Someone on Wikipedia added the following a few days ago:
China’s HSR system as a whole, however, has incurred massive financial losses.[9] In terms of annual operating revenues and expenditures, only six lines break even while the rest have huge losses.[10] Most of the newer lines suffer from low passenger volumes, as many of their stations are located well outside centers of metro areas and without direct local highway nor light rail connections. Officials have used high-speed rail construction primarily to drive up land value for land sales, especially in third and fourth-tier cities, rather than prioritizing convenience and affordability of ordinary travelers.[11] As of the end of 2023, China’s HSR system has an accumulated debt of $839 billion due to opaque financing by local governments.[12]
Here are the sources:
If you look at the sources, [9] is from the “libertarian” Reason Foundation which is pro-car and anti-transit, and the editor presented it as an outright fact. [10] is not true (it’s also a dead link for an article from WSJ which is questionably framed); more than six lines are profitable to some extent and the “huge losses” are the exception and not the norm.
What is most problematic is [11], which has been thoroughly rebutted here (this person has great English-language coverage of transit in China, please check them out!).
The person doesn’t even acknowledge the controversy that each of the these sources have. I wonder if there’s an agenda going on, or if the liberal narratives have been repeated so much such that people just unironically believe them.
Officials have used high-speed rail construction primarily to drive up land value for land sales, especially in third and fourth-tier cities
Oh my god they’re building infrastructure! Stop the presses!
Imagine driving up land values by actually making land more valuable instead of artificially sabotaging housing construction like in the US.
Infrastructure that connects a whole country, makes the developed coast and the less developed inland less separated, and reduces the need for car and air travel, needs to make a profit or it is a failure.
Pewpew guns and shooty missiles and vroom vroom tanks and explody bombs and honk honk battleships may cost some amount of money to make and deploy, but any such cost is more than paid back for when, you know, um, we epically own the bad guys or something
Infrastructure that connects a whole country, makes the developed coast and the less developed inland less separated, and reduces the need for car and air travel, needs to make a profit or it is a failure.
even from a capitalist perspective this is short-sighted and makes little sense
have they ever heard of the concept of a loss-leader?
make a relatively small loss on the trains, get a shitload of people into the cities to buy stuffOr just keep rural people out of unemployment, or maybe even improve the economy of small inland cities.
nah better decrease services from 5 trains per hour to 3 per day, and increase ticket prices 50x, so that we make the money back asap
US capitalists think that AI slop, the imaginary idea of AGI, and accelerating people losing their jobs somehow are better loss leaders than proven transit infrastructure; they’re basically trying to sink the ship we’re on and build gilded lifeboats for themselves.
Look, it’s just common sense that explosions are cool. That alone is reason enough to bomb some people, no matter the cost. You’ve gotta think about how it would look to walk away from a children’s hospital while the AGM-65 Maverick missile strike you just called in hits, without even turning around to watch.
We live in squalor, sure. But here in burgerland it’s gender-affirming squalor.
I mean, defense spending really is necessary, it’s just that what the US does is offense spending…
For most of the world, defense spending is necessary because of the US.
At least they renamed the department to reflect that
Operational profitability is not important if economic impact far exceeds any difference in profitability to run it.
Long-term benefits of having all of this infrastructure pre-existing are very high. Putting down a HSR line after an area is built up enough to make it profitable means building a line through a highly developed and dense area. This is costly and extremely slow because it’s difficult to move people. It also means that lines won’t be as straight as they could be if you put them in before the urban development even appeared there.
In the longterm the benefits are pretty obvious to anyone who isn’t being a dickhead about the topic.
GHOST CITIES GHOST CITIES
ELECTRIC VEHICLE GRAVEYARDS
Chinas planning for future growth really confuses westerners, doesn’t it? I guess western capitalists are so stuck in the present that they can’t learn from the past or plan for the future.
America can’t even plan 1 year ahead.
What if the fast, efficient movement of people enabled more economic value to be created than the amount of money put into it, and in the aggregate would be a net positive economically?
The problem is not that the HSRs are unprofitable (which is to be expected for public transits), the problem is that the central government does not run deficit spending to finance these large scale infrastructure, so the local governments had to take out loans (with shadow banks before 2015, and direct municipal bond issuance after 2015) to invest in these projects.
And because these public transits companies are not profitable, many of them also double as REITs to extract profit from the land value rise. The most famous being Shenzhen Metro who had been transfusing blood to the dying Vanke, a property developer once hailed as a successful model just 2 years ago as Evergrande was imploding under its hyper-financialized operational structure.
It is a neoliberalized model that shares a lot of similarities to Japan’s. This is why a lot of the local governments are in a massive debt bubble right now as the property prices plunge, a problem made worse by the fact that the People’s Bank of China have seemingly “run out of its tools” after the massive 12 trillion yuan debt resolution policy in November last year.
Read my post here about how all these troubles really started with the 1994 Tax Sharing Reform that forced the local governments to tie their budgets to land finances.
How about making all public transit free so that it all operates at a loss?
Yeah, just like highways.
Or better still, make highways have ticketed entry and make the trains free.
I’ve never heard a better argument for making every road a toll road.
And in the meantime also please redirect the money used for wars to build some infrastructure for the free high-speed trains.
”make highways have ticketed entry"
This this this this this this this this this this
no you head the guy. every road is a toll road now, it has to break even. no more government handouts
no you head the guy
it has to break even
What is this, socialism? It need to generate profit, and more profit each quarter.
You’d think they would learn at some point, not everything needs to be done for profit, and even then, plenty of profitable stuff requires significant investment before it turns any sort of profit, they’re so far gone and stuck in this AI pyramid scheme economy mindset that they aren’t just twelve anymore, they’re two. “Now now now! Profit now! No profit later! Only now!”
my healthcare company only insures profitable (healthy young people, but older than age of unwise decisions) and doesn’t provide service to unprofitable people (after 35). this is peak economic efficiency, and i will not take any questions. i don’t have any debt and enjoy high application rates among my public.
To the capitalist the ability to plan farther ahead than the next quarterly report is a terrifying and unknowable eldritch magick. They see someone else do it and they get confused, angry, and scared.
many of their stations are located well outside centers of metro areas and without direct local highway nor light rail connections
See, China just builds shit at random, they couldn’t possibly be planning for future growth.
Evil totalitarian communist emperor Xi throws darts at a map of China and that’s where they have to build a railway line to this week or else a billion people are executed.
I know this hyperbole but i swear it feels like some people actually think this.
The most important part of simulated liberalism is to make it just slightly more extreme than what they actually believe.
The most famous picture of a station in the middle of no where is in fact in the middle of a suburb now (suburb by Chinese standards, not American suburbia)
Also most are next to local highways or connected to metro stations
the excuses and rationalizations don’t have to hold water, they can be obvious falsehoods even. the important thing is for western chauvinists to have ready-made thought-terminating clichés that can be repeated unchallenged in bourgeois media
Ding ding ding!
It really should be sovereign spending tbf. Like, America’s bloated healthcare and military is Federal spending (ofc, no one cares about ‘losses’ for military since you know, it’s the military). When you use non-sovereign entities, you are borrowing from commercial banks (even if state owned), commercial banks give out loans which are supposed to be paid back so the sovereign (central bank + ministry of finance) don’t have to recapitalize it (which raises fiscal deficits which the central gov don’t like due to ‘sound’ finance). Obviously, HSR has a lot of utility however the financing debt should be transferred to the Central Govt, I don’t care about profitability in money terms, many of the good parts of HSR don’t show up on balance sheets. i think they should stop using accounting trickery and have it be an item on Central Govt budget, although the reason they do it this way is to make national debt and fiscal deficit appear lower (for silly reasons).
Maybe I am crazy, but isn’t the advantage of operating at a deficit with public transportation that it enables more economic activity as people can justify taking better jobs at greater distances from their homes, and have the money saved on transit to then stimulate the economy? Like you want the money to be _circulating instead of working in order to pay for the transit that you require so you can get to work to pay for the transit that you…etc
