China is in the middle of an incredibly ambitious railway building project. The plan is to expand the Mainland’s network by nearly 19,000 miles by 2015, 8,000 of which will be high-speed trains. It is a $750 billion project, which has seen a plethora of deals struck with Japanese, European and North American companies.
Bombardier Sifang has a $4 billion contract for 80 high-speed trains, and Siemens has a similar deal. Kawasaki Heavy Industries has licensed a Chinese firm to build 140 of its trains for $6 billion. And IBM is selling software to manage the network efficiently.
But despite the whizz-bang ambitions, all is not well. The government is hoping that the network will tie the country together, boosting social mobility. But it is unclear how the railways will be paid for. Fares are not high enough to cover the costs of building the network, but are already high enough to trigger widespread criticism.
The most recent flashpoint has been over the new Wuhan-Guangzhou high-speed link, which reaches speeds similar to the Shinkansen trains in Japan. Tickets for the line are priced at airline prices – the very top classes sell for nearly 1000 yuan. They are so expensive, in fact, that the train has been barely occupied, despite its amazing technology.
To counter the low occupancy, the government has cancelled 13 other trains that plow the route between the two cities, and Wang Yongping, the spokesman for the Railways ministry, even claimed that the train was priced competitively, since the journey between Berlin and Frankfurt sells for "thousands of yuan".
He soon came unstuck when eagle-eyed Chinese internet users pointed out that a ticket between Berlin and Frankfurt actually sells for around Eu29. And that the average income in Guangzhou is considerably lower than the wage in Berlin.