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High speed trains – 300kph will do for now

By John Ross: 0 Comment(s)Print E-mail China.org.cn, June 29, 2011

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The Beijing-Shanghai high-speed railway will open to traffic on July 1.

The opening of the new Beijing to Shanghai line again concentrates international attention on China's high speed rail network. Its development has become a major issue not only for China's economy but for its international image.

I therefore read the discussion on the operating speed of the new system, whether it should be 300km or 350km an hour, with interest – in this case a professional one. The economic and financial side of rail systems is something I am familiar with. When running London's business policy the most expensive project I was in charge of was the nearly $20 billion rail connection from London's airport to its financial district – Crossrail. Successful negotiations for its construction involved a constant fight between engineers, who wanted the maximum performance at the expense of price increases, and economic policy makers who wanted the most economically rational development. The latter meant delivering the fundamental system, but at the lowest costs even if that did not mean the highest theoretically possible operating performance.

As China's high speed rail system involves the same economic principles it is worth explaining why this question of the operating speed is important as an economic issue – and why those who want the system to operate at 300 kilometres an hour, for the present, are correct.

The high speed train network is the most visible international symbol of China's technology. Naturally, China already has world ranking high-tech achievements. Huawei is the world's second largest telecommunications equipment manufacturer. China launches moon rockets. But Huawei is primarily a business to business company, most people don't directly come into contact with it. Moon rockets are something which impress people purely as spectators – no one experiences them directly.

But everybody knows trains. For hundreds of millions travelling on one is a daily experience. China's high speed trains fuse economic importance and huge symbolic value. They combine journey convenience and increased economic efficiency through shortening travelling times, have high export potential, are an important part of the fight against climate change because they can replace aircraft over significant distances, and are a symbol of China's rising technological prowess. No wonder China's high speed trains attract international attention.

If China succeeds with its high speed rail system, even more if it can sell it abroad, it will be a huge blow against the false claim that China can only produce low end products and does not have the potential to compete in high tech.

The strategy that has built China's prowess in high speed trains is one that has worked in other industries. This strategy uses the huge size of China's domestic market to build up large scale of production – China has the world's largest high speed rail system. This allows money to be ploughed into lower prices and high R&D. On that basis it is possible to enter other countries markets – particularly, initially, markets of rapidly growing developing countries. This strategy has helped make Haier and Huawei such international successes and has been used by Lenovo during the last two years with dramatic growth results.

But while the high speed train system uses the same strategy from an economic point of view, the difference in scale and technology is a quantum leap for China. In high speed rail, internationally China is going into competition on huge projects with some of the world's most advanced companies and operators – notably Japan's bullet trains and France's TGV. The fact that countries such as Russia, Kazakhstan, and Saudi Arabia are interested in, or have placed orders for, China's high speed trains in preference to such competitors shows the potential.

This is the fundamental context of the decision about whether the operating speed of China's new high speed trains should be 350km an hour or 300km an hour.

There is good reason to believe the trains can operate above 300km an hour. Trains on the Guangzhou-Wuhan line, which has been running for more than a year, are reported internationally as averaging 313km an hour which, with acceleration and deceleration, implies running speeds above 300km an hour. On test runs the trains reached 394km an hour. All ran safely. There is no basis for claims by foreign competitors that the reduced speed is due to safety fears.

But there are good reasons not to run trains at their maximum speed. Most importantly costs rise rapidly at high speeds. Increasing a train's speed by 10 percent increases its operational costs by far more than 10 percent. And that translates into higher ticket prices.

The most serious problem facing China's high speed trains is not safety, for which there have been no significant problems, but the ticket price – an economic question. China is still a developing country. High speed trains cost far more to operate, and therefore require higher priced tickets, than low speed trains. Keeping prices down as much as possible, widening the range of people enjoying the huge travel time benefits, is much more important than cutting the journey time by half an hour for a wealthy individual travelling business class from Shanghai to Beijing. As China's economy grows, and people become better off, provided the system has been built with the right technical capacity, speeds can be raised – which means ticket prices can gradually increase as people become better off.

Trains exist to serve people and the economy, the economy and people do not exist to serve trains. If 300km an hour keeps ticket prices down, but puts the fundamental high speed train system in place, it is right for now.

I have the greatest respect for engineers. London secured its vital new rail link only because the engineer who was earlier in charge of constructing Hong Kong international airport, Doug Oakervee, shaped the engineering into a form which met the economic priorities – something financial specialists did not have the technical knowledge to achieve. But engineering must serve economic policy, not vice versa.

That is why, for now, the decision to run China's high speed train system at 300km an hour is the correct one. It is an economic decision, not a railway one.

The author is a columnist with China.org.cn. For more information please visit: http://www.china.org.cn/opinion/node_7080931.htm

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