China High Speed Rail Falters
COST Commentary: This article is about the fact that high speed rail in every county, even China, is a highly subsidized transportation mode for higher income citizens and not a mass transit alternative. Even with a slow speed commuter train in Austin, Capital Metro has confirmed that it is an exorbitantly subsidized transit mode, primarily used by those with higher average incomes, who have an alternative. The very few Austin commuter riders are highly subsidized by lower income transit riders, most of which have no alternative and by taxpayers who receive zero societal benefits for their higher taxes.
I’ve recently written an extensive commentary on China’s high-speed rail network, and several blog posts (see here and here), that examines why this technology may be better suited to this burgeoning economy than ours. Well, I may be too optimistic about China. As the network gets further built out, critics are becoming more vocal as well.
American Enterprise Institute scholar Michael Barone has been following this debate and one of his recent columns in the Washington Examiner alerted me to a column by a Beijing based academic who recently pointed out the flaws in the China high-speed rail model. Like the U.S., the Chinese approach is turning out to be a subsidy for the rich and business elite, not a form of true mass transportation. Tsinghua University business school professor Patrick Chovenac writes on a blog (and with links to other more lenghthy articles on China’s social and economic transformation well worth reading):
“The problem is that high-speed rail is expensive both to build and to operate, requiring high ticket prices to break even. The bulk of the long-distance passenger traffic, especially during the peak holiday periods, is migrant workers for whom the opportunity cost of time is relatively low. Even if they could afford a high-speed train ticket — which is doubtful given their limited incomes — they would probably prefer to conserve their cash and take a slower, cheaper train. If that proves true, the new high-speed lines will only incur losses while providing little or no relief to the existing transportation network.”
The typical Chinese train rider can’t fork over the several hundred dollars necessary for a high-speed rail ticket, so they are opting for cheaper buses. In other words, Chinese travelers, like Americans and others in wealthy nations, are price and time sensitive to modes of travel.
This is not to say high-speed rail doesn’t have any place in a U.S. transportation network. Rather, it simply emphasizes once again common sense: a high-end travel option will be used by high-end travelers. High-speed rail is not a true mass mass transit option, nor can it become the backbone of national transportation network.
Samuel Staley is Director of Urban Growth and Land Use Policy