Title - Asia Times Online :: China News, China Business News, Taiwan and Hong Kong News and Business.

China's workin' on the railroad
By Michael Mackey

Sterling Seagrave, in his non-academic history of Republican China's pre-eminent Soong family, the Soong Dynasty, recounts that toward the end of his life the founding father of modern China, Dr Sun Yat-sen took an interest, either wistful or distracting, in a potential Chinese national railway system. Eighty-plus years on, that dream is starting to come to full fruition.

While in the age of airplanes and the Internet, trains don't symbolize the same technological and national advancement they meant then, rail is still a key part of China's current development strategy. The first point about Chinese railways is the most basic: the network is comprehensive and nationwide, and, despite various problems, is being expanded, upgraded, and increasingly connected to the rest of the world.

It is also big: the third largest in the world at 75,000 kilometers, behind only America at 230,000km, and Russia at 85,800km. Historical figures show the scale of development: in 1949, China had only 21,800km of railway lines, of which only 11,000 was open to traffic. By 1999, the total had risen to 57,900km. Clearly, a great deal of hard work - and heavy government spending - was behind the fulfillment of Dr Sun's dream.

China's extensive plans for further expansion of the rail network exist in the context of a general increase of infrastructure spending, which doesn't include just hardware, such as ports, roads and tracks, but invisible essentials such as broadband. The rail infrastructure plans are extensive and, according to reports, a government priority; with the economy starting to clog at certain key junctures, both new lines and capacity expansion of existing lines are needed. "It will be the [railway] ministry's top priority to break the rail bottlenecks," according to the official media.

New track plans
In the next five years, ie its 2006-2010 work program, the Ministry of Railways will build 10,000km of new or updated track, bringing the national total to 85,000. (Whether they will attempt to surpass Russia, their former communist rival, in that timeframe is speculation; but once it is done expect some announcement.) This will include 11 new passenger lines and seven improved lines. Plans call for the network to total 100,000km by 2020.

The most controversial aspect of these plans, outside China at least, has been the rail line linking Tibet to the rest of China (aka the Qinghai-Tibet railway), scheduled for completion in 2007. The Lhasa River Bridge, a landmark project on this line, was recently completed. The 928 meter bridge faces the Potala Palace, the historic residence of the Dalai Lamas, and the bridge was designed to look like a yak, an animal native to the Qinghai-Tibet Plateau. (A nice touch, albeit perhaps a tad patronizing.)

Of the newly laid line, some 4,000km will be double-tracked and 6,000km will be electrified, meaning that out of the total 85,000km, some 35,000km, around 40%, will be either double tracked or electrified. Thus, technological upgrading is being planned and built, not just additional mileage. Also, the ministry is hardly resting up this year in preparation for the next five-year plan. China will invest 100 billion yuan (US$12.08 billion) in building railways in 2005, almost doubling the spending of the previous year, according to Railways Minister Liu Zhijan. It will also launch 58 new projects and continue 48 projects from the previous year, involving the building of 714km of new lines, 523km of double-track lines and 875km of electric rail routes as well as starting 805km of new lines and 396km of double-track lines.

Light rail set to expand
Woven into the rail plans is a growing use of light rail, which is needed to meet rapidly rising demand for subsidiary or feeder lines - principally for moving passengers around urban conurbations such as the Pearl River Delta (which includes Hong Kong, Shenzhen, Dongguan, Guangzhou, Zhuhai, and Macau), Bohai Bay (including the Beijing and Tianjin metropolitan areas), and the lesser economic hot spot of Shandong's Jiaodong Peninsula.

On Jiaodong, a plan to create a "one hour economic circle" (a zone where any destination is reachable within one hour) will see a network of 725km of light rail built to cover the cities of Qingdao, Yantai and Weihai by 2010. "In the long run, the Jiaodong Peninsula will be blessed with an urban track transport that is capable of handling half of the area's public transport demand," said Zhao Dong, director in charge of the project's planning. Some other cities (and it's a long list) should have been so lucky.

Labor mobility issues
In the next 20-30 years, it is estimated that a jaw-dropping 400 million people will leave China's rural areas and head to the cities. What is being built now is the infrastructure that will facilitate the movement of that labor force, both from the rural areas to the towns and within the new urban areas. Within China, labor will continue for the foreseeable future to move by land, and not by air it does in some other countries. During the most recent Spring Festival (what used to be called the New Year holiday) some 145 million people, over a tenth of the population, were estimated to have traveled by rail, some 53 million by road and only 12 million by air.

There are, according to one estimate, some 31 million migrant workers in the Pearl River Delta (PRD) alone - around one-quarter of China's total transient workforce. Not surprisingly, the authorities in the PRD are foremost among those building a good public transport infrastructure, one that connects well to the principal rail lines. Thus, rail for China is one way to prevent the biggest bottleneck of all - labor shortages.

Cargo woes
It is on the cargo side, especially containerized freight, that there are problems - big ones. The problems manifest themselves in ways that are familiar the world over. "Rather expensive, and not reliable at all," was the view of one international transport company executive when queried about rail freight in China. A key and recurring complaint is the lack of freight schedules: "you have to be patient," was the weary view of the executive. Shanghai to Beijing, which on an express passenger train is a rather comfortable 12-hour overnighter, can take a week "normally" added another executive in the same company.

A more comprehensive list of shortcomings came from an executive in another company, this time an international logistics company, who again preferred to remain anonymous. The list included "no intermodal facilities, lack of tracking, low bridges, extensive delays, misroutings, unreasonable surcharges and no service standards whatsoever". So exasperating is this situation that the executive admitted, "I'd much rather put it on a blue truck," a reference to China's cottage trucking industry that generally uses old trucks built by one of China's homegrown manufacturers that will, amidst clouds of acrid black smoke, get goods from point A to point B.

Supplementing this list, another executive, equally keen not to be named, underlined the general lack of things which are important when goods are being moved: the lack of door-to-door services; the lack of an agency to deal with requests; and the lack of security. Pilferage, especially when the cartons are marked with the names of international electronics companies, is a real problem.

But the overriding problem, at the moment, is a chronic shortage of capacity. "By China's own admission, it can only handle 30% of freight demand," said Paul French, a consultant with Access Asia. The reason, he and others say, is simple - a choice of priorities within the administration. "Passenger rail is remarkably efficient," said Mark Millar, director of the China Supply Chain, "because that is the priority. The second priority is to move bulk goods." This means things such as oil, grain, iron ore and coal; and coal is, so to speak, more equal than the others.

What has happened has been that China's phenomenal economic growth has created an insatiable demand for energy, most of which is coal-generated. So moving coal around has become the focus of bulk freight services, for fear that already straining energy supplies might falter over summer. "The railways have had to be obsessed with shipping coal around," explained French. "That's an order from the CMC (Central Military Commission). Coal itself is a crisis industry, but now it's totally messed up the rail industry." According to one source, half the country's rail transport is now devoted to transporting coal, with demand having leapt so quickly and unexpectedly that the rail system has not been able to cope, and the whole system has become one huge bottleneck with an astonishing 65% of freight requests having to be refused.

And there's more. Originally the expectation was that this year would see bad harvests, but that turned out not to be the case, so trucks that were expected to be available for other commodities are now being used to move grain, which has compounded the effects of the rail capacity shortage. What China needs is a fundamental overhaul of its currently wasting rail assets.