Transportation in a Modern China

Transportation infrastructure positively impacts China by powering the nation’s economic and social growth. As China’s rapid industrialization began in the late 20th century, the need for logistical links between far away regions became evident. From 2009-2019, dedicated High Speed Rail (HSR) tracks in China have expanded by 25,000 miles, significantly higher than the rest of the world combined.¹ HSR in China operates with three tiers dependent on track quality: those with a maximum speed of 350 kph, 250 kph, and 200 kph.² Despite the logistical and mechanical difficulty of maintaining such high speeds, China’s HSR service achieves outstanding punctuality, with 98 percent of departures and 95 percent of arrivals occurring on time.³ This figure is set to increase as lines are upgraded to the newest Fuxing trains with 99 percent departure and 98 percent arrival punctuality rates.

First, China’s HSR service connects economic centers through rapid and affordable transit for businesses. HSR creates and exploits previously untapped markets by catering to passengers who did not travel under conventional transportation services.⁴ Onboard surveys have consistently revealed that around 18 percent of passengers would not have traveled if HSR was not available.⁵ In addition, passengers reported an intent to increase their travel on HSR lines by 40-50 percent from 2014 to 2015.⁶ This is further bolstered by the comparatively cheap HSR fares in China in relation to other nations, providing affordable pricing and increasing the population able to benefit from the system.⁷ HSR generates over 850 million previously impossible “opportunities to connect, trade, and exchange ideas” each year for its 1.7 billion annual riders.⁸ This is particularly evident by increasing travel volume within its competitive range of 150-1200 km. This distance range begins at the relatively short trip from Shanghai to nearby Guangzhou. The upper limit of HSR competitiveness then encompasses much of China’s eastern seaboard, extending from Shanghai to Beijing in the north or Hong Kong in the south. People, logistics, and information can flow faster and more conveniently over a wider area; and there is a better allocation of resources such as talent, capital, and technology and a better match of production and consumption, thus driving economic growth. Li Qingfu, a sales manager at a Chinese textile company who takes advantage of the speed and punctuality of HSR to connect with customers, enthuses, “‘More frequent access to my client base has allowed me to more quickly pick up on fashion changes in color and style. My orders have increased by 50 percent.’”⁹ As the system continues to grow, businesses are eyeing the new possibilities HSR creates. World Bank senior transport specialist in Beijing Gerald Ollivier notes, “‘What we see very clearly is a change in the way a lot of companies are doing business.’”¹⁰

Consequently, the nation has experienced an explosion in productivity. A World Bank report estimates China’s rate of return on HSR at 8 percent overall, a commendable result for such a large infrastructure megaproject.¹¹ The World Bank identified user time savings as the service’s largest contribution, with operating cost savings and externalities contributing about 30 percent.¹² However, the report highlights the impact HSR has on facilitating regional development in areas connected by the service as China’s population urbanizes, which is expected to contribute more to economic growth as HSR matures.¹³ In particular, the World Bank reports that “the development of the central and western provinces is now a prime objective of Chinese policy.”¹⁴ HSR is seen as a powerful tool to achieve this goal, leading to its rapid and extensive deployment. The proliferation of the HSR network has enabled the government to alleviate traffic poverty whereby workers are constrained in their labor opportunities by their transportation options.¹⁵ By connecting regional economies, economic activity and development will diffuse into underdeveloped regions. Small and medium sized cities in particular will benefit from this transition, illuminated by land values burgeoning by 3 to 13 percent in areas near HSR stations, with those closer to the station experiencing larger growth.¹⁶ This has culminated in the creation of integrated city regions where families living in one city may travel by HSR to another for work, increasing labor mobility.¹⁷ In 2016, nearly one in five HSR users traveled for this reason.¹⁸ In sum, HSR has roped together disparate economic sectors through operating a unique service that fits China’s needs.

Likewise, the Belt and Road Initiative (BRI) propels the nation’s international trade. The BRI was first proposed by the newly elected President and General Secretary Xi Jinping in 2013.¹⁹ As of 2020, the initiative has expanded to include nations whose total populations add up to 4.6 billion, forming 61 percent of the world.²⁰ The initiative is composed of two major parts: the Silk Road Economic Belt and the New Maritime Silk Road. Of the overland belt, the Belt and Road Forum (a forum for the nations partaking in the initiative) has identified six significant economic corridors, connecting China and other nations across much of Eurasia and parts of Northern Africa.²¹ Research by the World Bank found that shipment times decreased by an average of 3.2 percent between corridor economies (which are connected by one of the six major corridors) and the world, while trade between multiple corridor economies flowed 4 percent faster.²² Trade along an individual corridor saw even greater decreases, with times dropping by 8.5 percent on average and as much as 12 percent on certain corridors.²³ These increases in transit efficiency enable substantial cost savings. Aggregate trade costs between corridor nations and non-corridor nations are expected to fall by 2.8 percent after all BRI projects are completed, while corridor nation to corridor nation trade will see decreases of 3.5 percent in cost.²⁴ These reductions in cost allowed for 6 trillion dollars worth of cargo to pass between China and BRI nations between 2014 and 2017.²⁵ This number is expected to further rise, as the World Bank report predicts that corridor economies (including China) will increase exports by up to 10 percent by 2030, significantly outcompeting the world average of 6.3 percent.²⁶ Economic activity, particularly for Chinese companies, will rise as barriers to trade decrease. The same report projects that BRI corridor nations will benefit from a 1.2 percent gain in real income.²⁷ As a result, the BRI pays dividends for China’s cross-border commerce.

Finally, HSR creates the means for sustainable urbanization through rapid transit and tactical station deployment. Increasing urbanization is a necessary step towards national growth, as cities create more opportunities for their residents.²⁸ If current levels of migration and fertility are kept, the proportion of China’s population in urban centers is expected to double from 36.1 percent in 2000 to 62.2 percent by 2030.²⁹ However, the rapid population migration to cities has side effects as well, with standards of living falling as megacities grow through increases in pollution and congestion. China’s solution to this problem is to construct HSR lines across the nation. The sweeping upgrades to China’s transportation system have brought previously distant locations together, enabling Chinese people to receive the benefits of urbanization without the associated costs of living in a sprawling megacity.³⁰ This effect is achieved by providing the option for Chinese workers to take advantage of low housing prices in smaller satellite cities, then commuting via HSR to large metropolises with more economic possibilities.³¹ This dynamic is clearly seen through an examination of internal migrants in China, which exploded from 1990-2010 before plateauing.³² This correlates with a significant increase in transportation construction during the time period. China’s first highway was completed in 1988 and the Beijing-Kowloon rail line, described as China’s “transportation artery,” opened in 1996.³³ By 2008 however, the Beijing-Shanghai HSR line became the last important HSR project in China before 2016.³⁴ China’s position as a developing nation whose urbanization is ongoing poses unique opportunities. Chia-Lin Chen and Biao Wei, authors of “High-Speed Rail and Urban Transformation in China: The Case of Hangzhou East Rail Station” published in Built Environment, assert that the “strategic planning aspect [behind HSR] could play a key role in driving urbanization and industrialization in the long term.”³⁵ Thoughtful placement of Chinese HSR stations in suburban neighborhoods on the outskirts of existing city centers drives outgrowth and avoids the perils of uncontrolled population density.³⁶ To a great degree, HSR is a catalyst for social growth in China by accelerating urbanization while maintaining high standards of living.

Some might argue that the construction of HSR outside of metropolitan centers harms the Chinese people. However, this strategy avoids inner city congestion and promotes new development which will result in more benefits for the people of China.

To summarize, transportation infrastructure benefits the nation by contributing to China’s economic and social advancement. Chinese High Speed Rail has greatly reduced travel times, enabling increased economic activity. The Belt and Road Initiative expands the Chinese economy’s reach across Eurasia, enabling Chinese companies to globalize and reap the rewards of increasing trade integration. HSR construction eases obstacles to migration and strategically develops underutilized land to facilitate increasing urbanization while maintaining standards of living.

Cover Image: Photo by Jiang Guo on Unsplash

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