When the world's first high-speed magnetic levitation train slid silently into its space-age station in Shanghai's Pudong financial district last December, it represented a beacon of hope to China's long-suffering railway industry. Modern technology, it seemed, would offer salvation to an industry that has suffered from decades of under-investment and incompetent management. Soon, the Chinese press was gushing with stories of a nationwide network of maglevs that would streak between cities at more than 400km/hour, suspended by opposing magnets on a cushion of air a few millimetres above its track.
The reality, though, is more complex. While the maglev remains a potent symbol of Beijing's plans to reform the nation's railway infrastructure, it is only one of many programmes initiated since the 1980s aimed at arresting rail's long slide in competitiveness against other types of transport.
Among other reforms, China has feverishly built new track, cut back a bloated payroll, increased tariffs and introduced new inter-modal services to attract more domestic container traffic. In 1998, the government finally broached the mammoth task of restructuring the railway bureaucracy when the monolithic Ministry of Railways (MOR) was forced to divest related businesses, such as locomotive construction. The next year, as part of a government-wide initiative, Beijing ordered the ministry to separate commercial and regulatory functions. Although this process is still far from complete, responsibility for railway operations and management has now been spun off to 14 regional authorities (which are set for further consolidation), leaving the MOR to concentrate on policy-making and infrastructure planning.
Even with these changes, however, rail remains in deep trouble. According to Graham Smith, lead transport specialist with the World Bank in Beijing, Chinese railways are not the only ones having a tough time. Railway decline is a global phenomenon caused by the migration of more and more traffic to alternative mediums, especially highways. And the trend shows no sign of slowing, notwithstanding the introduction of high- speed services such as France's TGV.
Further reform is therefore on the cards. Pricing, in particular, remains unsophisticated, especially for the freight market, which represents at least 80 percent of China's rail business, according to Smith. In addition, "increased containerisation would help railways focus on higher-value products instead of bulk freight such as coal", especially for long-distance shipments of more than 500km. A competitive market would also drive efficiencies: "Beijing could set up competing services between regional networks that would allow a degree of competition between markets," he suggests.
Improving infrastructure is another priority. "One of the greatest concerns is over capacity," says Smith. "At the moment, rail is struggling to keep up with demand, which has created bottlenecks in the system." To address this, Beijing has pledged to boost rail spending between 2001-05 to RMB350bn, and lengthen the rail network by 6,000km to 74,000km. Beyond that, double tracking and increased electrification has allowed authorities to raise speeds by 10-20 percent, which has gone some way to freeing capacity.
Improved rail travel times
Speed is an especially important issue for the passenger market. After bleeding market share for years, the MOR began a campaign to increase rail travel times in 1997. The campaign seems to have been a success. Passenger train speeds have risen by 25 percent since 1997, according to official figures, while rail's share of the passenger transport market stopped declining in 2000.
The plan for a high-speed rail network is based upon creating a grid featuring four north-south and two east-west lines. At the moment, the quickest services on this grid (Beijing-Shanghai, Beijing-Guangzhou and Beijing-Harbin) operate at a maximum speed of 160km/hour across some 13,000km of track, a total that is projected to rise to 16,000km by 2005.
Improvements to the track are only one part of the high-speed scheme. Buying trains to run on them is the other, and competition is intense between three foreign consortiums intent on winning the contract. Having successfully completed the maglev project in Shanghai, the Germans are now hopeful that this contract (seen by many as a loss-leader) will be the first of many more.
Their hopes were raised further after the maglev's inaugural run when German Chancellor Gerhard Schroeder announced that German companies had already won additional contracts that would lengthen the maglev system by 300km, creating a line that would connect Shanghai with Hangzhou (southwest) and Nanjing (northwest). While official confirmation of these contracts has yet to materialise, both routes have long featured in Chinese plans to create high-speed rail corridors that link densely-populated areas around Shanghai.
Nor do maglev ambitions end there. The Transrapid consortium that owns the maglev technology (composed of the German government, Siemens and ThyssenKrupp) are also hoping to land the contract to build the already approved high-speed track that will link Beijing and Shanghai (a route the maglev could complete in about three hours), as well as other potential projects between Beijing and Tianjin, Guangzhou and Hong Kong, and even Beijing and Guangzhou.
Lower maintenance costs
The Germans tout a number of advantages offered by the technology apart from sheer speed. Superior acceleration and braking rates will result in even shorter journeys. In addition, Transrapid claims a two-thirds reduction in maintenance costs, in particular for the friction-free track and carriages, which are not exposed to the pounding received by conventional high-speed trains. Operating costs are also lower, although these are admittedly already low for conventional trains. In addition, according to the consortium, the system's high climb rate and small turning circle make it relatively easy for it to pass over or around obstacles, thereby reducing the need to build expensive structures such as tunnels.
That said, the Germans will have to overcome at least one major problem: infrastructure cost. Simply put, the Yn10bn price of the Shanghai maglev, or Yn330m per kilometre, cannot compete with that of conventional high-speed rail technologies offered by Japan and France, which come in at about Yn90m- 100m per kilometre. Beijing has reportedly said that Transrapid must cut the maglev's cost per kilometre to about Yn120-160m if it is to be competitive for the Beijing- Shanghai route. Although the longer 1,300km track would certainly offer the Germans greater economies of scale over the Shanghai project, it remains unclear whether costs could be reduced to the required level. Even if Transrapid can shave costs, it may still prove far too expensive for the route. Zhu Rongji's work report to the National People's Congress in March 2001 allocated a budget of Yn100bn, which works out to a mere Yn77m per kilometre.
Moreover, the French and Japanese are not the only competition the Germans face. The Chinese also have a programme to develop conventional high-speed train technology. According to a speech made last month by railways minister Fu Zhihuan, a domestically-made prototype recently set a Chinese speed record of 321.5km/hour during a trial on a line running between Qinghuangdao and Shenyang in the north of the country. Fu added that China would next year begin production of two types of highspeed trains capable of speeds as high as 270km/hour, while a 300km/hour version should be ready by 2005.
A long-term battle
Whoever ultimately wins the high-speed contracts, however, Chinese railways still face an uphill battle. Given the overall system's woeful state of repair, both administrative and physical, completing the necessary improvements will take many years. In the meantime, the most promising markets for high-speed trains are those that are unsuited for competing mediums. This means services that connect cities far enough apart to attract commuters away from road transport, but too short to justify flying. In other words, the same densely-populated corridors around Shanghai, Beijing and Guangzhou that are now the subject of official studies.
Whether the cost and political equations involved in building these services favours the maglev or one of its competitors is at this stage anyone's guess. But one thing already looks certain: given the maglev-like speed with which the Shanghai link has been taken from drawing board to reality, China will have several other high-speed tracks in place within the not-too-distant future.