In 2010, then-governor of California Arnold
Schwarzenegger visited Japan, Korea, and China, marveling at their high-speed trains. China’s, though still in their infancy,
were already faster than any in America — by about 120 miles, or 190 kilometers, an hour. California’s ambitions were modest by comparison
— to build one line, from San Francisco to LA — about 70% the length of China’s
longest, by 2020, 10 years later. A second phase would connect LA to San Diego
down South and Merced to Sacramento up North. Ten years later, California was somehow still
10 years away. Meanwhile, the cost had grown from $33 billion
in the 2008 proposal to $53 billion in 2012, to 77 in 2018 — two and a third times the
original estimate. Still, it gets worse… In an embarrassing illustration of American
bureaucracy, its trains, if and when they ever exist, will have two sets of doors at
different heights for different stations, after failing to compromise with Caltrain. Then, there’s China. While California was busy bickering over the
height of its doors and fending off lawsuits, China put its head down and just built. Even after becoming #1 in high-speed rail,
it never looked back, charging forward until it had surpassed every other nation put together. Then two-thirds of the entire world total. More impressive is that it did all this as
a middle-income country. At the time it began construction, its per
capita GDP was just $3,400 current US dollars. If you adjust the length of each nation’s
high-speed rail by GDP per capita, few others are even visible. But trains are only one, high-profile symbol
of a much larger pattern — that, while China’s methods may be crude and controversial, they
are, ultimately, more efficient. The country has dramatically more electric
buses, for instance, than anywhere else on the planet, by a crazy margin. One city even built an elevated bus lane,
allowing them to zoom past traffic jams. So too does its number of electric charging
stations dwarf all other regions by comparison. While Congress hems and haws about “big
tech” monopolies, Chinese authorities just snap their fingers and break them up. American politicians, it’s often said, think
only one election cycle ahead, whereas Chinese leaders are free to plan 50 or 100-year “ grand
strategies”. …Or, so it may seem. Sponsored by Skillshare. Get a one-month free trial and start learning
everything from photography to graphic design. There are three ingredients to successful
high-speed rail: First, and most obvious, you need lots of
people. Not just a large number, but, ideally, a string
of high-density clusters. Check. The vast majority of the 100 Chinese cities
with a population over one million are, quite conveniently, clumped together on its Eastern,
coastal side. Second, it can’t be too expensive. Again, no problem. In addition to the much lower cost of labor,
the sheer scale of China’s plans allowed construction companies to optimize every step
of the process and amortize large investments over a significantly longer time and project
horizon. A report by the World Bank found that its
average cost was “at least 40% cheaper” than the European equivalent. It didn’t hurt that everything, up to and
including the trains themselves, were built in China. Third, and finally, a good candidate for high-speed
rail is rich. This, it most certainly was not. But with annual GDP growth over 10%, at the
time, it wasn’t crazy to think it would soon get there. Its first few routes connected wealthy 1st,
2nd, and 3rd-tier cities like Nanjing, the 5th richest, to Guangzhou, the 13th. They were also the right length. For trips shorter than roughly 100 miles,
it generally makes more sense to drive or take a bus, especially given that many stations
are far outside city centers. Conversely, for trips longer than about 750
miles, it’s usually preferable to fly. These journeys take upwards of 5 hours on
even the fastest trains. The space between 100 and 750 miles, but especially
below 500, is the goldilocks zone for high-speed rail — too far to drive, yet not far enough
to fly. 8 out of its first 10 routes had total lengths
within these bounds. It all seemed pretty sensible. And had it stopped there, in 2010, it would
still, today, have the longest high-speed rail network of any country. Even building nothing new for the next 12
years, it would still go down in history as a tremendous accomplishment in speed, scale,
and cost. Instead, China kept building. And building. And building. And building. Now, this wasn’t its original intention. Far from a grand, strategic plan, it, along
with much of what we know as “modern China” today, were reactions — reactions to the
2008 financial crisis. 45% of its nearly $600 billion stimulus package
went toward “transport and power infrastructure”. It seemed like the perfect time to seize the
opportunity and get ahead, rather than sit back and wait until its infrastructure was
already crumbling, like the U.S. But it was still, at its core, a gamble. One, giant assumption that demand would materialize
and that increased interconnectivity would drive greater economic growth. This was not as sound a bet as it may seem. For anyone living in the U.S. or other rich
countries, high-speed rail probably looks like a cheaper, more environmentally-sound
alternative to air travel. But the data clearly shows that, in China,
the biggest competitor to high-speed trains are older, cheaper, low-speed trains. In a 2015 survey, about half of all passengers
said they otherwise would have taken conventional trains. Only a small minority say they would’ve
flown. The problem is cost. One study found the average cost to build
a 350 km/hr line was 90% higher than even a two hundred and fifty kilometer one — which
is still, by the way, considered “high-speed”. This is, in large part, because the faster
lines use elevated tracks, which, given China’s softer soils, would compress and sink over
time, causing a safety risk. To prevent this, the fastest trains require
extensive use of bridges and viaducts, which are significantly more expensive than roadbed,
made of sand, rock, and gravel. And that’s just the construction. These are not LEGOs — build once and play
forever. They also have operating costs. Energy use is not linear with respect to speed. Electricity consumption increases much faster
with every additional kilometer per hour. All of this is to say: that extra bit of speed
is really expensive. Conventional trains cost roughly 2 to 3 cents
per kilometer. High-speed, triple that. Take a random route on a random day — let’s
say Guangzhou to Shanghai. The fastest journey takes 6 hours, 48 minutes
and costs $124. The slow journey takes nearly a full day but
costs just $31. Anyone watching this video would likely jump
at the opportunity to spend just 93 more dollars to save a whole 16 hours of travel time. But the same can’t be assumed in China. Though there’s no definitive “Value of
Time”, most estimates use the average hourly wage for business travelers, and no more than
half that amount for leisure. A quick back-of-the-envelope calculation reveals
the 5.8 US dollars per hour saved would be just marginally worthwhile for the average
business traveler, but not for the average leisure traveler. Another way of visualizing this is by splitting
the population into 10 equal-sized groups by income. What this shows is that $93 is at least half
of weekly income for about 60% of China’s population. Of course, in reality, a disproportionate
number of the remaining, highest-income travelers will simply opt for air travel instead. Others actually prefer the slower option. Say, for example, you have one day of meetings
or events to attend the next day — the sleeper train saves you from the one night you’d
otherwise spend at a hotel anyway. Now, it would be wrong to say that demand
never materialized. Just look at how busy stations get around
Chinese New Year. But the undertaking can hardly be called a
success, either. Individual lines vary across the spectrum
from extremely popular to catastrophically empty. Although these numbers are wildly out of date,
pay attention to the difference between them. While some routes saw twenty or thirty million
passengers a year, like Beijing to Shanghai, or Shanghai to Nanjing, elsewhere, quote “The
scale of investment seems to be difficult to justify”, says a Beijing professor of
economics. Zhengzhou to Xi'an is, on average, less than
50% full. Huaibei to Shanghai, as low as 21%. In fact, the majority of routes lose money. According to the World Bank, out of 31 lines,
just five are at least break-even. Four were unable to pay back the principal
on their loans, eleven, also their interest, and another eleven were unable even to cover
their operating costs. The 1,700 km route connecting Xinjiang to
the capital of Gansu province, in the (largely empty) Gobi desert, runs just 8 of the 320
daily trains it was designed to handle. It loses money even on electricity, meaning
there’s no hope of paying back its other operating costs, to say nothing of the interest
on its loans, and you can forget about the principal. To keep the lights on, operators have continuously
taken on new debt to pay off the old in a vicious cycle. No one is quite sure how this ends. You might argue that high-speed rail doesn’t
need to be profitable — that it can exist purely as a “public good”. This may be true, but “efficiency” is
defined as output divided by input — how much do you get out for every dollar or hour
you put in. There’s no denying China’s incredible
output — the fruits of which are plainly clear to see. But too often are speed and scale marveled
at for their own sake — with no regard for their cost or context. The point is that China didn’t “crack
the code” on high-speed rail. It didn’t discover or invent some new method
or technology that made it cheaper, faster, or more widespread. Rather, it paid the price — a tremendous
price, and there’s no reason to think any other country, including the U.S., couldn’t
accomplish the same thing if it similarly abandoned all financial constraints. $900 billion of debt can buy quite a lot of
rail. Even setting aside financial measures, it’s
unclear that high-speed rail had a net positive effect. Its singular, almost religious obsession with
building more and more and more high-speed rail, well past its usefulness, has diverted
funds away from conventional rail, on which freight trains depend. While slow trains are certainly less exciting,
their underinvestment and, in some cases, dismantling has led to a rise in road transport,
which is good for no one, not least, the planet. This is not the image of a government free
from political considerations, quietly and competently pursuing the most optimal policies
according to one grand strategic plan. Instead, this, like many of its superlative-laced
megaprojects — The Three Gorges Dam, The Hong Kong-Zhuhai-Macau bridge, and others
— are designed, first and foremost, to impress. They benefit from a fundamental psychological
tendency to view other, faraway countries as possessing the solutions to our own. If America can’t build cost-effective high-speed
rail because of endless red tape, its pervasiveness in China must be evidence of success, rather
than a reflection of its own unique flavor of bureaucratic inefficiency. The mistake is assuming that because China
lacks your country’s exact problems that it must be free of its own. Now, all this inefficient development could’ve
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