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High-speed rail challenges China's vision

(Global Times)

08:47, November 07, 2011

China's Ministry of Railways (MOR) has reportedly asked the central government for an $800 billion yuan ($126 billion) bail-out plan. Some call the MOR China's Fannie Mae and Freddie Mac, two US mortgage finance giants that have made huge contributions but now are a heavy burden for the US government.

The comparison reminds us of the severity of the MOR's "debt crisis." But while the two US companies focus on finance, the MOR-led railway construction belongs to the real economy.

It's true that China needs to take actions, to avoid the current railway expansion plan's abortion which may derail the national economy. Public concern has accumulated as the cash-hungry MOR halts various high-speed rail projects.

No matter how it raises its funds, the MOR has to face a macro background - the inflation curbs by the government and the public slash of the high-speed rail system.

The MOR's predicament indicates a tendency. Previously, authorities could mobilize abundant social resources to ensure the implementation of a project like the Three Gorges Dam.

That era is probably gone. Like the current railway construction, future grand projects will inevitably encounter resistance.

If changes in the macro-economic policy and the ecology of public opinions are able to exert influence on plans like the high-speed rail construction, we can say the Chinese practice will be similar to that in Europe and the US. In other words, the implementation of a project will mainly depend on the nation's short-term interests and the gaming between various social components.

China is well-known for its ability to concentrate its resources to get the big jobs done. The practice is not necessarily reasonable.

However, it has provided a basis for our national strength. It has caused troubles, but until today it is still a motivating force for the nation to address its problems. China shouldn't give up the advantage, but should concentrate its resources only on beneficial projects.

Is developing a high-speed rail network beneficial? Apparently, yes. First, it is a manufacturing industry, not venture investment that could soon vanish. Even if the project fades, solid social demand will invigorate it again.

The high-speed rail is also a Chinese endeavor of world-class innovation. So far, we can't calculate its technological and strategic contributions. If the project fades, it will be an abortion of the Chinese determination and bravura of approaching top technology in the world or even becoming a leader in the field.

The real dilemma is that while millions of Chinese aspire for a train ticket for the holidays, railway construction cannot find adequate funds.

China's railway construction shouldn't be crushed by July's train crash or the corruption case of the MOR's former head. It will bring China great, even revolutionary progress, which will correct the mistakes and tragedies of its past.

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Leave your comment3 comments

  1. Name

Francisco J Lee at 2011-11-1165.208.187.*
Instead of buying american treasury bonds, the government should be financing the high-speed train.The Almighty
HongKonger at 2011-11-08219.79.83.*
China’s high-speed train project and its realization is, in fact, the precursor of the future development of the country. Because of the physical vastness of China, high speed traveling and logistics are urgently needed for a fast development of the country’s economy and national security. The present bottle neck in financial funding of the project is transient and it will be overcome with least efforts.
PD User at 2011-11-07114.160.71.*
China experimentation with privatisation of its railways failed as proven that is has been mired in financial difficulties.Prior to this, which was a state enterprise, it has been successful in giving services to all its people as well as people from all over the world.Therefore, the current financial problems is actually a very minor problem for China. All it need to do is for the state provide the funding. This privatisation will not go away until the state take back control of this essential services and do it right. A successful modern railway infrastructure is also a success for the world as this essential services will also be roll-out worldwide as another China"s immense contribution to the world. Just don"t allow a few individuals benefit and the rest of the people suffer in unbearable train services. This is nothing other than a state responsibility and thus the state must provide the funding. Problems solved. Next.

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