China’s HSR network is both impressive and financially viable:
According to a report late last year, four of the country’s high-speed rail lines achieved break-even since the bullet trains started running full-speed, intercity services – with ticket revenues matching costs, including debt payments – on several routes, including Beijing to Tianjin, Shanghai to Nanjing, Beijing to Shanghai and Shanghai to Hangzhou lines.
Not only does the high-speed rail system work, it’s financially workable too.
Note how they include debt payments in the cost calculations, whereas in the US we only include operating expenses. Of course, it helps when your construction costs are really, really low:
The web of bullet train lines will reach 18,000km by 2015, Sheng Guangzu, minister of railways, told a recent rail conference. That means more than 8,000km of newly built stock will be put into service within three years. The plan is to expand this to 50,000km by 2020, with four main lines running north and south, and another four east and west. The high-speed train pulls in to vast, customised stations, with terrific facilities.
Investment in the high-speed rail network was a big part of China’s infrastructure spending programme in 2008/2009, when Beijing pushed out a four trillion yuan (€490 billion) stimulus to fight the financial crisis. The rail ministry plans to invest 650 billion yuan (€76 billion) in railway infrastructure, aiming to have 5,200 kilometres of new railways opened this year.
All of the new HSR capabilities is causing major disruption for Chinese airlines. In the long run, they will have to shift to more international service.