By Lau Nai-keung (China Daily)
Updated: 2008-02-01 07:24

China began building super highways across the country about two decades ago, and now its 45,400 km network is second only to the United States. According to plans, by 2030, a total of 85,000 km of super highways will be built, comparable to the length of the US highway system in 2004.

But with the price of oil hitting the $100/barrel mark, cars lining up in front of gas stations in Guangdong, and traffic jams in Beijing, it is a sure sign that the auto-economy is not going to work in China.

The emphasis on cars is going to change, as in the 11th Five-Year Plan starting in 2006, rail transportation is now in high gear. Within this planning period, a total 125 billion yuan ($16.9 billion) will be used to build 19,800 km of new railways, of which, 9,800 km will be dedicated to passenger lines.

On October 1, last year the railways launched its sixth round of speed lift. On major trunk lines, the cruising speed is now 200 kph, twice that of cars. By 2010, traveling from Wuhan to Beijing, Chongqing, Chengdu, Guangzhou and Shanghai will take from four to six hours. In addition, the speed of freight transportation has also been boosted to 120 kph.

Special rails now under construction will have trains traveling at more than 300 kph. One example is the Beijing-Shanghai line, which costs 220 billion yuan. When completed in 2010, traveling between these two major cities will only take five hours. It currently takes more than eight hours.

Another one under construction between Hong Kong and Guangzhou will shorten traveling time to within one hour. The same is happening between Beijing and Tianjin. The mass transportation systems of cities, such as subways and light-rails will dominate as passenger carriers. Visitors to the Beijing Olympics this summer will witness this new phenomenon. Similar constructions are underway in Shenzhen and Dongguan.

For a vast and populous developing country like China, it has finally found the logical solution to its transportation problems. Cars are too polluting and too inefficient for intra-city commuting; and they are too expensive and too slow for inter-city traveling. On the other hand, oil-guzzling airplanes are too small and much too expensive.

If we count the time to and from airports, which are now further away from city centers, and the check-in and check-out times, inter-city trains running at about half the cruising speed of airplanes can sometimes be faster, more convenient and much safer. Overall, rail is also a lot friendlier to the environment.

Despite the previous emphasis on cars, rail transport is still the most commonly used mode for long-distance travel in the country. The rail network of 76,000 km, is number three in the world, after the United States and Russia.

China has about 20 domestic railway routes connecting all provinces, except Macao. It is one of busiest railway networks in the world, moving 24 percent of global rail traffic with just 6 percent of the world's tracks. In many respects, it is by far one of the most efficient railway transportation systems in the world.

The Spring Festival travel period, called chunyun in Chinese, is the peak season of the year. Last year, about 150 million people traveled by rail during the 40-day festival period. This means an average of 3.9 million passengers a day, compared to the daily average of 2.4 million.

Today, almost all rail operations in China are owned and operated by the Ministry of Railways. The rail transportation system is one big State-owned enterprise (SOE), perhaps the biggest in the country in terms of employment, and also the largest in the world.

Modernization of the system is a highly capital intensive undertaking. So far, all the money comes directly from the government, but it is going to change. The Guangzhou-Shenzhen Railway and a railway construction company are now listed on the Hong Kong Stock Exchange. More related IPOs are in the pipeline.

The Ministry of Railways recently began issuing bonds, 15 billion yuan worth of 10-year bonds on the interbank market, at a coupon rate of 5.53 percent. Intra-city subways and light-rails are mostly built by the local governments using various ways of financing. This is going to be a hot spot for foreign investment.

Rail transportation development plans are rapidly unfolding, people will soon find their perception of distance completely altered. This will lead to a lot of ramifications currently beyond imagination. The map is shrinking, people's mobility has been greatly enhanced, and regional barriers and differences are breaking down. All this will completely change how the Chinese people live and work.

For example, the modern courier system which originated in the US, with the hub-and-spoke concept pioneered by FedEx, is basically air-based. But in China, there is no alternative but to modify it to be rail-based. Even today, the bulk of the country's inland cargo is carried by trains traveling overnight.

The cities around the Pearl River Delta, including Hong Kong, Shenzhen, Dongguan, Guangzhou, Foshan, Zhongshan, Zhuhai and Macao are all within one hour's traveling distance. It is in effect a mega city of about 40 million people. Or imagine Beijing and Tianjin merging into one, overlooking the Bohai Bay Area, and encompassing the entire north and northeastern part of the country.

There are also plans to revive the land-bridge linking the Asian and European continents by rail, thus reducing transportation time and costs, and boosting the economies of the Central Asian countries along the way. Another railway originating from Yunnan province in the southwest, and going all the way down to Thailand and Vietnam is now under construction. This will add substance to the "ASEAN plus one" free trade area, and the Beibu Bay development plan, which has just received the nod of the State Council. With improved rail transportation, the international map is shrinking too.

Imagine the opportunities and challenges the development of the Chinese rail system will offer. It is mind-boggling.

The author, from Hong Kong, is a member of the National Committee of the Chinese People's Political Consultative Conference

(China Daily 02/01/2008 page8)