An update on the transport infrastructure development in China: Railway transportation (2010)
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1 LI & FUNG RESEARCH CENTRE China Distribution & Trading IN THIS ISSUE : I. Overview 2 II. Highlights in 6 railway transport development in China An update on the transport infrastructure development in China: Railway transportation (2010) Overview At the end of 2009, the total length of railways in operation in China reached 86,000 km, up 7.9% yoy from 79,700 km in China has surpassed Japan to rank second in the world, only behind the US. In 2009, fixed assets investment in railway surged to a record high of billion yuan, posting a yoy growth of 69.1%. The huge increase was largely due to the 4-trillion-yuan stimulus package launched by the Chinese government in response to the financial crisis, under which 1.5 trillion was allocated to transport infrastructure. Both railway passenger and railway freight traffic witnessed only moderate growth in 2009 against the backdrop of global economic slowdown. Highlights 11/F, LiFung Tower, 868 Cheung Sha Wan Road, Hong Kong Tel : (852) Fax : (852) lfdc@lf1937.com 1
2 I. Overview 1. Length in operation At the end of 2009, the total length of railways in operation in China reached 86,000 km, up 7.9% yoy from 79,700 km in China has surpassed Japan to rank second in the world, only behind the US, in terms of length of railways in operation. The Ministry of Railways (MOR) sets the goal of having 120,000 km of railways in operation by Please see exhibit 1 for more details. Exhibit 1 Total length of railways in operation in China (E) 2012(E) 2020(E) Total length in operation ('000 km) Source: Ministry of Railways, PRC China has also witnessed modernization of its railway system: In 2008, 41.6% of the railways were double tracking; and 39.1% were electrified. The MOR aims at pushing up both figures to above 50% in Fixed assets investment In 2009, the fixed assets investment in railway surged to a record high of billion yuan, posting a yoy growth of 69.1%. The huge increase was largely due to the 4-trillion-yuan stimulus package launched by the Chinese government in response to the financial crisis, under which 1.5 trillion was allocated to transport infrastructure. According to the Minister of Railways, the fixed assets investment in railway is expected to increase further to billion yuan in Exhibit 2 gives you a more detailed picture. 2
3 Exhibit 2 Fixed assets investment, Source: Ministry of Railways, PRC 3. Passenger traffic According to the MOR, in 2009, the total number of railway passenger in China was 1,524.5 million persons, posting a yoy increase of 4.4%. The total railway passenger-kilometers amounted to billion passenger-km in 2009, up 1.3% over the previous year. Exhibits 3 and 4 show the total number of railway passengers and the total railway passenger-kilometers for the past five years. Both figures witnessed only moderate growth in 2009 against the backdrop of the global economic slowdown. The MOR forecasts that the number of passengers dispatched by railway will reach 1,640.0 million this year. Exhibit 3 Total railway passenger traffic, Source: Ministry of Railways, PRC 3
4 Exhibit 4 Total railway passenger-kilometers, Source: Ministry of Railways, PRC According to the National Bureau of Statistics (NBS), among the major trunk railways in China, the Beijing-Shanghai and Beijing-Guangzhou lines carried the most passengers in Exhibit 5 shows the top five railway lines for passenger traffic in China in Exhibit 5 The top railway lines for passenger traffic in China, 2008 Railway lines Passenger traffic (million persons) Beijing-Shanghai Beijing-Guangzhou Shanghai-Kunming 82.0 Lianyungang-Lanzhou 81.5 Beijing-Harbin 63.7 Source: National Bureau of Statistics, PRC 4. Freight traffic The volume of freight dispatched by railway in China was 3.3 billion tonne in 2009, representing a yoy increase of 1.9%. The total railway freight tonne-kilometers rose 0.5% yoy to 2,523.9 billion tonne-kilometers in the same year. Exhibits 6 and 7 show the total railway freight volume and the total railway freight tonne-kilometers for the preceding five years. Both railway freight volume and freight tonne-kilometers have demonstrated mild growth. The MOR forecasts that the total railway freight volume will climb to 3.5 billion tonne in
5 Exhibit 6 Total railway freight traffic, Source: Ministry of Railways, PRC Exhibit 7 Total railway freight tonne-kilometers, Source: Ministry of Railways, PRC According to the NBS, among the major trunk railways in China, the Taiyuan-Datong line carried the most freight in This line, running across the Shanxi province, is a very important route for coal transportation in China. Exhibit 8 shows the five busiest railway lines for freight traffic in China in Taking a closer look at the types of products carried by railway in China, coal and metal ores accounted for almost 60% of the total freight. Exhibit 9 lists the top five types of products carried by railway in China in
6 Exhibit 8 The five busiest railway lines for freight traffic in China, 2008 Railway lines Freight traffic (million tonnes) Taiyuan-Datong Shanghai-Kunming 84.7 Lianyungang-Lanzhou 77.9 Baotou-Lanzhou 76.9 Beijing-Guangzhou 65.6 Source: National Bureau of Statistics, PRC Exhibit 9 The top five types of products dispatched by railway in China, 2008 Products Freight Traffic (million tonnes) Coal Metal ores Iron & steel and non-ferrous metal Petroleum Grain Source: National Bureau of Statistics, PRC II. Highlights in railway transport development in China 1. The high-speed railway network 6
7 Exhibit 10 High-speed railway network to be built by 2012 Four routes linking north and south ( 四縱 客運專線 ) Beijing-Shanghai passenger line The line connects two major economic zones in China, the Bohai Rim and the Yangtze River Delta. It goes through three municipalities and four provinces: Beijing, Tianjin and Shanghai; Hebei, Shandong, Anhui and Jiangsu. Beijing-Hong Kong passenger line Beijing-Harbin passenger line Hangzhou-Fuzhou-Shenzhen passenger line The line goes vertically from Beijing, through five provinces (Hebei, Henan, Hubei, Hunan and Guangdong) and ends in Hong Kong West Kowloon. The line connects northern and northeastern China. It runs from Beijing, through Hebei, Liaoning and Jilin provinces and ends in Harbin of Heilongjiang province. The line links together the Yangtze River Delta, the Pearl River Delta and the southeast coastal areas of China. Major stops include Hangzhou, Ningbo, Wenzhou, Fuzhou, Xiamen and Shenzhen. Four routes linking east and west ( 四橫 客運專線 ) Xuzhou-Lanzhou passenger line This line starts from Xuzhou of Jiangsu province and ends in Lanzhou of Gansu province, passing through a number of provinces such as Anhui, Henan, and Shaanxi. Shanghai-Kunming passenger line Qingdao-Taiyuan passenger line It runs horizontally from Shanghai to Kunming, via Zhejiang, Jiangxi, Hunan and Guizhou. The line connects eastern, central and western China. The line starts from Qingdao, linking up Jinan, Dezhou, Hengshui, Shijiazhuang and other cities. The line connects northwestern, northern and eastern China. Shanghai-Wuhan-Chengdu passenger line Source: Ministry of Railways, PRC; The line links up eastern, central and southwestern China. Major stops include Nanjing, Hefei, Wuhan, Chongqing and Chengdu. 7
8 Map 1 High-speed railway network in China by 2012 Source: Compiled by 8
9 The benefits of HSRs are multi-faceted: Efficient, larger capacity, convenient and environmental friendly. With higher speed than existing railways, it means reduction of journey times and passengers are able to reach further for the same journey time. The advanced technology also allows the trains to operate more frequently and carry more passengers. Very often, the HSR stations are located in the city centres, where the excellent connections to other modes of transport offer convenience to passengers. Moreover, HSR enables larger flow of people at lower environmental price, since it emits fewer greenhouse gases and consumes less energy than airplanes and cars. Studies show that carbon emission per person per journey of HSR is only onethird that of aviation and 50% of car. As the new HSRs carry more passengers at a faster speed, the capacity of the existing rail network can be released for cargo. Trade bottlenecks will be alleviated. Cars and lorries could be taken off the road and traffic congestion will be eased. Meanwhile, a more balanced infrastructure development would reduce the infrastructure gap between the developed and less developed regions. The HSR network will help facilitate flows within the country and spread economic development more evenly across the country. Gaps in wealth may be narrowed. Infrastructure development will also promote consumer spending. Manufacturers situated in coastal areas are under strong pressure to move to lower-cost locations such as central and western China. Since transport infrastructure is one of the critical factors when considering relocation, the improved accessibility of central and western China brought about by the HSRs will encourage more industrial relocation from coastal areas. This would probably bring better opportunities to retail and sourcing businesses as well. 2. Pilot Maglev trains in Beijing and Shenzhen The only high-speed Maglev operating in China is the 31-kilometer link between Shanghai Pudong International Airport and Shanghai Lujiazui. With a maximum speed of 431 km/h, it takes less than 8 minutes for a single ride. The MOR has approved to extend the line to Hangzhou and it will be the longest Maglev line in the world after completion. Meanwhile, the MOR wishes to develop low- or mid-speed Maglev (of about 100 km/h) for urban transportation. It sees low- or mid-speed Maglev as a lower-cost and less-polluting alternative to other types of railways. It plans to build two pilot lines in Beijing and Shenzhen. Such Maglev systems will be adopted in other cities if the performance of the pilot lines is proved to be satisfactory. 9
10 3. Innovation and going global After years of development, China has developed its own leading technologies in HSR. The launch of the Wuhan-Guangzhou HSR in December 2009 catches many countries eyes. Many of them have approached China for cooperation on building HSRs. China is now participating in the construction of HSR systems in Turkey and Venezuela. Other countries approaching China include the US, Russia, Brazil, Saudi Arabia, India, Poland, Cambodia, Laos, Thailand, Burma, etc. The going global of advanced HSR technologies marked a milestone in China s innovation and technological development. 10
11 11
12 Copyright All rights reserved. Though endeavours to have information presented in this document as accurate and updated as possible, it accepts no responsibility for any error, omission or misrepresentation. and/or its associates accept no responsibility for any direct, indirect or consequential loss that may arise from the use of information contained in this document. 12
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