China’s trains

12 Mar

China’s leadership is about to change and so like any new leader there has to be a shakeup in order for them to show how they are in some way different. The changes that are about to come with Xi Jinping’s term in office include a decentralisation of some of the country’s infrastructure in order to focus on the bigger economic disputes that include squabbling with both Japan and Vietnam about territory disagreements.

The railway reorganisation was needed after a high speed crash in Wenzhou, a city found in Eastern China, which not only killed 40 people but highlighted flaws in the management of the railways. The railways will now be managed by Ministry of Transportation administratively and commercially by a new company, thus simplifying the set up.

In total the railways are worth a great deal to the Chinese economy, with annual spending on the railways, with total spending for 2013 expected to be in excess of 630million Yuan, which is an increase from the 610billion Yuan predicted in September last year.

Expansion of the railways is also a continuous thing as new projects that have been predicted to take place with investment up and confidence gradually being restored after the fatal crash and the removal of railway minister Mr Liu Zhijun after he was accused of corruption.

Before any project is scheduled to take place a cost benefit analysis has to take place. World Bank evidence suggests that not all the benefits are properly recorded as the flow of people, which creates a wider market place, is not well measured. The predicted flows from the new Beijing to Guangzhou line expect the 3million that currently travel the more convoluted route to rise to 28million. The line is also the world’s longest high speed rail route.

 

References

 

http://www.bloomberg.com/news/2013-03-10/china-restructures-energy-regulation-in-government-overhaul.html

http://uk.reuters.com/article/2012/11/27/uk-china-economy-rail-idUKBRE8AQ03S20121127

http://www.worldbank.org/en/news/press-release/2013/01/21/evaluation-of-high-speed-rail-program-should-consider-wider-economic-benefits

http://www.railjournal.com/index.php/high-speed/chinas-high-speed-programme-back-on-track.html

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4 Responses to “China’s trains”

  1. aa29g11 March 12, 2013 at 11:23 pm #

    Amidst the rising issues regarding the regulation of transport in China it is important for the Government to seek a form of governance that creates efficiency within the system. Although privatisation may have been suitable in order to create the right market for profit incentive and infrastructure, it creates issues when incidents such as Wenzhou occur as there is no responsible body.

    With the ministry’s massive debt, which stood at 2.66 trillion yuan ($422 billion) at the end of September, its financial reports show, the project to undertake most of not all of the railway operations in China will be a massive ordeal. Wu Xiaoling, deputy chairwoman of the National People’s Congress fiscal and economic committee, and previously deputy governor of the People’s Bank of China said “the company shouldn’t take all of the burden alone.”

    The changes announced mark the seventh time the government has tried to restructure ministries in 30 years, the official Xinhua News Agency reported. There is obviously a trend where the government are unsure whether or not the restructuring of authority is vital for economic growth or not. It will be interesting to see whether regulation by the Ministry of Transport will lead to more efficient proceedings or less.

    http://online.wsj.com/article/BT-CO-20130312-703898.html

    http://www.businessweek.com/news/2013-03-09/china-restructures-energy-regulation-in-government-overhaul

  2. np2g11 March 13, 2013 at 9:58 am #

    It is interesting to see how a strategic reduction of the number of ministries and simplification of the Chinese bureaucracy is not only meant to have financial benefits, but also convince the population that something is being done in order to fight corruption.
    Xi Jinping’s intention were made clear and it seems that this is a symbolic starting point that aims to show that something will be done.

    However there are doubts on the actual speed of the reforms and if reducing the number of ministries and government employees is a possible goal. The plan is to reduce the number of cabinet-level ministries from 28 to 25 and in general avoid distributions of power that would facilitate corruption. It is definitely worth waiting and seeing how effectively Xi Jinping’s administration will proceed in order to achieve these goals.

    http://world.time.com/2013/03/11/end-of-the-line-for-chinas-sprawling-corruption-plagued-railway-ministry/
    http://www.telegraph.co.uk/news/worldnews/asia/china/9920702/China-abolishes-powerful-Railways-ministry-in-battle-against-corruption.html

  3. cjf3g11 March 17, 2013 at 11:24 pm #

    The importance of rail to China’s economy was demonstrated after 2011 when China suspended virtually all new investment because of the crash in Wenzhou. Rail investment and infrastructure spending started up again around the middle of last year and was a crucial factor in China’s economic recovery. This is because investment accounts for nearly half of China’s gross domestic product, making it as big an engine of growth as consumption and exports combined. Railway construction is only about 2 per cent of that, but its importance is far greater, stoking demand for steel and helping shape business sentiment.
    “The end of 2011 was probably the worst in terms of the amount of money spent on infrastructure. It nearly came to a halt,” (Ken Peng; economist with BNP Paribas in Beijing) “The bounce back in infrastructure investment was clearly the main driver of the rebound.”
    This also demonstrates the importance of overcoming corruption in railway management and the expansion of the railways in China – as it ultimately affects China’s economic growth.

    http://www.ft.com/cms/s/0/3a2c7c86-5fc1-11e2-8d8d-00144feab49a.html#axzz2NqDNDG9k

  4. sb2g10 March 30, 2013 at 2:50 pm #

    The importance of the development of trains and rail networks for the Chinese authorities can be seen in a number of new rail projects, the largest of which opened last December. The new high-speed rail line between Beijing and Guangzhou is the longest of its type in the world. The main purpose for the new line is to increase connections between two of China’s biggest economic centers. The two cities are separated by almost 1500 miles, which previously took over 20 hours to travel; now it takes less than 9. Reduced traveling time and better connections makes business and trade between the two cities easier. The aim of the Chinese authorities is to try and build a grid of high-speed rail networks throughout China by 2020, with 4 lines running from East to West and 4 from North to South.

    http://news.yahoo.com/worlds-longest-fast-train-line-opens-china-121838743–finance.html

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