The high-speed rail crash may serve as the moment when the shortcomings of state-driven...

The high-speed rail crash may serve as the moment when the shortcomings of state-driven investment in China were laid bare. The Ministry of Railways took on a debt equivalent to 4.6% of GDP to build the network - money likely never to be recouped. For 2010, fixed investment in China totaled 46% of GDP - it's hard to spend even a fraction of that prudently.

Comments (8)
  • bbro
    , contributor
    Comments (11227) | Send Message
    I love all these ratios to GDP....look at China's savings to GDP....
    26 Jul 2011, 01:00 PM Reply Like
  • Leftfield
    , contributor
    Comments (4064) | Send Message
    Politicians everywhere are in the racket of pandering to the lowest common denominator feasible to spend the most taxpayer OPM possible since that maximizes their influence and the size of the slush funds available to them.


    This always creates disaster, domestic and international, since economic laws cannot be violated forever for unproductive uses. Hence, the only solution is endless vigilance to limit the size of government.


    Vast government, far from offering protection to worthy and deserving citizens and causes, bends to power and money even more than small government will, since it is even more abusive and desperate for funding the larger it grows.
    26 Jul 2011, 01:03 PM Reply Like
  • Gaping hole in the ocean
    , contributor
    Comments (210) | Send Message
    "it's hard to spend even a fraction of that prudently."


    Yes, but doesn't it all make for a spectacular boom.....and then bust.
    26 Jul 2011, 01:18 PM Reply Like
  • La Marque
    , contributor
    Comments (1951) | Send Message
    China has/is building the largest, most compact, rail system in the world. A modern nation needs a modern public transport system. To me 4.6% of GDP may be a lot of money, but it will pay dividends going forward. The rest of the Chinese gov't spending may not be useful as much of our gov't spending has proved.
    26 Jul 2011, 01:19 PM Reply Like
  • Venerability
    , contributor
    Comments (3043) | Send Message
    China CANNOT follow the American model of cars, cars, cars, as its middle class expands by leaps and bounds.


    It is going to keep on following the European model of trains, trains, trains, plus expanding its short hop air system.


    The train at fault, by the way, was based on a system very much like Japan's bullet trains, not on the typical configuration of the Western Big Three - Siemens, Bombardier, and Alstom.


    That's not a knock on Japan's trains, which have had a remarkable record of safety, considering how integral they are to that country's transportation system. China is experiencing some technical glitches with borrowed technology, and there may be some human error involved as well.


    The train not considered at fault was struck by a massive lightning strike, say invesigators. If that is not an excusable "Act of God," I don't know what is.


    Suppose something similar had happened to a European train. Would the Bashers be making adverse comments about the future of rail in Europe?


    Of course, not! The China Bashers are now so influential in our Markets, no matter how silly or how wrong, they glom onto anything they can and turn it into an overblown We Hate China fest.
    26 Jul 2011, 02:31 PM Reply Like
  • Duude
    , contributor
    Comments (3413) | Send Message
    Unfortunately, reports have it their high speed trains run practically empty. A rail crash or derailment might save them money.
    26 Jul 2011, 03:37 PM Reply Like
  • Sam Liu
    , contributor
    Comments (3711) | Send Message
    thanks, a few days ago, I bought a regular class ticket-- I would have bought an upper class ticket if it was crowded.


    2 observations: there are no 5 hour Beijing-Shanghai one way


    contrary to news that the quickest journeys would have only one stop in Nanjing in 5 hours, the best was 2 stops for 5.5 hours
    27 Jul 2011, 01:34 AM Reply Like
  • kmi
    , contributor
    Comments (4600) | Send Message
    Fastest trains biggest bridges, this isn't just about economics or technological prowess, it's also about profile.
    26 Jul 2011, 03:10 PM Reply Like
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