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China's Yearly Budget For High-Speed Rail: $100 Billion 230

Posted by timothy
from the just-your-opinion-man dept.
An anonymous reader writes "For all of those wondering about China's massive high speed rail network, it costs some serious cash. Running high speed lines across the nation is expensive — to the tune of $100 billion dollars a year. This covers the cost to maintain the network, build it, and pay all of the staff. The problem is, corruption has reared its ugly head. The network itself has had its share of problems, with people dying as a result. There is also the problem that many of Chinese poor make so little money they can't afford to ride it. The sad fact is that so much money is being spent, no one can even keep count."
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China's Yearly Budget For High-Speed Rail: $100 Billion

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  • by Anonymous Coward on Friday October 19, 2012 @10:00PM (#41712281)

    Where's the scandal?!

    $100B divided by 2 million employees equals $50,000 per employee -- high for China, maybe, but matches the MEDIAN male income in the U.S.

    Given that the $100B actually includes much more than employee salary, like, uh, the material costs of BUILDING the railroad, and trains, and stations, etc, the figure seems rather like a bargain.

    "The problem is, corruption has reared its ugly head." : When does that not happen to some extent?

    "The network itself has had its share of problems, with people dying as a result." : This happens everywhere.

    "There is also the problem that many of Chinese poor make so little money they can't afford to ride it." : Maybe China is planning for the future, maybe?! You know, like when their middle class is comparable in size to that in other developed nations?

    "The sad fact is that so much money is being spent, no one can even keep count." : Then what is the "$100 Billion" figure?! Sheesh! Make up your mind!

    • the material suppliers are also likely taking there cut as well.

      also you need to count up keep and running costs in that 100B

    • by Anonymous Coward on Friday October 19, 2012 @10:14PM (#41712347)

      This New Yorker article [newyorker.com] might add to the context of corruption and where the money is going.

    • by curunir (98273) * on Friday October 19, 2012 @10:22PM (#41712383) Homepage Journal

      Where's the scandal?!

      $100B divided by 2 million employees equals $50,000 per employee -- high for China, maybe, but matches the MEDIAN male income in the U.S.

      You should read the linked article [newyorker.com] (not the link from the story, but one linked from it.) The scale of the corruption seems to be reaching epidemic proportions. The story lists the yearly salary of the #2 official in the railway ministry as being $19k/yr and yet had a fortune over $100m. Another associate of the head of the railway ministry built a ~$700m business through bribes and kickbacks. The workers are, no doubt, being paid less than $1k/yr. Redo your calculations based on that and you'll find just how much money has gone missing. It's very common for officials that have been caught to have been found with tens of millions of dollars worth of bribes. One of the biggest impediments for these officials isn't actually accepting the bribes but, instead, finding a place to store all the cash since the largest bill in circulation is a 100 yuan note worth ~$16. It's gotten so bad that bribes are now commonly made in gift cards since they're able to store value more densely.

      Read the story...it's really shocking.

      • So... everything is a big "shell game"?

        What to do...
        Cash in the mattress? pfft! fiat money, not worth the paper it is printed on.
        Gold? - bubble, you can't eat it.
        Just have lots of kids! Think of the children. They are the future!

        Everything comes down to an existential question. If you can't answer it, your heirs will.
      • by jamstar7 (694492)
        Keep in mind that the 100Bil figure is 'all in'. Maintanance, salaries, upkeep, expansion, the whole enchilada. It's costing the Chinese about $66.67 per person (1.5 billion Chinese on the mainland last I heard, probably a lot more now. Still, that's not too bad. Comparable figures for the US at 66.67/person is about 20Bil, which kinda high. The whole Amtrak budget is here [google.com].
      • by Sir_Sri (199544)

        Except... this is china. The scale of corruption in ANY third world country boggles the mind. China is not particularly surprising - because this is what happens there. In America your CEO is getting a 25% raise this year, where you'd be lucky to get anything. And ceo pay is 200x the median worker pay (up from 26 in 1970), in china CEO pay is probably 25x worker pay, but they collect bribes - which by the way go in part to pay bribes up the chain to senior government officials, of 175x worker pay or mo

      • Railroad development in the 19th century USA was a cesspool of explicit and implicit corruption. It also created vital infrastructure.

        The crash in China reads at first glance like any other Horrible Example from systems safety engineering: lack of redundancy and communication, and poorly interacting emergency procedures.

    • Re: (Score:3, Insightful)

      by im_thatoneguy (819432)

      This is why we can't have nice things in the US. Instead of doing something and possibly wasting some on corruption we spend 6x the budget debating minutia and auditing the auditors. In the end we have nothing and spend decades accomplishing nothing for fear of doing something wrong.

    • "The problem is, corruption has reared its ugly head." : When does that not happen to some extent?

      It doesn't happen here. We passed a law saying that nobody can use the word "corrupt" when referring to a public official.

      "The network itself has had its share of problems, with people dying as a result." : This happens everywhere.

      True, but when people die on our railways, we investigate what happened to them. We don't just go "Well, they must have gotten lost... or... something. Oh well."

      Maybe China is planning for the future, maybe?! You know, like when their middle class is comparable in size to that in other developed nations?

      From what I've seen in my country of late, it's less about China trying to develop a middle class as big as ours, but us eliminating the middle class like them. But it's not much of a point... They are building out a high speed r

      • by tsotha (720379) on Friday October 19, 2012 @11:39PM (#41712617)

        They are building out a high speed rail network that, while capable of ferrying passengers, is not its primary purpose. China has a massive industrial infrastructure and a lot of land to cover between its mountainous and resource-rich areas and the coast, where ships pick up and transport the goods.

        You wouldn't build a high-speed network if efficient movement of freight was your primary goal. HSR is much more expensive to build and maintain, a network built primarily to move people will go different places than one built to move things like coal and petrochemicals. The US probably has the most efficient freight network in the world in terms of $/mile/ton, but if you live anywhere outside the Northeast you may as well not bother even looking at intercity rail. Unless you're a lump of coal.

        In the case of China the network links major population centers. They even blew a large fortune on a maglev line that was supposed to go from Shanghai to Beijing , though it doesn't go maglev all the way for cost reasons. They also built a line to Tibet for strategic reasons. I don't know if that's high speed, though - looking at the web site [chinatibettrain.com] it seems to average about 100 km/hr.

        • by wisty (1335733)

          Chinese HSR is often pretty slow. There's some really fast stuff, but most of it is only moderately high speed. But as you say, it's not low-cost freight lines (which China als has plenty).

    • by TubeSteak (669689) on Friday October 19, 2012 @10:46PM (#41712469) Journal

      "The network itself has had its share of problems, with people dying as a result." : This happens everywhere.

      Not like this it doesn't: https://en.wikipedia.org/wiki/Wenzhou_train_collision [wikipedia.org]
      Here's a picture of the accident scene: http://i.imgur.com/YJAAA.jpg [imgur.com]

      There was a string of preventable events, from the lowliest track worker to the people that designed the control systems, which led up to the accident.
      The Chinese Government tried to throw a blanket over the whole event, but the public outrage forced a review of the events.
      /The USA actually has a lot of rail accidents, with injuries, but almost no one dies.

      • Re: (Score:3, Insightful)

        by jamstar7 (694492)
        Yes, the US has a lot of rail accidents. No, hardly anybody rides the train anymore. Too damned expensive, something like 3 or 4 times the cost of a plane ticket. Kinda hard to kill someone on a train if they're not riding it.
      • I love the high speed rail in Germany and use it almost every day. However, every HSR system will have accidents. It's the cost of doing business when you're propelling people at 200mph for hundreds of kms or more at a time. It's almost impossible to police the entire system.

        Link to German accident where 101 people died. [wikipedia.org]

        Don't get me wrong, I hate the Chinese government's response. And I hate the fact that when you watch the videos of the train cars being buried without investigation that you can see bodie

    • by phantomfive (622387) on Friday October 19, 2012 @11:06PM (#41712535) Journal

      Where's the scandal?! $100B divided by 2 million employees equals $50,000 per employee -- high for China, maybe, but matches the MEDIAN male income in the U.S.

      Because that money doesn't go to the workers.

    • by guruevi (827432)

      100B is 0.1 Trillion for a country the same size of the US. Compare that to the military budget of either country and you should see that the problem is not necessarily cost of the project, it's the will power of the governments to invest in it.

    • Where's the scandal?!

      $100 billion budget, 1 million riders. Seems pretty scandalous to me.

      • by TheRaven64 (641858) on Saturday October 20, 2012 @04:49AM (#41713473) Journal

        Is it? That's $100,000/rider, which sounds like a lot, but that's also including a lot of capital investment. In the UK, commuter rail tickets can cost over £5000 ($8000) [bbc.co.uk], so that's about 8% of the cost, but that cost only has to cover maintenance, not construction. For an infrastructure project on this scale, break even is typically meant to be somewhere in the 10-25 year mark. If they're still constructing infrastructure, then that's quite plausible.

        For comparison, the channel tunnel cost £9.5bn to build, and finished in 1994. Eurostar made its first operating profit in 2007 and the only reason it is nominally in the black is that they effectively sold most of the company to the banks that loaned them the money. They're making something like £150m/year in operating profit (most of which goes towards financing their debt), and so it will take them a very long time to make back the initial investment. The banks are making around a 2.5-3% annual return on investment in terms of interest on the debt, but they also own the majority of a profitable company with a very valuable asset, so they have a very good long-term investment.

        More importantly, a large piece of infrastructure was built and is getting regular use. Last year, around 17 million people used the channel tunnel (plus a load of freight), and that has a huge economic impact on Britain and France. It's now feasible for someone who works in London to go to Paris or Brussels for a meeting and be back the same day, for example. But if you'd done the same sums that you just did for its 1994 then you'd have seen a £9.5bn investment for 0.3 million passengers. That's £31,500/passenger, or around $50,000/passenger. In other words, about half the per-passenger cost of the Chinese high speed rail network. Clearly a waste of money...

    • "The network itself has had its share of problems, with people dying as a result." : This happens everywhere.

      At least here in France, rail accidents are extremely rare events. A quick search at wikipedia suggests that this is no exception [wikipedia.org]

    • The New Yorker article should be the one posted, not the stupid crap of "The Diplomat". I think that the problem with chinese corruption from american POV is that they are not getting their share of it. For the corruption that Walmart or Halliburton promoted in Mexico that are in significant ways the cause of our security crisis they are only getting a slap in the wrist.

      • by AK Marc (707885)
        The real issue is that there is no scandal. The corruption is not any worse than the US railroad build. And the China trains are safer and cheaper than US highways. Corruption is a capital crime in China, but very selectively enforced. By US rules, everyone in China is guilty of corruption. But only those that cause the country or the party to lose face need to worry about it.
    • Where's the scandal?!

      $100B divided by 2 million employees equals $50,000 per employee -- high for China, maybe, but matches the MEDIAN male income in the U.S.

      Given that the $100B actually includes much more than employee salary, like, uh, the material costs of BUILDING the railroad, and trains, and stations, etc, the figure seems rather like a bargain.

      "The problem is, corruption has reared its ugly head." : When does that not happen to some extent?

      "The network itself has had its share of problems, with people dying as a result." : This happens everywhere.

      "There is also the problem that many of Chinese poor make so little money they can't afford to ride it." : Maybe China is planning for the future, maybe?! You know, like when their middle class is comparable in size to that in other developed nations?

      "The sad fact is that so much money is being spent, no one can even keep count." : Then what is the "$100 Billion" figure?! Sheesh! Make up your mind!

      Typical of those living in developed countries, you are applying your values to the money. Think not of what $100B is worth in the US. Think of what it is worth in China.

      You say that 50,000 is the median for the median male income in the US. This is a meaningless statement relative to the discussion for two reasons.
      - 50,000 is enormous in China
      - median doesn't mean shit. Most of the workers will be making a dollar a day and those in charge will take the balance.

      You say that in addition to

      • by AK Marc (707885)
        The pay for a professionally trained engineer in China is not far off from the US numbers (having had discussions with an EE working for a power company there). Well, he probably makes about half a US salary, but $50k isn't unheard of for a PE equivalent.
        • The pay for a professionally trained engineer in China is not far off from the US numbers (having had discussions with an EE working for a power company there). Well, he probably makes about half a US salary, but $50k isn't unheard of for a PE equivalent.

          Even if we take your small sample as indicative, how many of the people working on building the train system will make anywhere near that much? Some few will be engineers, yes, but most will be unskilled physical labor making (relatively) nothing.

    • You must be fun at the watercooler with your facts and logic and reasonable thinking.

      Anyway, the Brits cut costs on their rail network and it resulted in lots of people dying when infrastructure collapsed and years of totally disrupted service around the country. And the US rail system is a joke with also many many deaths thanks to lousy infrastructure.

      Corruption is indeed a problem in China but at least they are dealing with it, and not with leisure resort prisons but with death penalties. It ain't perfect

    • by AmiMoJo (196126)

      "The network itself has had its share of problems, with people dying as a result." : This happens everywhere.

      Actually the Japanese high speed rail system, the Shinkansen (bullet train), has never had a fatality. It was the first one in the world, is still the fastest in the world, exists in a country prone to earthquakes and other natural disasters, but has an almost flawless safety record.

    • This should be stomped on. It's a shill response from the cretins doing this criminal activity. They should be executed as so many are considering the moral turpitude of Chinese culture.

  • by tloh (451585) on Friday October 19, 2012 @10:06PM (#41712307)

    I don't know what kind of reputation "THE DIPLOMAT" has in the field of journalism, but this article is just pure crap. Despite the title, the article has almost nothing to do with high speed rail in China. Using recent problems that have come to light with the management of China's rail system, the article is actually just a mostly unflattering portrayal of the fiscal situation in China's military. A more accurate title for the article should be something like "Corruption plagues the PLA".

    An excerpt for you:

    This breakdown suggests that 100% of the PLA’s budget was diverted towards real requirements. But the parable of the railways strongly suggests that this cannot be right. How much of the PLA’s budget has been spent on retirement homes for generals in Florida, or funneled into private business ventures, or used to buy promotions? How much has been wasted on bogus capabilities that the military doesn’t really need, but whose purchase helped to line influential pockets? And how much has been spent on genuine capabilities, but capabilities whose price tag was hugely inflated so that highly-placed officials could skim off the surplus?

    There is almost nothing of value on high speed rail that has not been already revealed from other media sources.

    • I don't know what kind of reputation "THE DIPLOMAT" has in the field of journalism, but this article is just pure crap. Despite the title, the article has almost nothing to do with high speed rail in China.

      Yes, it's a very weird and completely pointless article. It really does start off talking about high speed rail, but then inexplicably jumps to corruption in the PLA (People's Liberation Army) and then proceeds to jump back and forth between the two topics for no apparent reason, making absolutely no worthwhile comments about either.

    • by philpalm (952191) on Friday October 19, 2012 @11:09PM (#41712545)
      They link to the New Yorker's article: http://www.newyorker.com/reporting/2012/10/22/121022fa_fact_osnos?currentPage=all [newyorker.com] Corruption is continuing in China, but it will take a major reform/progressive movement to stop it all. The New Yorker is mainly on the railroad budget and you will have to go elsewhere to find dirt on the PLA's progress/threat.
  • by npridgeon (784063) on Friday October 19, 2012 @10:19PM (#41712363)
    Well, obviously, the extremely poor can't afford to ride the train. American or European poor couldn't afford to ride the train either. I just got back. The cost of a ticket from Fuzhou to Xiamen (around 2 hours at about 200 km/h) was 122 RMB. That converts to just over $20 US dollars. Extremely inexpensive, in my opinion. There are many slower trains that are much cheaper. Many migrant workers travel by train to the cities, and back home during the holidays.
    • My understanding is that most migrant workers take busses because the trains are too expensive. I've ridden on these myself, they stack them full of bunk beds, probably not very safe, although I doubt what I rode in was the worst. However not all migrant workers earn exactly the same income, and I talked to some laborers on a (slow) train who were returning home by train.

      However the article's point is still not a good one: it is unlikely any train system could compete in price with the cheapest buses, s

    • by AmiMoJo (196126)

      This argument always comes up when talking about any large project in a country with lots of poor people. Why does India have a space programme when there are hundreds of millions living wretched existences in extreme poverty?

      The only way to you get everyone's standard of living up is to improve your country. Transport links create opportunities and new business, which creates jobs and wealth for the poor. Even if they can't afford to use these trains today they will in a decade or two.

      • by xaxa (988988)

        I'm in Beijing. I've never been to China before, and this is only night two.

        The metro is Y2 a ride. Buses are apparently Y1. That's about 20% of the prices in Europe.

        It's clear there's a *huge* middle-class, with money to spend. A soft drink at a tourist site is Y5, a soft drink at a non-tourist (no English menu) restaurant maybe Y10, as at the nice hotel. A nice meal at a normal-looking place just cost Y40 each.

        Some (special?) tea they sell here at the hotel is Y400 or more! People are buying it. Th

  • by Anonymous Coward on Friday October 19, 2012 @10:21PM (#41712375)
    What is it with Americans' hatred of passenger rail? It works, it's safe, cost-effective, and requires less government subsidy than highways or airport travel. It's also a hell of a lot more pleasant than flying.
    • What is it with Americans' hatred of passenger rail? It works, it's safe, cost-effective, and requires less government subsidy than highways or airport travel. It's also a hell of a lot more pleasant than flying.

      Here in the U.S., you get Amtrack. Subsidized, expensive, and slow. Doesn't own its own tracks, so regularly stops to let cargo trains through. It can cost twice as much as flying and take twice as long to get there. Sometimes it is faster (rarely), but never cheaper that I have heard of.

      The U.S. is

      • by Ichijo (607641)

        Here in the U.S., you get Amtrack.

        Did you know that Amtrak's only profitable line is also the nation's only high speed line, the Acela Express? It "made a profit of about $41 per passenger" [businessinsider.com] in 2008.

        That's why all intercity passenger rail ought to be high speed rail!

        The U.S. is more spread out than Europe. We have cities which are essentially islands of millions of people with hundreds of miles of cornfields between them.

        We also have city pairs that have the population density to support high speed rail. B

      • by Miamicanes (730264) on Saturday October 20, 2012 @01:06AM (#41712881)

        The problem isn't that the US is more spread out... the problem is that Europe actually HAS open space to cheaply build new rail corridors in between cities, whereas in many parts of the eastern US, you can drive a hundred miles or more without seeing anything more rural than an occasional vacant lot next to the interstate. Nebraska and Kansas might have cities surrounded by cornfields, but east of the Mississippi, our cities tend to be surrounded by hundreds of miles of single-family homes, strip malls, and office parks.

        The other problem in the US is our obsession with either keeping high-speed passenger trains 100% separate every last inch of the way, or forcing them to be capable of surviving a head-on collision at full speed with a mile-long coal train if they share tracks with a conventional train anywhere along the route... even if they'd only be running at low speed in the areas where they shared tracks (like the last mile or two into a big city station). In Europe (particularly in Germany), they built the first segment of the new high-speed tracks, and tied them in to the existing rail network at both ends... then extended them from there. In America, we piously plan to do stupid things, like build isolated segments of high-speed rail that don't directly connect to *anything*, and would force passengers to physically switch trains for years, or forever.

        HSR between ONLY Bakersfield and Corcoran, or ONLY Tampa and Orlando, is insane. Brand new HSR tracks between Bakersfield and Corcoran that continue into LA and San Francisco along the existing tracks and immediately cut an hour or two off the time it would take to make the trip at low speed, then fill in the gaps to reduce the time even more, are a great start to what's going to be an awesome HSR network someday. Ditto, for new HSR tracks between Melbourne and Orlando (eventually Tampa) that connect to the existing FEC tracks between Jacksonville and Miami.

        Engineering-wise, Acela-type trains aren't ideal... but they're actually pretty good. Their 150mph speed limit is due to Amtrak, not engineering -- Bombardier's engineers designed them to run at 186mph, and in a flat state like Florida, they could do 200mph without breaking a sweat given suitable tracks and administrative approval.

        As far as subsidies go, EVERY transportation mode is subsidized from general tax revenues. Gas taxes haven't fully supported road construction and maintenance costs since the mid-1990s (they USED to, but as gas prices have increased, the federal and state governments have gradually reduced them to levels that no longer cover 100% of costs). In 2011, Amtrak's total subsidy came out to about $4.25 per American. Nothing to really be proud of, but far from the scandalous rape some would have you believe it is... and most of THAT is for fixed costs that are basically the same regardless of whether Amtrak runs one train or ten trains through any given station per day. Under the current status quo, Amtrak can't "win" regardless of what it does. If it raises fares, it gets decried for being expensive. If it lowers fares, it gets attacked for requiring subsidies. The point is, Amtrak is Amtrak. For better or worse, right now it's all we have. In a few years, we'll have the backbone of California HSR, and FEC Railroad's new passenger service in Florida running along with Amtrak.

    • by shentino (1139071)

      I'd say that anything requiring a subsidy is inherently inefficient if anything other than externalities are being accounted for.

  • 1 - i don't know where that shift button is when the capital form of myself is needed.

    2 - 100 million is nothing compared to what that amount was worth 10 years ago

    3 - we have sent china a lot of our manufacturing machinery - are we really surprised? // I had to add a third thought...
  • $100 billion (Score:2, Flamebait)

    by Virtex (2914)

    Running high speed lines across the nation is expensive — to the tune of $100 billion dollars a year.

    Isn't that about what we pay to China every year just to cover the interest on the money our country has borrowed from them? At least all that interest money is being put to good use.

    • by jonbryce (703250)

      The money owed to China is around $1tn. I don't know what interest rate it is at, but it certainly isn't as high as 10%.

  • "One hundred... BILLION... dollars." Well, now we know what Dr. Evil is doing in his retirement. He's building a high speed rail network in China, with frickin laser beams attached.
  • Command economies result is massive misallocations of capital compared to market economies, and this is also true of China [battleswarmblog.com]. The "Ghost Cities" are the biggest manifestation of economic distortion, but hardly the only one.

    On the plus side, communist China is only killing thousands of its own people every year, a vast improvement on the millions (or tens of millions) killed in the past [battleswarmblog.com]. Progress!

  • by T-Bucket (823202) on Friday October 19, 2012 @11:01PM (#41712511) Homepage

    See, who says the US isn't investing in high speed rail! Whose $100B do you think that is?

  • The total capacity of riders is increasing at a slower rate than their population so technically the "amount" of available high speed rail is going down, lol.
  • The issue for China is there isn't enough high quality fly ash around to make the cement needed to build its railway network in a sustainable manner. Without the proper ash, rail tracks have a lifespan of a dozen years vs the usual century, and thus need to be constantly maintained and rebuilt. The whole adventure reeks of money wastage...

    http://www.theatlantic.com/international/archive/2011/01/is-china-overreaching-on-high-speed-rail/69490/ [theatlantic.com]

  • /Rolls Eyes (Score:5, Funny)

    by Uberbah (647458) on Saturday October 20, 2012 @10:26AM (#41714571)

    "For all of those wondering about America's massive interstate highway network, it costs some serious cash. Running roads across the nation is expensive - to the tune of $50 billion dollars a year. This covers the cost to maintain the network, build it, and pay all of the staff. The problem is, corruption has reared its ugly head. The network itself has had its share of problems, with people dying [cdc.gov] as a result. There is also the problem that many of America's poor make so little money they can't afford to ride it. The sad fact is that so much money is being spent, no one can even keep count."

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