PRC Economy and Industry: News and Discussions

[shyam]

Huaxi: Secrets of China's richest village



Since people don't have weekends and hence do not have time to see the world, the city created clones of world's wonders so that people can see them. Great CPC idea!

[RamaT]

China’s Megatrends - China's future from government and business leaders

http://nextbigfuture.com/2010/11/chinas ... -from.html

Some of the Naisbitts’ business sources have a view of their country and its politics that strays from the official line, giving us a hint of China’s future direction.

Rather talking about the PRC as a nation-state, these entrepreneurs see China as a corporate enterprise. This formulation caught the Naisbitts’ attention, leading them to conclude that “China has reinvented itself as if it were a huge enterprise.

China's corruption: . One chairman of a large European firm, who has worked in a number of developing markets, makes this comparison: "In Russia, if there's $100 in the bridge-building pot, the official takes $90. In China, they take $30, and at least you know the bridge will eventually get built."

It's part of a government strategy to use the Internet and public opinion to put pressure on provincial officials, as well as to influence policy decisions. Victor Yuan, chairman of Horizon, a Beijing market-research firm, conducted public polls to help the government set Olympic ticket rates and figure out what to charge for natural-gas upgrades in remote areas, in order to avoid public outrage over too high prices. Next year, he'll be launching a poll-based ranking of 10,000 middle- and upper-level Chinese officials, and Yuan believes it's possible such a poll might be extended to include the very top officials, perhaps by 2014. "This is very much a performance-oriented administration, and they need to understand what the people want in order to avoid trouble," says Yuan. "Since Deng, leaders are no longer supermen. They need legitimization, and the approval of the people."

[Theo_Fidel]

IMO it is not wise of Panda to mess with technology they do not fully understand. Even a paint job. Something tragic is likely to happen. At 217 mph even the smallest mistake is your last. Karma is B@tch and you pay for it one way or the other.

http://online.wsj.com/article/SB1000142 ... lenews_wsj

Train Makers Rail Against China's High-Speed Designs

China acknowledges that the trains its own companies are now selling were developed using foreign technology. But officials say domestic companies like China South Locomotive & Rolling Stock Industry (Group) Corp., or CSR, added their own innovations that make the final product Chinese. "China's railway industry produced this new generation of high-speed train sets by learning and systematically compiling and re-innovating foreign high-speed train technology," the Railways Ministry said in a faxed response to questions. Some foreign executives say that such "re-innovating," if it involves selling the trains overseas, is a violation of China's agreements with them.

Smiling proudly on the factory floor before half-assembled sections of the needle-nosed, blue-and-silver CRH380A trains, Liang Jianying, a senior CSR engineer, explains how the company reduced wheel-to-track friction and made the train more aerodynamic. improved paint job. "We improved, optimized, and self-innovated...and came up with a brand new design," she says.improved paint job.

"See, this is nothing like Kawasaki's bullet train," chimes in Wu Qunliang, chief spokesman for the CSR factory. "Real original innovation is rare," adds Wang Xinhong, another senior engineer. "We attained our achievements in high-speed train technology by standing on the shoulders of past pioneers."improved paint job.

But Kawasaki, in a statement, says it and other high-speed train producers disagree with China's claim that it has created its own technology. Most of its trains in operation today, some executives say, are almost exactly the same as its foreign partners' trains. They cite a few tweaks to the exterior paint scheme and interior trims and a beefed-up propulsion systems for faster speeds. "China says she owns exclusive rights to that intellectual property, but Kawasaki and other foreign companies feel otherwise," Kawasaki said in a statement, adding that it hopes to resolve the issue through commercial talks. Kawasaki says it is emphasizing in those negotiations that its technology-transfer contracts with the Railways Ministry state that the technology is for use exclusively within China, and that Chinese companies can't use it in products they intend to export.

Privately, some executives are more blunt. "Claiming most of the recently developed bullet trains as China's own may be good for national pride... but it's nothing but deceitful propaganda," says a senior executive at Kawasaki. "How are you supposed to fight rivals when they have your technology, and their cost base is so much lower," the executive adds.

"Any company bringing new technology, innovation or ideas to China has to deal with shanzhai, what one could readily refer to as 'bandit' culture," says Andrew Forbes Winkler, an analyst with Commodore Research & Consultancy in New York. "From cellphones to automobiles, Chinese companies have taken pride in using others' intellectual property and either innovating or counterfeiting goods."

[shynee]

One of the comment from this YouTube video.

i was born in this village. it is true that if you leave， you will lost everything , and you cant withdrawl money from your own bank account directly without signature of leeders。 the 328m building will be finished in 2011. and one building named huaxi dragon with 538m . another rich village in this city is yangzi river village. the village head buy 10 bmw 745, and one Phantom for celebrating his brithday

Huaxi: Secrets of China's richest village

[Prem]

China, Russia still divided on natural gas price
http://www.boston.com/news/world/europe ... gas_price/
BEIJING—China and Russia are still divided on the price of natural gas that Moscow wants to sell to its energy-hungry Asian neighbor, a senior Chinese energy official said Thursday.
Efforts by China and Russia to establish gas ties have been stalled for years, mainly because of disagreement over prices. Russia is eager to link gas prices for China to oil prices in the way it does in Europe, but China views any European-level prices as too high.Gu Jun, deputy director general of the international cooperation department of China's National Energy Administration, said the difference between the sides is now $100 per 1,000 cubic meters.Gu said China hopes to narrow the gap during Premier Wen Jiabao's visit to Russia next week."The two sides have made a lot of efforts but I have to tell you we are still largely divided on the pricing," Gu told reporters. "We need to demonstrate sincerity on both sides to see whether we can push forward the negotiations

[Theo_Fidel]

Holy Cr@p Huaxi...

Panda one and only competitive advantage at work..

The ability of its people to eat bitter tears.

No wonder Panda companies have to import their slave labor when they go to other countries.
You can earn money as long as you don't withdraw any of it.

[Rishirishi]

Huaxi: Secrets of China's richest village



Since people don't have weekends and hence do not have time to see the world, the city created clones of world's wonders so that people can see them. Great CPC idea!

This is a recipt for disaster. The village leader has build up a few industrial complexes that are now profitable. but what happnes when the income dries out?

It actually reflects the situation in China. 48% of the GDP comes from investments.

[shyam]

This city is more like a company that gives you luxury accommodation, food, car, school for children etc. and expects you to work for 7 days a week for free. Once you quit the company, you lose all these benefits.

Tragedy is that average Chinese are not able to recognize the foolishness in this sort games run by the communist party.

[Singha]

an incredible social experiment though on a country sized scale. has its cons but its pros too. who's to predict that is not the 'model' held up as the successful one in future, just like the rich western democracies are supposed to be what countries should aspire for today.

[shyam]

Most of the ponzi schemes look attractive in the beginning. Imagine how Huaxi will turn out once the profits from steel mills start coming down, or the anticipated economic fall happens. To complicate the scenario assume the case when number of elderly people increase. Most ridiculous thing is that people can not withdraw the money they earned. This looks like a racket. They can show nice balance in their account that can never be used. Madoff did the same thing to his customers. If the city is really profitable, they should let people take the money with them when they leave the city.

[Singha]

a 'soft' prison or 'open prison' methinks. once you get control of a person's life savings he has no option left but to obey.

[shyam]

Communist slavery. Make people work 7 days a week, they hardly get time to think about anything outside of their city.

[Nihat]

Using 'Made in China' stuff? Hope it's not fake

[shynee]

The Chinese Decade - I, Cringely

[paramu]

Indians need to declare solidarity with common Chinese against the oppression by CPC. May be time is not right yet, just have to wait till current glass house starts cracking up.

[RamaY]

The clincher is the village song, played 24x7, throughout the village. What will happen when the audio system fails?

People stop breathing

[DavidD]

it's kinda scary. all these utopian visions of building great things by coming together as a people, enforcing a uniform life style on an entire society (thereby destroying individuality and making everybody "equal"), etc are all out of the playbook of tyranny. there is nothing good about this. it represents the enslavement of a people, their imagination, their spirit, their lifestyle and even their means of livelihood, all to the State. Aldous Huxley and George Orwell predicted the above.

Key difference here: free will. Slaves don't choose to be slaves, but people of that village chose to live there. No, they can't easily just pack up and leave, but they knew that before they decided to live and work there. Personally, I wouldn't have chosen it, but if those people want it then who cares?

[Hari Seldon]

^^IOW, let 'em eat cake. But of course only.

[Theo_Fidel]

Personally, I wouldn't have chosen it, but if those people want it then who cares?

I would say they are no longer people.

What is it that they are fleeing from that would make them submit to such de-humanizing. I thought Panda land was all milk and honey. It's not. I'm shocked, SHOCKED.

[Theo_Fidel]

You can't make this up. Yes suicide nets!

[ashi]

Mandarin's Great Leap Forward
Interest soars in learning China’s official language
http://www.economist.com/node/17522444

Asia remains the core market. The Beijing Language and Culture University Press, the largest publisher of Chinese-language textbooks, says South Korea and Japan are its biggest customers. The number of Indonesians studying in Chinese institutions increased by 42% between 2007 and 2009, according to the Chinese embassy in Jakarta. In September India’s education minister proposed Mandarin classes at state schools.

The question remains whether the Mandarin rush will prove a fad. Japanese and Russian also had “hot” periods, only to recede in popularity. And Chinese can be controversial. With some parents fearful of communist influence, a California school district recently turned down $30,000 per year from the Chinese government to pay for Mandarin classes.

[shyam]

X-post

The Chinese Decade.

Something has been bothering me lately and it is our assumption that China is the world’s next superpower and that we’d darned well better get used to it. Hogwash. We’re into the Chinese decade, not the Chinese Century.

The century belongs to India.
...

So we’re giving it up to the Indians. not to the Chinese. China has the population, the will, the educational system, the foreign currency reserves — everything to make it the next global superpower except two things: 1) an emerging middle class generation comparable to our Baby Boomers, and; 2) a functional diaspora (look it up, I’ll wait).

[shynee]

Zambia Uneasily Balances Chinese Investment and Workers’ Resentment

NKANDABBWE, Zambia — Hundreds of angry coal miners pushed toward the locked gate at Shaft 3, shouting and cursing as they neared the mine’s Chinese managers, who understood neither the English nor the Tonga words of the mob. As the workers butted up against the fence, the bosses grew more fearful and finally two fired their shotguns.

Two Chinese supervisors, Xiao Lishan, center, and Wu Jiuhua, head down, were accused of wounding 13 workers at a mine in Nkandabbwe, Zambia, this month during a labor dispute.
The Zambian miners scrambled in terror. Bodies pivoted, jounced and stumbled. Boston Munakazela did not know he was hit until he suddenly fell over and saw the blood on his chest and arms. Vincent Chenjele was knocked off his bicycle with a hole ripped in his belly. Wisborn Simutombo, bleeding from his arms, legs and stomach, pleaded with friends to pull him to safety across the coal-dusted road.

Zambians complain that these powerful foreigners are permitted to play by their own rules, plundering the country more than developing it and abusing workers as they go. The wounding of 13 miners in a labor dispute at the Collum mine last month once again brought these raw feelings to the surface, revealing conditions at a coal mine where men walk more than 1,000 steps into the earth to slosh through dark and frequently unsafe tunnels. They are paid about $4 a day and say they are expected to work every day of the year.

“We do not have support timbers everywhere they need to be, and we have no masks to protect us from the coal dust,” said Boston Sikalamba, 21, who was buried for several minutes by a cave-in this month. “After the dynamite is set, there’s nothing to do about the dust but breathe it, and if you are slow at your work, the Chinese beat you.”

Most of the Chinese know only a few words of English and Tonga, languages commonly spoken in this part of the country. On occasion, they tell the miners, “Tomorrow, job takwi,” using the Tonga word for “nothing,” meaning there will be no work. Such unexpected days off were at the root of the dispute.

Xu Jianrui, the brother who operates Shaft 3, denied in a phone interview that the miners were overworked or mistreated. “They have four or five days off every month because they need to go to church,” he said, speaking in Chinese. “You know, they are kind of lazy. They work like 10 to 15 days but want a full month’s salary.”

“The Chinese promise to implement a deal, then claim they forgot or there was an oversight,” Mr. Nyumbu said. “The union doesn’t have enough money to keep sending people down to Collum Coal, and when our members there speak up, they get fired.”

The two supervisors were arrested and charged with attempted murder, though they are now free on bail. Critics of the Banda government expect the case to be whitewashed.

“The Chinese finance the ruling party, so the government is their captive,” said Lee Habasonda, the director of a prominent pro-democracy group.

[DavidD]

Zambia Uneasily Balances Chinese Investment and Workers’ Resentment

NKANDABBWE, Zambia — Hundreds of angry coal miners pushed toward the locked gate at Shaft 3, shouting and cursing as they neared the mine’s Chinese managers, who understood neither the English nor the Tonga words of the mob. As the workers butted up against the fence, the bosses grew more fearful and finally two fired their shotguns.

Two Chinese supervisors, Xiao Lishan, center, and Wu Jiuhua, head down, were accused of wounding 13 workers at a mine in Nkandabbwe, Zambia, this month during a labor dispute.
The Zambian miners scrambled in terror. Bodies pivoted, jounced and stumbled. Boston Munakazela did not know he was hit until he suddenly fell over and saw the blood on his chest and arms. Vincent Chenjele was knocked off his bicycle with a hole ripped in his belly. Wisborn Simutombo, bleeding from his arms, legs and stomach, pleaded with friends to pull him to safety across the coal-dusted road.

Zambians complain that these powerful foreigners are permitted to play by their own rules, plundering the country more than developing it and abusing workers as they go. The wounding of 13 miners in a labor dispute at the Collum mine last month once again brought these raw feelings to the surface, revealing conditions at a coal mine where men walk more than 1,000 steps into the earth to slosh through dark and frequently unsafe tunnels. They are paid about $4 a day and say they are expected to work every day of the year.

“We do not have support timbers everywhere they need to be, and we have no masks to protect us from the coal dust,” said Boston Sikalamba, 21, who was buried for several minutes by a cave-in this month. “After the dynamite is set, there’s nothing to do about the dust but breathe it, and if you are slow at your work, the Chinese beat you.”

Most of the Chinese know only a few words of English and Tonga, languages commonly spoken in this part of the country. On occasion, they tell the miners, “Tomorrow, job takwi,” using the Tonga word for “nothing,” meaning there will be no work. Such unexpected days off were at the root of the dispute.

Xu Jianrui, the brother who operates Shaft 3, denied in a phone interview that the miners were overworked or mistreated. “They have four or five days off every month because they need to go to church,” he said, speaking in Chinese. “You know, they are kind of lazy. They work like 10 to 15 days but want a full month’s salary.”

“The Chinese promise to implement a deal, then claim they forgot or there was an oversight,” Mr. Nyumbu said. “The union doesn’t have enough money to keep sending people down to Collum Coal, and when our members there speak up, they get fired.”

The two supervisors were arrested and charged with attempted murder, though they are now free on bail. Critics of the Banda government expect the case to be whitewashed.

“The Chinese finance the ruling party, so the government is their captive,” said Lee Habasonda, the director of a prominent pro-democracy group.

Hah, welcome to working for Chinese managers. Other than the shotgun and the language barrier, working conditions in mines in China were about the same just a few years ago. If they don't like it then they can just stop working for them, but they're not gonna get better conditions until their country gets richer. Heck, even in China there were hundreds of miners dead each year due to poor working conditions/accidents until up to a few years ago.

[RamaT]

http://www.npr.org/templates/story/stor ... =131440157

Pollution in Beijing was so bad Friday the U.S. Embassy, which has been independently monitoring air quality, ran
out of conventional adjectives to describe it, at one point saying it was "crazy bad."

China's official air quality rating was 312 on Friday. Environmental groups and city residents have complained the government's measurement system consistently underreports the severity of the problem.

Experts say Beijing's frequently bad air has been even dirtier recently because a growing number of factories and villages on the outskirts of the city are burning coal for the winter, and more than 1,200 new cars hit the roads each day.

[niran]

If they don't like it then they can just stop working for them,

typing from an air conditioned office is different from facing starvation if unemployed.
Those mine workers have 2 options
-work in the mines and die from slaveryisque environment.
-do not work and die hungry.
the first option looks better, so please do not insult people with nothing to fight back.

[DavidD]

If they don't like it then they can just stop working for them,

typing from an air conditioned office is different from facing starvation if unemployed.
Those mine workers have 2 options
-work in the mines and die from slaveryisque environment.
-do not work and die hungry.
the first option looks better, so please do not insult people with nothing to fight back.

Exactly, the Chinese are providing them a better alternative, which, despite all the howling from other nations, none has been able to provide them for oh about a few centuries or so. Harsh working conditions is something almost all industrialized nations have gone through, China and the U.S. included. Resistance toward it is also natural, and I don't blame Zambians, but it's hypocritical for western nations(and Indians) to criticize the practice when none of them is willing to provide a better alternative. I mean, if you're so concerned for their conditions, why don't you, you know, help? Then again, I suppose it IS much easier to type from an air conditioned office instead, right?

[vina]

Exactly, the Chinese are providing them a better alternative, which, despite all the howling from other nations, none has been able to provide them for oh about a few centuries or so

Err.. Why does the word exploitation come to my mind when I hear this?.

After all, isnt the hammer and sickle and the clarion call "Workers of the world unite, you have nothing to lose but your chains" the driving force behind communism, which does away with "oppression" and "exploitation" and thus the "inevitable" dictatorship of the proletariat where "to each according to his wants and from each according to ability" will usher in the utopia in the world and create an ideal class less society.

Well, that is what the Chinese Poodles in India - Morons (CPI -M) dish out every day. Looks like in the animal farm, some animals with yellow skin and answering to names like Wong and Dong want to be more equal than the others and want to "exproritt" other animals , all for their own good only. Maybe these soup-e-rear animals need to be kept in their cages for their own good!.

[DavidD]

Exactly, the Chinese are providing them a better alternative, which, despite all the howling from other nations, none has been able to provide them for oh about a few centuries or so

Err.. Why does the word exploitation come to my mind when I hear this?.

After all, isnt the hammer and sickle and the clarion call "Workers of the world unite, you have nothing to lose but your chains" the driving force behind communism, which does away with "oppression" and "exploitation" and thus the "inevitable" dictatorship of the proletariat where "to each according to his wants and from each according to ability" will usher in the utopia in the world and create an ideal class less society.

Well, that is what the Chinese Poodles in India - Morons (CPI -M) dish out every day. Looks like in the animal farm, some animals with yellow skin and answering to names like Wong and Dong want to be more equal than the others and want to "exproritt" other animals , all for their own good only. Maybe these soup-e-rear animals need to be kept in their cages for their own good!.

Honestly, I was surprised to hear that there's still an actual communist party in India. I was even more surprised to hear that there are more than one! Communism is nothing but an Utopian dream, nobody in China actually believes it.

Heck yea it's exploitation, or we can euphemize it and call it capitalism. The key thing here is that China is doing nothing to keep the Africans down. They're paying them according to capitalistic principles of supply and demand, and not forcing them to work for less than they deserve at gunpoint like the colonial powers back in the day. If the Africans play it right, they'll eventually build up wealth, develop higher profit industries, and obtain better working conditions like the Chinese did. They have the resources to do it, and now they've got the investors, exploitative as they may be, to get started. The only thing that may stop them is themselves.

[jamwal]

The thing is, you exploitative Chinese will never allow them to develop or get rich. Your interests are best served by poorer "trading partners" or colonies if you cut out the BS quotient. You guys always whine about exploitation by Europeans and Japanese and how it kept China poor for centuries. And now, you are shameless enough to justify all of your greed and lack of common decency. Pathetic.

[vina]

and obtain better working conditions like the Chinese did

Err . I dont think that the "Chinese" have better working conditiosn. The "suicide nets" in Guangzhou and the unending mine disasters we keep seeing in TV about are a sure shot thing that the conditions in China are pretty much similar.

The Chinese and the foreign owners in the SEZs do the to migrant laborers in China what the Chinese do the Africans!

[Theo_Fidel]

For those impressed with the Railways in China, here's how they did it. No miracle here, just one time bankruptcy level debt from bonds.
If there is a downturn and all those rosy passenger projections evaporate.. ..financial Armageddon..

Total debts of $150 Billion at present. Total debts of ~ $500 Billion by 2020. This is already spent with only 1/4 of HSR in place. Imagine the interest rate moves up as default becomes more likely.

Interest alone is now $6 Billion every year and set to rise shortly to $15 Billion a year once just the chunks under construction are done. China has about 2 Billion passengers a year. So if about 1/4 of the traffic is moved to HSR every single ticket sold will need to set aside $30 per trip for interest alone.

Vina, being in finance I'm sure you have a pithy shloka or two..

http://www.chinadaily.com.cn/bizchina/2 ... 055235.htm

China's railway sector paid more than 40 billion yuan ($5.9 billion) in interest last year, and the amount may exceed 100 billion yuan as debt financing accounts for a bigger share of the way the railway sector is financed, according to a report released by China Minsheng Banking Corp (CMBC) on Monday.

The huge amount of interest generated every year will levy a heavy burden on the railway sector and threaten its profits, and reforms in the financing system has become a priority, the China Business News reported Tuesday.

According to the report, in 2009, more than 70 percent of the funds used for railway construction were from debt financing, a much higher proportion than the 48.83 percent in 2005.

The swelling in debt financing has driven the Ministry of Railways' (MOR) debt ratio to increase every year.

In 2009, total debts of the ministry were estimated to exceed 1 trillion yuan, with a debt-to-asset ratio of more than 55 percent, but the ratio may exceed 70 percent by 2012, the report said.

Reforms in MOR's financing and investment system has become a priority for China's transportation industry, said Han Feng, president of the transportation finance department of the CMBC and an author of the report.

The reforms will be targeted at expanding railroad construction by joint-ventures and including diversified investors in the construction, such as insurance companies, trust companies and private capitals, Han said.

The ministry is also planning to regulate the management of listed railway companies such as Daqin Railway Co, Guangshen Railway Co, and China Railway Tielong Container Logistics Co, Han told the newspaper.

An unnamed analyst also said it is imperative to float the railway assets or adopt other equity financing measures, the Securities Daily reported.

If the railway sector keeps the current structure in assets and pace of development, by the year 2020, total debts will approach 3 trillion yuan with a debt-to-asset ratio of over 70 percent. As the old methods of financing run short, raising money from listings will be a natural option, the source added.

The CMBC report also said MOR's investment in railway equipment normally accounts for 20 percent of the total.

In 2009, China spent 98 billion yuan to purchase railway equipment, and the amount is predicted to exceed 130 billion yuan this year.

[DavidD]

The thing is, you exploitative Chinese will never allow them to develop or get rich. Your interests are best served by poorer "trading partners" or colonies if you cut out the BS quotient. You guys always whine about exploitation by Europeans and Japanese and how it kept China poor for centuries. And now, you are shameless enough to justify all of your greed and lack of common decency. Pathetic.

In other words, you have no faith in capitalism? The Europeans and Japanese kept China poor with drugs and devastating wars, not by their "exploitive" capitalistic enterprises. Let me ask you, where's your common decency? I mean, you seem pretty content to just let the Africans starve to death, aren't you?

Err . I dont think that the "Chinese" have better working conditiosn. The "suicide nets" in Guangzhou and the unending mine disasters we keep seeing in TV about are a sure shot thing that the conditions in China are pretty much similar.

The Chinese and the foreign owners in the SEZs do the to migrant laborers in China what the Chinese do the Africans!

It's better on average, though it's very true that there are places where working conditions are just as bad. Keep in mind that Zambia's GDP per capita is 1/3 of China's, so it's not THAT much of a difference, and it's only natural that on the low end of the spectrum of a 1.3 billion people economy, some will have similar conditions to them.

For those impressed with the Railways in China, here's how they did it. No miracle here, just one time bankruptcy level debt from bonds.
If there is a downturn and all those rosy passenger projections evaporate.. ..financial Armageddon..

Total debts of $150 Billion at present. Total debts of ~ $500 Billion by 2020. This is already spent with only 1/4 of HSR in place. Imagine the interest rate moves up as default becomes more likely.

Interest alone is now $6 Billion every year and set to rise shortly to $15 Billion a year once just the chunks under construction are done. China has about 2 Billion passengers a year. So if about 1/4 of the traffic is moved to HSR every single ticket sold will need to set aside $30 per trip for interest alone.

Vina, being in finance I'm sure you have a pithy shloka or two..

http://www.chinadaily.com.cn/bizchina/2 ... 055235.htm

Right, because ticket sales is the only use for infrastructure....

[heech]

Interest alone is now $6 Billion every year and set to rise shortly to $15 Billion a year once just the chunks under construction are done. China has about 2 Billion passengers a year. So if about 1/4 of the traffic is moved to HSR every single ticket sold will need to set aside $30 per trip for interest alone.

I think the number you're quoting is probably the right order of magnitude. I'd probably argue the number of trips taken will be much greater than 1/4... the idea here is to make high-speed rail a daily commute option for literally hundreds of millions of Chinese. Passenger behavior will be totally different when there's literally a train arriving every 5 minutes, ready to take you to a major city 150 km away in 30 minutes.

In any case, let's say it's $15-$20/trip going towards interest expense. The question is: so what?

I'm not so sure that's unsustainable. The greatest expense here is the up-front construction cost. Operating expenses will not be significant for these systems. I'd expect the great majority of system revenue to go towards paying off construction cost. (And then there are the other externalities: environmental savings, less expensive freight transport, greater worker productivity, etc, etc.)

[Theo_Fidel]

http://www.salon.com/news/china/?story= ... ing_bubble

Inside China's housing bubble

Nanning is in the middle of a building frenzy that beggars description. New and half-finished apartment buildings rise everywhere -- the horizon is dotted with construction cranes in every direction. Traffic on the streets appears primarily divided between swarms of motorbikes and trucks carrying construction materials to and fro. The urban center of Nanning boasts a population of around 2.5 million, but seems to be preparing for an influx twice that.

But then it sinks in. Visually, the construction of new housing appears to be the main game in town. What happens when it stops?

But as one employee of the factory told me, the primary force pushing Guangxi's economy forward is housing. In fact, the land upon which the factory was situated had become so valuable that the company was planning to sell it and move to another location -- that was the primary business development plan!:-?

Whether or not Nanning has already overbuilt is a debatable question, but it seems impossible to imagine that the city could sustain a building boom at this rate indefinitely. For China to keep growing, it will need more manufacturing, more trade and more domestic consumption. Managing that transition smoothly as the housing steroid boost subsides will be an amazing challenge. Building a skyscraper, one senses, is a lot easier than modernizing a tractor factory.

http://voices.washingtonpost.com/ezra-k ... e_div.html

Why China has so many fake divorces

..in fact, officially divorced, she still lived happily with her husband and daughter as a family. Seeing the quizzical look on my face, she reassured me that the only reason they had gotten a divorce — a mere legal technicality — was so they could circumvent the one-home-per-family restriction and qualify to buy a second home in Beijing.

Perhaps not surprisingly, "actual, legal divorces in China are up nearly 10% this year.

http://www.npr.org/blogs/money/2010/11/ ... -s-big-bet

China's Big Bet: The Guanxi Strategy

It's an audacious bet because there's little evidence at the moment that Guangxi has the wherewithal to sustain a growing middle class. There's some industry here – metal fabrication, auto parts, machinery — and a few cash crops like tobacco and sugar. But Guangxi accounts for a tiny proportion of China’s overall production.

The Guangxi strategy revolves around China's continued growth and broader development of Southeast Asia. If it pays off, China's government will be credited with astute long view thinking. If it fails, it will look like the government gambled big and lost with its winnings from the global economy.

That puts it in a nutshell. No miracle here. Just a bet.

[vina]

In any case, let's say it's $15-$20/trip going towards interest expense. The question is: so what?

It shows the magnitude of misallocated capital and tremendous waste. There is no remedy for that "original sin". Let me give you an example.

I could fly between San Jose and LA for around $50/60 and at times for as low as $30.. a distance of around 400 miles /700 +- odd kms in around 45mins. And that $50 included all costs paid and enough left over for SW Airlines to earn a very very respectable return!.

So, are you going to travel 700 kms in your train for $50 in 1 hr, if $30 goes towards interest alone.. What about running costs, fuel, maintenance and facilities and security and other plethora of costs, why you wont even break even until you price it at $90/$100 and a further $20 to $30 above that to earn a decent economic return and you are not even talking taxes here.

Why in India I can fly Bangalore- Mumbai (around 800kms) for around $100, out of which close to $50 is taxes alone!

[Singha]

the upkeep cost of modern expways and high speed rail cannot be cheap...margin for cutting corners in safety is quite less in high speed rail.

[DavidD]

In any case, let's say it's $15-$20/trip going towards interest expense. The question is: so what?

It shows the magnitude of misallocated capital and tremendous waste. There is no remedy for that "original sin". Let me give you an example.

I could fly between San Jose and LA for around $50/60 and at times for as low as $30.. a distance of around 400 miles /700 +- odd kms in around 45mins. And that $50 included all costs paid and enough left over for SW Airlines to earn a very very respectable return!.

So, are you going to travel 700 kms in your train for $50 in 1 hr, if $30 goes towards interest alone.. What about running costs, fuel, maintenance and facilities and security and other plethora of costs, why you wont even break even until you price it at $90/$100 and a further $20 to $30 above that to earn a decent economic return and you are not even talking taxes here.

Why in India I can fly Bangalore- Mumbai (around 800kms) for around $100, out of which close to $50 is taxes alone!

You're missing many things in your analysis. First, the volume is expected to be much greater. As somebody mentioned before, the point of the high speed rail system is to make it a DAILY commute for literally tens of millions of people who live 50-100+kms away from major metropolitan areas like Shanghai. Economy of scale indicates that there need not to be $30 dollars per ticket set aside for each passenger just to pay for interest.

Let's do some math:

Let's say 20 million Chinese make the daily trip, pretty conservative estimate. They'd be making 250(50 work weeks x 5 work days per week) trips a year, which makes for 5 billion trips per year. Divide 6 billion by that and you get $1.2 per trip, or about 20*1.2 = $24 per month. Suppose the monthly ticket costs $200 per month, which is reasonable considering places like Beijing/Shanghai's average income is at least about $500-700 per month higher than the national average. That way, you're left with $176 per month(or $42 billion per year) to pay for maintenance, fuel, security, etc. The NY subway system costs about $1.9 billion(1) per mile to construct, and they expect to recuperate the costs with ~$100 monthly passes, while the Chinese high speed rail system costs about $20 million(2) per kilometer(about 1.6% the cost).

Notice that I'm ONLY counting people who make daily trips. It's likely that a huge percentage of people wouldn't have monthly passes(in NY, about 1/3 of the people use monthly passes(3)), so that further drives the cost down. Add that to the rising living standards of the people and the increased productivity expected from the rail system, it may not be a cash cow without financing reforms as mentioned in Theo's article, but it's hard to imagine that it'll be a "tremendous waste".

(1)http://www.city-journal.org/2010/20_2_s ... ssons.html
(2)http://en.wikipedia.org/wiki/High-speed_rail_in_India
(3)http://www.huffingtonpost.com/2010/07/2 ... 62619.html

[vina]

As somebody mentioned before, the point of the high speed rail system is to make it a DAILY commute for literally tens of millions of people who live 50-100+kms away from major metropolitan areas like Shanghai

You are confused between a city/suburban metro and a intercity /long distance high speed rail of the kind China is rolling out. Look at Europe and Japan , the two places that is the natural home of high speed trains. Where the sweet spot is between high density city pairs within 3 hours of each other and they compete with short haul airlines!

No way in hell is the high speed train going to have a dense urban kind of metro's capacity (surely you are not suggesting that the high speed trains are not going to have plush seats, but people hanging from straps , called strap hangers in NYC, with that kind of density) for those sort of economics to work.

And oh, btw, I am willing to bet that the Shanghai metro aint making any money either. If that cant make money, it is foolish to dream that a lower density high speed service will make any money! And yes, NYC's infrastructre is all paid back long ago (it is over 100 years old in many cases) and a monthly pass used to cost $30 (now around $45) and when I used to live there a daily "excursion" unlimited pass was $4, now $8 or so. And oh, nearly everyone in NYC uses the metro, I doubt that is true with China and surely it cant be the case with high speed intercity trains.

Lets face it. The Chinese high speed roll out is a massive white elephant. The Japanese rolled it out when they were on the cusp of their growth, which died out in 1989 or so and could pay for it later. The Chinese are rolling theirs out when Chinese growth is plateauing and will be a millstone around it's neck when the growth tapers off.

[DavidD]

As somebody mentioned before, the point of the high speed rail system is to make it a DAILY commute for literally tens of millions of people who live 50-100+kms away from major metropolitan areas like Shanghai

You are confused between a city/suburban metro and a intercity /long distance high speed rail of the kind China is rolling out. Look at Europe and Japan , the two places that is the natural home of high speed trains. Where the sweet spot is between high density city pairs within 3 hours of each other and they compete with short haul airlines!

No way in hell is the high speed train going to have a dense urban kind of metro's capacity (surely you are not suggesting that the high speed trains are not going to have plush seats, but people hanging from straps , called strap hangers in NYC, with that kind of density) for those sort of economics to work.

And oh, btw, I am willing to bet that the Shanghai metro aint making any money either. If that cant make money, it is foolish to dream that a lower density high speed service will make any money! And yes, NYC's infrastructre is all paid back long ago (it is over 100 years old in many cases) and a monthly pass used to cost $30 (now around $45) and when I used to live there a daily "excursion" unlimited pass was $4, now $8 or so. And oh, nearly everyone in NYC uses the metro, I doubt that is true with China and surely it cant be the case with high speed intercity trains.

Lets face it. The Chinese high speed roll out is a massive white elephant. The Japanese rolled it out when they were on the cusp of their growth, which died out in 1989 or so and could pay for it later. The Chinese are rolling theirs out when Chinese growth is plateauing and will be a millstone around it's neck when the growth tapers off.

I didn't say the density will equal to NY metro's, I simply implied that at 1.6% of the cost, it shouldn't be that hard to make the money back on the investment. Also, the NY 30 day MTA pass is $89(1). And who cares if everybody in NYC uses the metro? Are you saying that the entire country of China can't have at least 20 million daily riders? In case you didn't notice, "high density city pairs" are all over the place in China.

Also, China will soon deploy vacuum trains which may travel at twice the speed with only 10-15% of increased cost(2). So why don't you show me some numbers of how this system will NOT work? Repeating that it's a "white elephant" in different words doesn't cut it.

(1)http://www.mta.info/metrocard/mcgtreng.htm#unlimited
(2)http://www.smartplanet.com/business/blo ... rain/9594/