China Radio: High-Speed Rail

Friday I was on China Radio International (CRI)’s “Beyond Beijing” show, taking part in a discussion on the pros and cons of China’s massive new high-speed rail network.  My fellow guests were John Scales, transport sector coordinator here in Beijing for the World Bank (which has made substantial investments China’s railroad expansion) and Gu Wei, a columnist with Reuters Breaking Views.  For those who are interested in the topic, particularly those who have followed my earlier observations on the subject, I think you will find it a very substantive conversation.  You can listen to it here or download it here.

One of the topics we mention is the internal corruption investigation that recently led to the removal of Lu Zhijun as China’s Minister of Railways.  Since Lu was the main kingpin behind China’s high-speed rail push, the move raises all kinds of unanswered questions about the project’s viability, the political support behind it, and what happens now.  If you’re curious to learn more about the few details that are known, I highly suggest reading this article (in English) by Caixin, which was published Thursday.   

While I’ve been critical of many aspects of China’s high-speed rail program, I’ve resisted the temptation to use the latest scandal as an excuse to  “pile on” because I think the corruption issue should really be kept separate from the intrinsic pros and cons of high-speed rail itself.  To be fair, massive corruption took place during America’s big railroad-building boom in the 19th Century — most notably, the Crédit Mobilier scandal involving the country’s first transcontinental railroad, which bears some striking similarities to what Caixin describes at MOR.  Yet for the most part we believe that, despite the corruption, these turned out to be worthwhile investments in the end.  The scandal in China is important, because of its potential impact on the political climate concerning high-speed rail, as well the broader light it shines on China’s business and investment environment.  But China’s high-speed rail plans should still be judged on the merits, not on sensational headlines.