into truly world-class city clusters, but that the satellite cities surrounding Wuhan and Zhengzhou also need to keep pace. Wuhan, in particular, will be fashioned into a hub for the country's high-speed passenger transport network, given its location right in the heart of the network. His expectations echoed the development plan for the central regions, published by the State Council, which aims to build Wuhan and Zhengzhou into national transport hubs. ``The central region city cluster may turn into a new growth engine for China,'' Yang said."