Home Slider Connecting the World: How High-Speed Rail Is Transforming Asia’s Economic Potential

Connecting the World: How High-Speed Rail Is Transforming Asia’s Economic Potential

by internationalbanker

By Nicholas Larsen, International Banker


It was the inauguration of the Shinkansen “bullet train” in the 1960s that arguably kicked off the high-speed rail revolution, representing a triumphant economic achievement for Japan that helped it return to the international fold following the turbulence it had experienced during the 20 years since its defeat in the Second World War. Managing to generate speeds of up to 320 kilometres per hour (km/hr) today, the Shinkansen has earned a well-deserved reputation for punctuality, safety and convenience, with trains connecting the capital city with the country’s main islands: Honshu, Kyushu and Hokkaido.

But while Japan’s rail system remains a marvel, China is in pole position among the world’s finest high-speed rail networks. Astonishingly built in just 15 years, China’s rail network now spans more than 40,000 kilometres—more than the circumference of the entire globe—and is on track to reach 70,000 kilometres by 2035. With operational trains regularly reaching speeds of 350 km/hr, moreover, China’s high-speed rail system is also the fastest in the world, comfortably outperforming those of Japan and France.

As the custodian of the world’s most cutting-edge rail technologies, China’s lead over the rest of the world only looks set to widen as it continues to push the innovation and quality of its rail service. On July 3, for instance, local news outlets reported that a next-generation high-speed train had set a new record of 453 km/hr in a test run along a section of the railway from Fuqing to Quanzhou in East China’s Fujian Province. Should this technology become commonplace for China’s vast rail network in the coming years, the world could witness for the first time train-journey times that are almost comparable to those of air travel. A rail service of 400 km/hr between Beijing and Shanghai, for example, could end up taking just 2.5 hours—slightly more than a typical flight between China’s two metropolitan giants.

And with the rail network already covering vast swathes of the country—including more remote rural areas—it is doing much to connect China’s diverse communities, boost local economies and provide new jobs. The service is also competitive with road and air transportation for distances of up to about 1,200 kilometres. “Fares are competitive with bus and airfares and are about one-fourth the base fares in other countries,” the World Bank noted in 2019, adding that the standardisation of designs and procedures has significantly lowered costs to about two-thirds of those in other countries. “This has allowed high-speed rail to attract more than 1.7 billion passengers a year from all income groups.”

The good news for Asia, meanwhile, is that China is now bringing its expertise in high-speed rail to the wider region. The signature project in this regard is the 1,000-kilometre-long China-Laos line, which links Kunming, the capital of China’s southwest Yunnan province, with Laos’s capital city of Vientiane. Although construction for this Belt and Road Initiative (BRI) venture was completed in December 2021, the 160 km/hr cross-border service for passengers first commenced on April 13 of this year, with one train per day initially running in each direction and taking 10 hours, 30 minutes, inclusive of customs and immigration stops at the two countries’ borders.

“The launch of cross-border passenger services will meet the aspirations of the people of the two countries for cross-border travel and continue to foster a path of development, happiness and friendship,” Chen Pei, deputy general manager of the China Railway Kunming Group Co. (CR-Kunming), said at the launch of the service. Laos’s president, Thongloun Sisoulith, told Nikkei Asia in late May that the railway “has contributed immensely to our economy and will certainly provide a very better future for us”.

Nikkei Asia also reported that tourist and commodity transport between China and Laos, as well as neighbouring Thailand, increased after the commencement of the service. And although some are wary that the project has significant financial implications, Laos’s president remains defiant in his support. “They don’t understand the feeling of [the] Lao people, of how proud they are of having the first railway in our country,” President Thongloun Sisoulith added. The project “will contribute meaningfully to our efforts in transforming our country from landlocked to land-linked, and this is certainly something that a lot [of] people are very proud of”.

Underlining the ambition of this BRI-financed project is the goal that the rail service will not simply terminate at Vientiane. Rather, plans have already been laid to extend the journey through Thailand to the south of Laos before reaching Malaysia and finishing in Singapore, as China seeks to forge solid transport links with much of Southeast Asia. And with a separate landmark high-speed railway system between Indonesia’s capital city Jakarta and neighbouring city Bandung on the densely populated island of Java due to be launched imminently, much of the region is being rapidly connected.

Perhaps as important as China’s initiatives is Beijing’s willingness to empower its neighbours to develop their high-speed rail networks, thus underscoring the significance of technology transfer in Asian countries’ economic developments. “As cooperation on the China-Thailand High-Speed Railway project deepens, Thailand’s desire to design and construct high-speed railways on its own has gradually become stronger. They hope to play a greater role in future cooperation,” a team led by Gao Rui, senior engineer with state-owned China Railway International Group (CRIG), wrote in the Chinese journal Railway Standard Design in April. “In response to Thailand’s repeated requests for technology transfer and teaching on China’s high-speed rail technology at joint committee meetings, China has agreed to pass on the technology to Thailand under the premise of not violating Chinese laws.”

However, China’s achievements with high-speed international rail lines and other BRI projects mean that detractors are not far away, laying accusations of “debt traps” being engineered on developing countries. And with lower-income nations such as Laos suffering against the backdrop of a deteriorating global economic environment over the last 18 months, particularly through inflated prices for essential imports such as food and fuel, those accusations have only grown louder. “We don’t deny that we have debt, especially with China,” Thongloun Sisoulith acknowledged, also stressing that Laos’s debt obligations are “still manageable” and “not as huge as other countries are experiencing” and that it borrows from other regional partners, including Japan, Vietnam and the Asian Development Bank (ADB). “We have been hearing rumors about this ‘debt trap,’ and I just want to clarify that this is not the actuality that is facing our country. We want to reaffirm that the loan that we sought from any country is to help us build a building block for our economic development.”

And ultimately, it is that “economic development” that much of China’s high-speed rail plans for Asia and beyond are precisely serving. “The impacts go well beyond the railway sector and include changed patterns of urban development, increases in tourism, and promotion of regional economic growth,” Martin Raiser, the World Bank’s country director for China, observed in July 2019. “Large numbers of people are now able to travel more easily and reliably than ever before, and the network has laid the groundwork for future reductions in greenhouse gas emissions.”

But while high-speed rail now dominates much of China’s expansive landscape, as well as that of Japan, South Korea, the bulk of Europe and some of North Africa, one conspicuous player is absent from this growing list of subscribers. Indeed, the United States remains, inarguably, a laggard in rail development, with most Americans still dependent on cars and airlines for travel. According to the national passenger-railroad company Amtrak(National Railroad Passenger Corporation), only 600 kilometres of track is operational for its 100+ miles/hour (160+ km/hr) service. “Many Americans have no concept of high-speed rail and fail to see its value. They are hopelessly stuck with a highway and airline mindset,” William C. Vantuono, editor-in-chief of Railway Age, North America’s oldest railroad-industry publication, explained to CNN in April.

But times could change should the U.S. Congress pass the Build Back Better Act, an infrastructure bill that earmarks $10 billion in funding for developing high-speed rail corridors. Amtrak and Texas Central Partners also recently confirmed that they are seeking federal grants for a proposed 380-kilometre high-speed rail service between the Texan cities of Dallas and Houston, enabling a journey between two of the country’s top five metropolitan areas to take less than 90 minutes. And the privately funded Brightline operation in Florida signed a labour agreement with a railroad-construction union and received government support for federal funding to build a $10-billion high-speed rail link between the cities of Los Angeles and Las Vegas by 2027.

While such news may seem like a drop in the ocean compared to the expansive high-speed rail network China is facilitating across Asia, it is at least a start in the right direction toward upgrading the US’ antiquated public-transport systems.


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