By Gao Shiji & Sun Zhiyan, Department of Development Strategy and Regional Economy of DRC
Research Report No 77, 2011
Today when low-carbon economy drives the change of the mode of economic development in various countries, high-speed railways, either as a green mode of transport or as a strategic emerging industry, have become increasingly important in promoting low-carbon consumption and sustainable economic development. As a result of development over the past few years, China has become a country with the most complete high-speed railway technologies, the strongest integration capacity, the longest operational mileage, the highest running speed, and the largest construction scale. With the further improvement of its high-speed railway technological capacity and the accumulation of the experience in industrialization, it has become an inevitable trend for China's high-speed railway industry to go to the international market. This article analyzes the basic technical and economic features of high-speed railway, the industry's global development trend, and the demand and competition in the international market. It also discusses the strategic guidelines and policy options for the internationalization of China's high-speed railway industry.
I. Main Technical and Economic Features of High-Speed Railway
"High speed" is a relative concept for high-speed railway, and the standard has been constantly adjusted with technological advance. At present, high-speed railways refer to those whose speed has reached over 200 kilometers or more per hour1. Worldwide, the mileage of high-speed railways in operation totals more than 10,000 kilometers, which are mostly distributed in Japan, Britain, France, Italy, Germany, Spain, the United States, South Korea, China and Russia2. High-speed railways have two systems: the traditional wheels-on-rail system and the magnetic levitation (or maglev) system. Except for the 30-km maglev railway in the Chinese city of Shanghai, all commercially-operated high-speed railways use the wheels-on-rail system1.
Compared with highways, aviation and other modes of transport, high-speed railways enjoy tangible superiorities in convenience, speed, safety, comfort, carbon emission and environmental protection. Within the 200 ~ 1,000 km spatial scope, the total travel time of high-speed railways is relatively short and the large carriage room also make travels more comfortable. Take the 510-km Tokyo~Osaka high-speed railway as an example. High-speed railways cut travel expense by 35% and 42% and travel time by 60% and 40% when compared with automobiles and airplanes. High-speed railways enjoy even more prominent advantages in energy conservation and environmental protection. The carbon dioxide emission of the former is only 23% and 28% of the latter. Japan's statistical data in recent years indicate that the energy consumption per person per kilometer by automobiles and airplanes are respectively 5.77 and 5.24 times that of high-speed railways2, as indicated in the figure below.
Comparison between Tokyo-Osaka High-Speed Railway and Other Modes of Transport
But high-speed railways are noted for huge investments, long construction cycles and relatively low rates of returns. As different countries have different geological conditions, construction periods, technological development as well as some other factors, they also vary greatly in the investment scale, construction cost and maintenance cost of high-speed railways. In Europe, the construction cost is about 6~45 million euro per kilometer, or 17.5 million euro on average (at the 2005 constant price). This cost excludes the costs of planning and land use. If these costs are included, the total construction cost is as high as 50 ~ 70 million euro per kilometer . Besides, the operational and maintenance costs of high-speed railways are also very high, with the annual maintenance cost being about 28,000~33,000 euro per track-kilometer (at the 2002 price). The cycle of investment recovery generally ranges between 10 and 20 years. The rate of investment returns varies greatly due to the factors of line, ticket, passenger flow and economic performance. In France, the rate is about 6.5% for the connecting high-speed railways in the Paris region and 2.9% for the TGV high-speed trains in the north. In Spain, the Madrid ~ Seville high-speed railway is still receiving government subsidy for its operation.
Overall, high-speed railways require exceptionally high construction and maintenance costs and accordingly are not projects with high profitability. It is because of this reason that the ticket prices of high-speed railways in general are visibly higher than those of ordinary railways. This is a clear restraint to the payment expectation of consumers and an important factor that affects the economic efficiency of high-speed railway investments. But the long-term trend of high-speed railway operations in some developed countries indicates that market demand has been on the rise. For example, high-speed railways in France claimed a 57.2% share of the country's railway market during the 2000~2006 period, which was nearly 8 percentage points higher than in 2000. During the same period, the share in Germany rose 9%，reaching 27.4%.
II. Basic State and Development Trend of Global High-Speed Railways
1. Basic state of global high-speed railway development
The 1964 formal inauguration of the Tokaido Shinkansen, a Japanese high-speed railway with the highest speed of 210 kilometers per hour, marked the beginning of a high-speed railway era. The first peak development period was 1974~1983, during which a total of 2,639 kilometers were open to traffic. This was four times the total mileage put into service in the previous decade (1964~1973). They were mainly built in Japan and Britain, respectively claiming 43% and 36% of the total. The second peak period was 2004~2009, during which a total of 4,754 kilometers were built around the world. This was more than the total mileage open to traffic in the previous two decades (1984~2003). At present, the global mileage of high-speed railways totals 12,050 kilometers, with Japan ranking first and claiming 2,176 kilometers. China has so far put into service 1,194 kilometers of high-speed railways, accounting for about 10% of the total newly-added mileage of the world.
The development of high-speed railways in various countries indicates that high-speed railways still account for a relatively small percentage of the transport systems in most countries. In the European Union, the 7,100-kilometer high-speed railways account for less than 4% of its whole railway networks. In China, the total mileage of high-speed railways, including the upgraded existing railways with a speed of more than 200 kilometers per hour, is 6,552 kilometers, which accounts for about 7% of the country's total railway mileage. In terms of the running speed, only nine countries and regions around the world have high-speed railways with an average speed of more than 200 kilometers per hour. In particular, China claims the highest average speed of 330 kilometers per hour. It is followed by France and Japan, with the average speed of more than 250 kilometers per hour.
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1The high-speed railway data in this article refer to those of the wheels-on-rail system, unless explained otherwise.
2Source: the US Bureau of Transport Statistics and the Central Japan Railway Company.
1Source: Campos and de Rus (2009).