China’s high-speed rail system is a $2 trillion waste that makes it harder to deliver freight and goods

China’s high-speed rail system is a $2 trillion waste that makes it harder to deliver freight and goods
Joe Biden, Xi Jinping

“China’s high speed rail network is a giant, unprofitable sinkhole of $1.8 TRILLION worth of debt,” notes Lawrence Person. It loses money at a rate of $24 million per pay, rather than paying of its debt. The $1.8 trillion in debt incurred to build the network is three-times bigger than the economy of China’s richest city, and  bigger than the GDP of all neighboring countries (such as Russia) other than India. Money and track devoted to “high speed” rail comes at the expense of freight railroads, making it harder and more expensive to deliver badly needed goods and raw materials.

As Person observes:

  • Return on high speed rail investment is only about 2%, and the bulk of bond payments for loans are coming due over the next few years. “Cash flow from railway transportation revenue isn’t enough to cover the operating costs, let alone the ability to pay the debt and interest.”
  • Local government debt levels are around 100%.
  • “More than 85% of the funds raised through urban investment bonds are earmarked for repaying old debts with new ones.”…..
  • High speed rail can’t transport heavy freight…
  • High speed rail occupancy rate is only 30%, and is still too expensive for most Chinese to use.
  • High speed rail construction has squeezed out much-needed construction of regular rail. “China’s rail freight capacity can’t meet market demand. China’s market share of road freight turnover has risen rapidly to 49% market share in 2016.” China rail has jacked up freight costs to make up for losses on high speed rail.
  • China’s freight trucks get overloaded all the time.
  • China’s containerized shipping accounts for 40% of global trade, but “the proportion of China’s sea rail intermodal transport volume in 2017 was only about 2.5 percent.” 84% of port containers go out by road.
  • So why all the money poured into high speed rail? Opportunities for corruption. Officials see the high-speed rail project in which China is involved as a lucrative opportunity. China’s former minister of railways, known as the father of high-speed rail, was sentenced to death for corruption.

Despite the failure of high-speed rail in China, the Biden administration wants to waste hundreds of billions of dollars on “high-speed” rail boondoggles in the United States. Last June, the Biden administration announced that it had restored a federal grant for California’s “high speed” rail project, even though it has been plagued by environmental lawsuits, delays, and cost overruns. The grant had been canceled under the Trump administration, which pointed out that the project was a “disaster” due to delays and ever-rising costs. As the Las Vegas Review-Journal noted, the rail project’s cost had more than tripled to $100 billion, and completion dates had been pushed back by more than a decade.

“The state’s political class bamboozled voters into approving a high-speed rail project intended to ultimately connect Los Angeles with San Francisco. Construction was supposed to be completed early this decade, and residents were assured that the shiny new ‘clean energy’ train could be theirs for the low, low price of $30 billion,” the editorial board wrote. “Instead, the project is more than a decade behind schedule and is now projected to cost $100 billion…and counting. Officials now hope they can complete a 171-mile stretch between Bakersfield and Merced by the end of the decade.”

Almost no one wants to travel the obscure route that is likely to be completed — from Bakersfield to Merced — by rail.  The two cities are already connected by a speedy highway, California Route 99. It only takes a little over two hours to drive from one city to the other. Merced has only about 80,000 people, so it is not an important destination. It’s a city with an extremely high poverty rate, and few attractions for either tourists or business travelers.

This rail project is so expensive that it will cost more to travel by train than by airplane, even though traveling by train is slower. As the Review-Journal notes, there’s no evidence that “high-speed” rail can “compete with air travel in terms of time or price.” Reason Magazine says that few people will ever ride California’s “high-speed” rail system, because it “will have ticket prices higher than airfares and will take nearly twice as long as flying.”

The rail project will also harm the environment. The Review Journal calls it an “environmental nightmare.” As the Daily Wire notes, “During the project’s more than 10-year life so far, it has been sued multiple times by environmentalists for harming wildlife along the proposed route.”

Cars and buses consume less energy per passenger-mile than the little-used trains will, and simply building the rail line results in greenhouse gas emissions. Operating high-speed rail will “take massive amounts of electricity,” “raising questions about the power grid’s ability to meet the demand,” says the Fresno Bee. “High-speed trains require huge amounts of infrastructure” compared to a “four-lane freeway,” says a transportation expert.

Bullet trains are usually white elephants. South Korea abolished its celebrated high-speed rail line because it couldn’t cover even the operating costs of keeping the trains running (much less its fixed costs). Despite Japan’s much-vaunted bullet trains, most Japanese don’t take the bullet train either; they take buses because the bullet train is too expensive. Bullet trains do interfere with freight lines, so Japanese freight lines carry much less cargo than in the United States, where railroads—rather than trucks—carry most freight, thereby reducing pollution and greenhouse gas emissions.

If California uses existing rail lines for high-speed rail, that will harm the environment, by crowding out more environmentally-friendly freight trains. As businessman Warren Meyer notes at Coyote Blog:

The U.S. rail system is optimized for freight, vs. European and Japanese systems that are optimized for passengers (it is hard to do both well with the same network). The U.S. situation is actually better, much better, for energy conservation.  I wrote in detail about this before:

First, consider the last time you were on a passenger train. Add up the weight of all the folks in your car. Do you think they weighed more or less than the car itself? Unless you were packed into a subway train with Japanese sumo wrestlers, the answer is that the weight of the car dwarfs that of the passengers it is carrying. The average Amtrak passenger car apparently weighs about 65 tons (a high speed rail car weighs more). The capacity of a coach is 70-80 passengers, which at an average adult weight of 140 pounds yields a maximum passenger weight per car of 5.6 tons. This means that just 8% of the fuel in a passenger train is being used to move people — the rest goes into moving the train itself.

Now consider a freight train. The typical car weighs 25-30 tons empty and can carry between 70 and 120 tons of cargo. This means that 70-80% of the fuel in a freight train is being used to move the cargo.

Trains are just not convenient for most riders. Mass transit carries fewer than 3 percent of all commuters to work, even in the nation’s 50 largest urban areas, a percentage that continues to fall despite rising spending on mass transit.

Trains are convenient for shipping heavy goods long-distance. But freight trains rely heavily on private infrastructure, rather than publicly-funded infrastructure. Most of America’s freight railroads build and maintain their infrastructure with little or no government assistance.

LU Staff

LU Staff

Promoting and defending liberty, as defined by the nation’s founders, requires both facts and philosophical thought, transcending all elements of our culture, from partisan politics to social issues, the workings of government, and entertainment and off-duty interests. Liberty Unyielding is committed to bringing together voices that will fuel the flame of liberty, with a dialogue that is lively and informative.


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