Comment by neolefty | Hacker News Reader

Comment by neolefty | Hacker News Reader

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I have ridden those trains (spent 2011-2016 in China), and they're pretty great, but they're hard to justify economically:

> The overall bill is already high. China Railway Corporation, the state-owned operator of the train system, has debts of more than 4trn yuan, equal to about 6% of GDP. Strains were evident last year when China Railway Materials, an equipment-maker, was forced to restructure part of its debts. Six lines have started to make operating profits (ie, not counting construction costs), with the Beijing-Shanghai link the world’s most profitable bullet train, pulling in 6.6bn yuan last year. But in less populated areas, they are making big losses. A state-run magazine said the line between Guangzhou and the province of Guizhou owes 3bn yuan per year in interest payments—three times more than it makes from ticket sales.

I wish it weren't so, but they look like Iridium, as mentioned by a very-downvoted comment. The builder makes enormous losses.

But they're built now, and that isn't going to be undone. I hope.

It's a very fine line to walk though: too much profit, people hate it (it's taking money from them), run at a loss, people hate it (it's a waste of tax money).

But since it is built and owned by the government, the economical benefit is also in the equation other than operation profit. A province would welcome the bullet train network even if it has to pay, if it attracts a capital influx to the province. This is usually true: given the convenience of taking the train, a city get connected means you are almost merged into a mega city, economically.

Right now the bullet train is for passenger, but cargo trains are on the timeline now. Think of goods shipped by train but arrive almost as fast as by air: this alone would make the investment a bit worthier than it looks.

Compare this overall bill to the total amount of public and private money spent on interstate highways, bridges, interchanges, rolling stock (aka automobiles) etc in the United States.

By back of the envelope math the comparison seems to favor China. It's not even close.

Obviously also has roads bridges etc. But with a functioning train network you can build far fewer of them compared to America.

> But they're built now, and that isn't going to be undone. I hope.

I work in a city where bike commuters have to dodge trolley tracks from electric trolleys that stopped running decades ago. We're converting an old train viaduct into an elevated park, although where that viaduct goes below grade, the construction of a building within the old right-of-way prevents full utilization of what had been old railroad tracks.

In municipalities across America, you can see the scars of old train tracks criss-crossing the landscape, creating curved cuts through square city blocks, turning into hiking trails along rivers, past abandoned ruins of old mills.

With any luck, China's rail system won't suffer the same fate.

I'm pretty sure I know what city you are talking about and I've definitely been caught in the tracks all over town. At least the active line on Girard has bike lines running parallel

Are these supposed to make a profit? Isn't this a state-run project, like highways?

Aren't the debts covered by the state anyways, via taxes?

Also, economic justifications are broad concepts.. how would it compare against a country like the US that has oil and people can therefore drive cars for cheap, whereas China doesn't have oil?

Is high-speed rail a more economically efficient system than cars?

> Are these supposed to make a profit? Isn't this a state-run project, like highways?

Yes, high-speed rail could be worthwhile even if it doesn't make a profit. I haven't seen any figures about high-speed rail so it may be a good investment. But in general I think China's investment boom is bad in the long term. By taking on so much debt to fund projects that have little economic return China is setting itself up for a lost decade or two like Japan.

> Aren't the debts covered by the state anyways, via taxes?

Yes, the debt is effectively passed on to taxpayers.

> Also, economic justifications are broad concepts.. how would it compare against a country like the US that has oil and people can therefore drive cars for cheap, whereas China doesn't have oil?

Sure, you need to look at the economy as a whole and the cost of energy is a factor. But that would include the cost of coal-fired power to run the trains - including costs of pollution.

> Is high-speed rail a more economically efficient system than cars?

China already had slow-speed trains and fast airplanes. So the better comparison is between (a) upgrading the capacity of the existing rail and airport systems; (b) building an entirely new rail network.

The rail doesn't have to be profitable itself (which is a benefit of being state-owned). The more important thing is the bigger picture, is how much economic advantage it generates.

Japan does not seem to get much growth out of it.

undone, maybe not directly but indirectly. it is quite easy to keep on deferring maintenance until a line is not viable. this will be key to determining if this is a successful expenditure. what gets cut first

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