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China's High-Speed Trains Coming Off the Rails

samzenpus posted more than 2 years ago | from the best-laid-plans dept.

Government 347

Hugh Pickens writes "The Washington Post reports that China's expanding network of ultramodern high-speed trains is coming under growing scrutiny over costs and because of concerns that builders ignored safety standards in the quest to build faster trains in record time as new leadership at the Railways Ministry announced that to enhance safety, the top speed of all trains was being decreased from about 218 mph to 186. Without elaborating, the ministry called the safety situation 'severe' and said it was launching safety checks along the entire network of tracks. Meanwhile China's Finance Ministry announced that the Railways Ministry continues to lose money as the ministry's debt stands at $276 billion, almost all borrowed from Chinese banks. 'In China, we will have a debt crisis — a high-speed rail debt crisis,' says Zhao Jian, a professor at Beijing Jiaotong University and longtime critic of high-speed rail who worries that the cost of the project might have created a hidden debt bomb that threatens China's banking system. 'I think it is more serious than your subprime mortgage crisis. You can always leave a house or use it. The rail system is there. It's a burden. You must operate the rail system, and when you operate it, the cost is very high.'"

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347 comments

Safety Standards? (3, Interesting)

msobkow (48369) | more than 2 years ago | (#35959956)

Oh really? You mean there are existing safety standards for new technology?

And here I thought it was just the engineer's conservative estimates...

Re:Safety Standards? (3, Funny)

Samantha Wright (1324923) | more than 2 years ago | (#35959984)

Well, I don't think that "trains not flying off the rails" counts as very surprising, or particularly exclusive to new technology. So you might still be in the clear there.

Re:Safety Standards? (4, Funny)

jd (1658) | more than 2 years ago | (#35960346)

Well, that would depend. A maglev train that didn't fly off the rails would be kinda useless.

Re:Safety Standards? (4, Interesting)

Laser Dan (707106) | more than 2 years ago | (#35959994)

Oh really? You mean there are existing safety standards for new technology?

And here I thought it was just the engineer's conservative estimates...

Well since the train designs are stolen^H^H^H similar to the Japanese and German high speed trains, there must be relevent safety standards.

Re:Safety Standards? (0)

Moryath (553296) | more than 2 years ago | (#35960116)

The joke is that there are no competent Chinese engineers to fix it. They'll have to hire German, Japanese, or French engineers from the firms that produced the plans they stole to build these lines in the first place and then pay them to fix the mistakes the incompetent Chinese "engineers" made "adapting" them.

Are you sure what the joke is? (3, Insightful)

perpenso (1613749) | more than 2 years ago | (#35960172)

The joke is that there are no competent Chinese engineers to fix it. They'll have to hire German, Japanese, or French engineers from the firms that produced the plans they stole to build these lines in the first place and then pay them to fix the mistakes the incompetent Chinese "engineers" made "adapting" them.

I'm not sure the joke is what you are thinking. Its not that the new guys have to turn to the old guys for help, its that the old guys are willing to train their competitors/replacements.

Re:Safety Standards? (3, Interesting)

lennier1 (264730) | more than 2 years ago | (#35960308)

Depends on which train we're talking about.

One is a clone of the German Siemens Velaro train models while the other one is a Japanese design developed for their Shinkansen network.
Not sure about French designs but IIRC the Chinese also have some Italian Pendolino trains somewhere.

Re:Safety Standards? (2)

agw (6387) | more than 2 years ago | (#35960410)

The article says the speed was limited from 350km/h to 300km/h. That would fit the description of the Wuhan–Guangzhou High-Speed Railway which are trains based on both the Siemens Velaro and the Japanese E2 Series Shinkansen (according to wikipedia).

Only 300km/h! That slow!

In other news, in Germany Deutsche Bahn ordered 300 new high speed trains (to replace all existing trains) with a maximum speed of 249km/h (to have the trains fall into a lower, i.e. cheaper, regulation class).

Re:Safety Standards? (4, Informative)

perpenso (1613749) | more than 2 years ago | (#35960024)

Oh really? You mean there are existing safety standards for new technology? And here I thought it was just the engineer's conservative estimates...

What new technology? High speed rail is over a hundred years old. The billion passenger mark was hit in the 1970s. I think there is sufficient track record to establish standards.
http://en.wikipedia.org/wiki/High-speed_rail [wikipedia.org]

Yes, safety standards. (5, Insightful)

siddesu (698447) | more than 2 years ago | (#35960114)

There exist not only standards, but also products you can compare your solution against. For example, the Shinkansen has a safety record that is hard to believe -- no dead, only a few hurt, and only one derailment during a rather strong earthquake. There is a reason it has taken all countries with successful high-speed train networks years and huge investment to get where there are. Engineering isn't simple, and problems aren't readily solved by party directives.

I, for one, have made the point about safety biting the Chinese fast train in the ass just after they start the service many times. I think it is a very good thing that they are reacting the good way -- by slowing the rail, and looking into the trouble, instead of, you know, just running the trains at full speed and collecting the bodies.

Re:Yes, safety standards. (1)

MillerHighLife21 (876240) | more than 2 years ago | (#35960238)

Makes me happy to hear that somebody knows how to do it properly. I'd love to see high speed trains come to the US if it could be done well.

Re:Yes, safety standards. (4, Informative)

CaptainZapp (182233) | more than 2 years ago | (#35960456)

Actually France' TGV also has an exceptional track record regarding safety :

TGV Accidents [wikipedia.org]

Germany's ICE, however, had a bad accident with 101 fatalities (details here [wikipedia.org]), which was caused by a series of issues, but most notably by a faulty wheel design.

Nevertheless, high speed rail on a global scale has an exceptional safety record.

Re:Yes, safety standards. (1)

siddesu (698447) | more than 2 years ago | (#35960476)

Interesting -- and it has to be mentioned that (if I am not mistaken) the speed trains in Europe are operated both on high and low speed tracks -- which is probably making both engineering and management issues harder. Probably one consequence of that operation is a more complex wheel design.

Re:Safety Standards? (0)

milkmage (795746) | more than 2 years ago | (#35960286)

they put fucking melamine in milk and I'm not talking about the incident in 2008 - they did it again.
April 27 2011: http://www.miamiherald.com/2011/04/27/2187359/china-seizes-melamine-tainted.html [miamiherald.com]

ignoring safety standards is one thing..
this smells of old fashioned greed - someone is getting a huge bonus for coming in under budget and ahead of schedule.

i'd hate to be an astronaut in their space program.

Snatching defeat from the jaws of victory (3, Interesting)

mcrbids (148650) | more than 2 years ago | (#35960508)

How do you get severe cost overruns on *rail*?

Trains can carry an entire ton of cargo 500 miles while expending a single gallon of diesel fuel. Because of the extremely steady load, train engines routinely pull a million miles or more (with an overhaul every few hundred thou) before needing replacement.

Further, train tracks cost much less to maintain per mile than roads.

Now, I do realize that I'm referring partially to cargo rail common in the USA, rather than the higher speed passenger trains, but even so, the costs per passenger mile for any train should be dramatically less than car, bus, or plane.

Sounds like corruption at work, if you ask me. (Same as the USA loan crisis)

Good Dept ? Bad Dept (0)

Anonymous Coward | more than 2 years ago | (#35959960)

Depts resulting from building infrastructure to be utilised by all ? or Depts resulting from invading countries searching for WMD ?

Re:Good Dept ? Bad Dept (1)

_merlin (160982) | more than 2 years ago | (#35960062)

I'd be more worried about having a population who doesn't know the difference between departments and debts.

Re:Good Dept ? Bad Dept (1)

by (1706743) (1706744) | more than 2 years ago | (#35960160)

Was going to make a joke about calculating the eigenvalues of the department's debt matrix -- det(dept. debt). It sounded funny in my head.

You get what you incentivize/reward ... (3, Insightful)

perpenso (1613749) | more than 2 years ago | (#35959974)

It does not matter so much what you say you want, nor does it really matter what everyone knows is necessary or correct, you tend to get what you incentivize or reward. If you reward speed (wrt project/task completion) but only talk about quality then you only get speed.

Re:You get what you incentivize/reward ... (4, Insightful)

jd (1658) | more than 2 years ago | (#35960366)

Yeeeees, but you've got to be careful with that. You will get EXACTLY what you actually ask for, no more and no less, which is almost never what you really meant or want.

If you reward students for high grades in exams, you'll get just that. High grades. Not understanding of the subject, just high grades. If you reward bankers for making profits, you'll get just that. High profits. Not financial stability, just high profits.

The problem with incentives is that exceedingly few people are capable of setting them correctly. And not a single one of them will use "incentivize" as a word.

"must operate" (4, Insightful)

SuperKendall (25149) | more than 2 years ago | (#35959978)

No, you actually do not HAVE to operate the expensive rail system you built, if you cannot afford to.

The world is full of rusting hulks of things people once thought they had to have, like wind turbines in Hawaii and California... monuments to people who once thought they had to have something, that it turned out they could do without after all.

Would dropping some of the train lines hurt China economically? Without doubt, but then so does spending far more than you take in.

Re:"must operate" (3, Insightful)

Jartan (219704) | more than 2 years ago | (#35960020)

I think the point was more along the lines that the system doesn't have any value at all unless you run it. Yet when you run it the cost is high.

Houses on the other hand you can simply stop building so many and the ones you have go up in value eventually.

Not true (4, Insightful)

SuperKendall (25149) | more than 2 years ago | (#35960044)

Houses on the other hand you can simply stop building so many and the ones you have go up in value eventually.

There are lots of examples of houses being built and after being abandoned, never being bought and eventually fall into ruin. Detroit has a ton of examples of properties where this is true. Anything you let lie fallow falls apart eventually.. a rail system seems much the same to me, if you stop running it you can either maintain the rails hoping they will have future value, or just totally abandon the system and let it fall into ruin.

I agree though it's a worse position they are in.

Re:Not true (1)

phantomfive (622387) | more than 2 years ago | (#35960414)

lol in other words you spent all that time arguing about the accuracy of a metaphor (which by nature are not precise anyway), only to conclude that you actually agree? This place is insane.

Re:"must operate" (1)

syousef (465911) | more than 2 years ago | (#35960166)

I think the point was more along the lines that the system doesn't have any value at all unless you run it. Yet when you run it the cost is high.

Houses on the other hand you can simply stop building so many and the ones you have go up in value eventually.

That's a myth. Houses only go up in value while there's demand. That demand goes to 0 as the price goes up because people can no longer afford them. If they are unaffordable yet you stop building anyway, you end up with a slum with people cramming into less buildings so that they can afford them, squatting or being homeless. Those few who can afford nice houses move away or move into gated communities. You're talking about replacing one bubble with another, only this bubble leaves people poor and destitute.

The fact that Zhao Jian doesn't appear to understand this makes me question all of his economic conclusions.

Renewable resources. (1)

Anonymous Coward | more than 2 years ago | (#35959986)

You can always leave a house or use it. The rail system is there. It's a burden. You must operate the rail system, and when you operate it, the cost is very high.

Well for both a home and a railroad one can reclaim the land. Re-purpose it for other uses.

Re:Renewable resources. (0)

Anonymous Coward | more than 2 years ago | (#35960148)

It's just that a narrow strip of land going between two places that are already well connected by road isn't good for much: nobody wants a bamboo garden that long.

Re:Renewable resources. (0)

Anonymous Coward | more than 2 years ago | (#35960206)

It could end up the worlds most expensive bicycle trail. Other places with defunct rail lines have often found plenty of use with a rails to trails conversion.

Whoopee??? (1)

Black Parrot (19622) | more than 2 years ago | (#35960002)

Are we supposed to be cheering at the knowledge that we're not the only ones that f**ked up our money management?

Re:Whoopee??? (3, Insightful)

cosm (1072588) | more than 2 years ago | (#35960048)

Are we supposed to be cheering at the knowledge that we're not the only ones that f**ked up our money management?

No, I would say sighing at the fact the up and coming world governments haven't learned from the fallen, and the fact that we as well have chosen not to learn from failed predecessors either. Absolute power corrupts absolutely, and I feel the greed-driven will speed the entire global-economy off the rails in the coming years. When the big financial meltdown comes, I hope you're all ready. Inflationary capitalistic expansion will have its cost, and it will most likely end in human lives of those getting the trickle down from the top.

All those marketers, all those hedge-fund managers, all those financial instruments, the money printing, the interest rate hikes, the depletion of old-guard natural energy resources, the cost-cutting, the parasitic leeches of banks and speculative investment..they will kill the host before they kill themselves.

Re:Whoopee??? (1)

mustPushCart (1871520) | more than 2 years ago | (#35960240)

Could you elaborate or point to articles about this please? I am not challenging your stand but would simply like to read more. Thanks.

Re:Whoopee??? (1)

Kokuyo (549451) | more than 2 years ago | (#35960450)

With the public already this annoyed with our 'elite', I don't think the host will have to worry much as the body will turn against the parasites soon enough.

I think I will live to see the day when managers dangle from trees, strung up with their own neckties.

Disclaimer: I am NOT advocating the killing of people. I am just saying I expect it to happen.

Re:Whoopee??? (0)

Anonymous Coward | more than 2 years ago | (#35960586)

Thing is, this happened again, and again, and again, and again... throughout history. What did the people who hanged the 'elite' do? They either took their place, or became complacent that the new 'elite' will be better than the old 'elite', and they stopped giving a damn about what's going on. Until next time.

Re:Whoopee??? (0, Troll)

ArcherB (796902) | more than 2 years ago | (#35960146)

Are we supposed to be cheering at the knowledge that we're not the only ones that f**ked up our money management?

No. We need to be cheering because now we will stop hearing people sing the monorail song while saying "we have to get high-speed rail. The Chinese are doing it!"

I can't tell you how many times in the past few months I've heard high speed rail advocates point out that the Chinese are building one. Now maybe they'll STFU and stop asking for my tax dollars!

Re:Whoopee??? (0)

Anonymous Coward | more than 2 years ago | (#35960358)

I can't tell you how many times in the past few months I've heard high speed rail advocates point out that the Chinese are building one. Now maybe they'll STFU and stop asking for my tax dollars!

Nah, won't make a difference. To many, high-speed rail is a quasi-religion: "High-speed rail is the future. The Chinese cut corners; we just need to prevent that from happening here."

Don't think I will take a trains herein the USA (2, Interesting)

rolfwind (528248) | more than 2 years ago | (#35960016)

either. When I go to Europe, I see them continuously replacing the ties with new ones, I guess the rails themselves along with it. Concrete ties are not uncommon.

Last year, in my area, the traffic signal for a train came down and I had to wait 10 minutes for this slow movng freight train. When it finally was within sight, the rail jumped up 24 inches, along with these half-rotten ties (they must have been ancient), completely out of the ground! It was nuts. Then as the train was going over it, any time there was a space in the wheels, it kept flopping up and down, until the train left and there was quite a bit of distance from it.

It looked so freaking dangerous, I was concerned enough to call with the local train authorities, and they were like "Yeah, that's normal. Why you think we make the freight trains move so slow in the first place" and basically hung up on me without wanting to even know exactly where.

Re:Don't think I will take a trains herein the USA (1)

SheeEttin (899897) | more than 2 years ago | (#35960092)

And here I though Pan Am Railways (formerly Guilford) was bad...

Re:Don't think I will take a trains herein the USA (2, Insightful)

Anonymous Coward | more than 2 years ago | (#35960152)

Why not get a video of it and send it to a local news station?

Re:Don't think I will take a trains herein the USA (0)

Anonymous Coward | more than 2 years ago | (#35960218)

Dude, I totally understand! There is no way I'm going to take a motor vehicle trip here in these United States either. In every country I've ever been in they're _ALWAYS_ doing road work. High-tech permeable and stable aggregate bases with smooth asphalt pavement is not uncommon.

The other day I was in these back woods and saw a 4x4 working on getting up this washed out dirt forest road. This road must have been ancient because the ruts were huge. The Jeeps suspension must have been flexing about 97 inches, and it had to try at this huge ravine about four times before it got up. It was going sooo slow and I had to wait about 10 minutes before I was able to hike pass, but it was raining recently so the mud was slippery.

It scared me so bad I pooed my pants. Scared me so much I went and talked to the spotter, and he was like "Dude what the fuck are you talking about? This is off-roading on an totally unmaintained logging road. What do you expect?" Then he just walked away like it was nothing.

But seriously I hope you were being sarcastic in your post. Unfortunately I see way too many people without the ability to differentiate these real life situations. They also seem to vote. Crappy ass end of the line delivery tracks != mainline freight rails. And they are nothing like high speed passenger rail lines.

Re:Don't think I will take a trains herein the USA (1)

jd (1658) | more than 2 years ago | (#35960418)

Sadly, that doesn't shock me. There are way too many accidents [wikipedia.org] in the US rail system that have no business being possible. Of course, there's been a fair few in other countries - Britain has an unenviable record for avoidable fatal rail accidents. One of the worst disasters of all times, the Eschede train disaster, was perhaps the most extreme example of politics and rulebooks causing fatalities when prudence would have been the wiser choice. I have noticed, however, that prudence is unpopular in any environment where results are what matter. It would be good if caution were rewarded, but it's usually seen as cheaper to sweep up the bodies afterwards.

Re:Don't think I will take a trains herein the USA (1)

Malc (1751) | more than 2 years ago | (#35960526)

To be clear: Eschede was not a British disaster, but a German one.

You have to invest in the infrastructure (1)

fantomas (94850) | more than 2 years ago | (#35960572)

As other posters have noted, you have to keep investing in the infrastructure. If you don't it falls apart through use and lack of maintenance. Same for roads, houses, bridges. Railways are no different. That's why we're working on our railways all the time in Europe, keeping them up to date and replacing older worn out parts. Any house owner will tell you there's always a little job to be done on maintaining their house as well, got to check all is good after each winter, etc.

It's always surprised me how little attention the USA pays to its rail infrastructure, but then I think it's a country that operates under different philosophical frameworks from Europe (e.g. more extreme pressure by car makers to run down the rail network, perception that rail is not good for moving people, etc). Only in New York have I seen the attitude that rail travel is useful to have (the metro - I am not sure NYC would vote on closing it down).

Luckily for us here in Europe rail travel is seen as more desirable so gets better funding (sometimes...). My favourite way to travel. Given the choice between sitting behind the wheel of a car and concentrating on grey tarmac for 6 hours or stretching out in a chair, reading, playing on laptop, snoozing, taking a stroll up and down the cabin, having lunch while the world goes by, I prefer the latter (my bias ;-) )

Look ahead, or not. (1, Insightful)

Bruha (412869) | more than 2 years ago | (#35960022)

I believe China is not so stupid to believe that Oil will always be there, otherwise they would not be the world leader in installed renewable energy. On the other hand, communist heads of government in the country really need to deal with the corruption, but the build it faster will always come at reduced quality where humans are the builders. Quality work needs time, but the other problem is that as Oil costs go up so does the costs to build these green transport systems.

Reducing dependence on oil and using it only for advanced purposes would stretch it for a very long time. I think about a third goes into people's gas tanks, while the rest goes into advanced petrol products such as plastics and generic purposes such as fertilizer.

As a race it's annoying that a very vocal minority is derided by a majority that just refuses to believe we will ever run out. Within a hundred years we will be faced with three challenges. Fusion power to power our cities, combating global warming induced by our drive to have what we have today and expand it, and a large decrease in oil to provide the building blocks of advanced materials. Solving the energy equation should be a global priority, Fusion and renewables will provide what we need to fix the other two problems. If we fail in this, we may regress back a few hundred years, after several bloody wars that might just wipe us out anyways because I know damn well that majority will refuse at all costs go give up what they will lose if they fail to fix those 3 problems. And they'll probably take the human race with them.

Re:Look ahead, or not. (4, Interesting)

HBI (604924) | more than 2 years ago | (#35960096)

Straw man argument.

No one really believes we won't run out. Some of us just don't care much. When commodities run out, they subsidize their replacements via outrageous cost. Besides, the momentum is unstoppable, anyway. Usually, we learn not to tilt at windmills.

What you're really calling for is to artificially decrease demand for oil, which isn't going to happen in a sane world. Any attempt to do so will simply create a gray or black market in oil to those who refuse to cooperate with the regimen. Those who produce will be all too willing to sell, and those who consume will be all too willing to continue, while paying lip service to the goal. It likely would even increase demand for oil until it is all gone. Then the solution summarized in the previous paragraph will happen in any event.

About the only way to subvert the whole process before oil runs out would be to create a renewable organic fuel with limited negatives vis a vis fossilized plant matter. Something that burns in current engines with limited modification. Arrange for it to be cheaper than extraction of said fossilized plant matter. That would work, but it's a tall order. However, if one wanted to 'save the earth' to the extent that CO2 is a danger, that seems to be the most promising path.

As for why organic - the economic dislocation of changing every ICE in the world over to something else would eliminate any cost advantage in the fuel in any reasonable time frame. That's why hydrogen always sounded like a nonstarter to me. It depended on too many immature or nonexistent technologies to prosper.

Re:Look ahead, or not. (1)

msobkow (48369) | more than 2 years ago | (#35960364)

About the only way to subvert the whole process before oil runs out would be to create a renewable organic fuel with limited negatives vis a vis fossilized plant matter.

They already have. It's called bio-diesel. And the hemp version doesn't require all the fertilizers and prime crop land that some bio sources do. But it does require a shift to diesel engines from gasoline engines, something the Europeans are way ahead of North America on doing.

Re:Look ahead, or not. (0)

Anonymous Coward | more than 2 years ago | (#35960522)

[[ the economic dislocation of changing every ICE in the world over to something else ]]
ICEs wear out and are replaced all the time anyway. Some last a long time, some don't. (Some of the ones that last a really long time, e.g. tanker engines, aren't even up to emissions standards put in place 40 years ago. So those would be free to keep burning old fuel as long as they want.)

But my point is if you make new engines and put them in new cars, people will buy them when their old cars wear out. This is how they managed to "retrofit" daytime running lights and airbags into so many cars at such a modest cost.

Re:Look ahead, or not. (0)

Anonymous Coward | more than 2 years ago | (#35960200)

I believe China is not so stupid to believe that Oil will always be there

...the trouble with our liberal friends is not that they're ignorant; it's just that they know so much that isn't so

Wishfull thinking for USA (3, Insightful)

SteveOHT (1150091) | more than 2 years ago | (#35960038)

Where are the stories of wrecks? They don't standout in my memory anyway. Plus, the second link says they have twice the assets as they have debt. Nothing like the 40 dollars of assets to 39 dollars debt plus in the USA sub prime. Are these stories simply "sour grapes" or what?

Re:Wishfull thinking for USA (5, Informative)

Anonymous Coward | more than 2 years ago | (#35960066)

Melamine in baby formula and animal feed to spike low protein counts (http://www.time.com/time/world/article/0,8599,1856168,00.html)
Coal mine accidents in disproportionate amounts when you compare China's coal production to that of other countries (http://www.chinadaily.com.cn/english/doc/2004-11/13/content_391242.htm)
Melted down anything remotely resembling metal in the late 50s (The Great Leap Forward) to try to match the United Kingdom in steel production - an arbitrary goal set by Mao Zedong - naturally, the product was useless (http://en.wikipedia.org/wiki/Backyard_furnace)

China has come a long way since the end of Republican Era but has also consistently cut corners whenever possible. This isn't an issue of sour grapes, simply one of history.

Re:Wishfull thinking for USA (1)

hedwards (940851) | more than 2 years ago | (#35960156)

I'm curious about this, in the US we've been doing that recently, is the difference really as simple as at what point the corners began to be cut? Or is there something more going on here to suggest where we're likely to end up.

Re:Wishfull thinking for USA (2)

phantomfive (622387) | more than 2 years ago | (#35960338)

No, it's not that good. The guy you are quoting is the ex-Minister of the Railroad, Sheng Guangzu, who is currently faces serious corruption charges. The assets aren't worth much if no one will buy them (and right now, it doesn't look like a good cost).

The reason a lot of us are interested in this story is because we thought it was really cool when China started building high speed railroads. We wanted some here, too. But it's really depressing how it turned out.

NO PROBLEM !! COLLECT FROM USA PEOPLE !! (0)

Anonymous Coward | more than 2 years ago | (#35960054)

It owes CN an hell of a lot of moola !! Problem then is, who would buy the inferioir yet cheap CN product ?? I can think of no other cheap-ass society than them, so then CN has no place to unload its crap !! And so it continues. Then again, CN can always just scrap it and let the peasants take a bus.

This ties in with China's false economy... (5, Interesting)

blanchae (965013) | more than 2 years ago | (#35960076)

It looks like China is heading for an enormous debt crisis. Add the creation of ghost cities [fark.com] as covered earlier this month and it looks pretty scary! It'll make US's debt crunch look like a drop in a bucket.

Bubbles in China (5, Informative)

cold fjord (826450) | more than 2 years ago | (#35960088)

'In China, we will have a debt crisis — a high-speed rail debt crisis,' says Zhao Jian, a professor at Beijing Jiaotong University and longtime critic of high-speed rail who worries that the cost of the project might have created a hidden debt bomb that threatens China's banking system. 'I think it is more serious than your subprime mortgage crisis. You can always leave a house or use it. The rail system is there. It's a burden. You must operate the rail system, and when you operate it, the cost is very high.'"

Unfortunately, that apparently isn't the only bubble in China:

How Big Is the Chinese Property Bubble? [seekingalpha.com]

In times of crisis alternative economic models become more appealing. Since the USA, the beacon of capitalism was the epicentre for the current crisis and the Chinese economy escaped relatively unharmed, there is a certain logic in asserting that the central planners in China have the right economic prescription.

But as James Chanos and others have pointed out, centrally planned economies lead to malinvestment and nowhere is that malinvestment more manifest than in China’s Property market. Consider John Mauldin’s November 24th, Outside the box interview with Vitaliy Katsenelson. Katsenelson compares Japan’s property bubble of the late 1980s to modern day China and the results aren’t pretty.....

China's credit bubble on borrowed time as inflation bites [telegraph.co.uk]

The Royal Bank of Scotland has advised clients to take out protection against the risk of a sovereign default by China as one of its top trade trades for 2011. This is a new twist.

It warns that the Communist Party will have to puncture the credit bubble before inflation reaches levels that threaten social stability. This in turn may open a can of worms.

"Many see China’s monetary tightening as a pre-emptive tap on the brakes, a warning shot across the proverbial economic bows. We see it as a potentially more malevolent reactive day of reckoning," said Tim Ash, the bank’s emerging markets chief.

Officially, inflation was 4.4pc in October, and may reach 5pc in November, but it is to hard find anybody in China who believes it is that low. Vegetables have risen 20pc in a month.

China: the coming costs of a superbubble [csmonitor.com]

China may seem to have defied the recession and the laws of economics. It hasn't. When China's bubble bursts, the global impact will be severe, spiking US interest rates.

The world looks at China with envy. China’s economy grew 8.7 percent last year, while the world economy contracted by 2.2 percent. It seems that Chinese “Confucian capitalism” – a market economy powered by 1.3 billion people and guided by an authoritarian regime that can pull levers at will – is superior to our touchy-feely democracy and capitalism. But the grass on China’s side of the fence is not as green as it appears.

In fact, China’s defiance of the global recession is not a miracle – it’s a superbubble. When it deflates, it will spell big trouble for all of us.

It seems likely that the world has a few more financial tremors coming.

Re:Bubbles in China (1)

mosb1000 (710161) | more than 2 years ago | (#35960406)

That's not good, because we're counting on them to buy our bonds to continue funding our government's operation over at least the next decade or so.

Government-created debt crises (4, Interesting)

meburke (736645) | more than 2 years ago | (#35960122)

Yeah, China is about due. Japan and the USA (along with Greece, Ireland, Spain, and others) ignored basic economic principles and are paying the price. (I'm NOT talking about the Tsunami tragedy in Japan, but the stagnation of the economy.) "Stimulus" money has to come from the places where it's produced, and is a by-product of productivity. If you loan money to people or projects, those recipients need to have the means to pay it back. Governments do not produce anything, so they must get their money from those who are productive. To "stimulate" the economy, they are taking it from productive projects (Exports), skimming expenses off the top and then sending it back as "stimulus" funds. The other alternative is to create money out of thin air, which causes inflation. Either way, the so-called "stimulus" loses its effectiveness the more often it is used. Japan's last big stimulus attempts created almost no movement in their economy; not even short-term.

China's rail problem is not the cause of the bank problems: The cause is that banks were forced to loan money to unsound projects at unrealistic rates. China has huge amounts of "Sovereign Wealth" due to their absolute and competitive advantages over their Western customers, but they have no place to put it, internal to China. Distributing it to unsound projects wastes resources and unbalances the internal economy. Some infrastructure development could bolster the economy (like toll roads in the USA). However, the implication derived from the banker's statements is that the "tolls" from operating the railway are not sufficient to service the debts. Banks don't get their money back and the government gets to subsidize a losing project. (Sound familiar?)

Re:Government-created debt crises (1)

Asic Eng (193332) | more than 2 years ago | (#35960548)

Governments do not produce anything

That's a matter of definition, if services like water, road networks, mail delivery, scientific research and defense are not products, then companies like Google don't produce anything either.

Also there are plenty of state-owned companies all over the place - whether governments produce specific things or not is a choice.

Dang... (3, Funny)

Anonymous Coward | more than 2 years ago | (#35960126)

If China gets into a debt crisis, who's going to loan us money to cover our debt crisis?

Myth of China (1, Insightful)

jmorris42 (1458) | more than 2 years ago | (#35960128)

So will certain New York Times blowhards now stop holding up China as the model to emulate as we learn almost daily they have as many problems as we do? Nah. They get off on the idea of an all powerful State that 'gets things done.' And if a hundred million people in mass graves didn't clue em in that Communism sucks then nothing will.

Likewise for the cadre of Young Communists here on /. of course.

Re:Myth of China (1)

icebraining (1313345) | more than 2 years ago | (#35960478)

Mao's Great Leap Forward did cause millions of deaths, but that was when China was communist. It hasn't been for at least 20 years, starting with Xiaoping.

Is it more or less profitable than their roads? (1)

mozumder (178398) | more than 2 years ago | (#35960144)

How much profit is the Chinese road system making for the government?

Also, how much of a profit does other government services, like defense and police, make for the chinese government?

Subsidies, hidden or just unacknowledged? (0)

martinX (672498) | more than 2 years ago | (#35960150)

Here in my home state, the state government subsidises train travel so the commuters only pay about 25% of the actual value of a rail ticket, a subsidy that's rarely spoken of. And still the commuters whinge about the "high cost of train travel".

Re:Subsidies, hidden or just unacknowledged? (1)

spectrokid (660550) | more than 2 years ago | (#35960482)

Here in my home state, the state government subsidises CAR travel so the commuters only pay less than 25% of the actual value. You see: they get the roads for free. The argument of road vs. rail is ridiculous. Tell your local truckdriver that from now on he has to build his own roads and lets see how long he stays competitive.

The rail is the debt bomb? (2)

Mashiki (184564) | more than 2 years ago | (#35960158)

Hardly. Their debt bomb is the ghost cities, and hyper inflated housing prices. With the average wage under $3k/usd a year, and hosing prices fast approaching half a million, there's going to be some serious really fast.

Re:The rail is the debt bomb? (1)

TopSpin (753) | more than 2 years ago | (#35960274)

Their debt bomb is the ghost cities...

China doesn't have a debt bomb. The $276G is about 1/4 of their US Treasury holdings; they could build more than four more rail networks with what they've invested in US debt. At worst, $276G is a nice, healthy Chinese scale boondoggle. Anyone calculating how much `freeway' building they've offset?

On the other hand, $276G is a mere two months of US federal deficit spending; 1/6th of the projected 2011 deficit. Every 60 days we overspend that amount to buy various dependent constituencies, as opposed to something of value like a high-speed rail network.

We are the debt bomb.

Re:The rail is the debt bomb? (1)

WindBourne (631190) | more than 2 years ago | (#35960460)

This is China's SMALL debt. Most ppl outside of China consider this to be a minor issue, equal in size to our housing bubble that W had developed. They have much much more debt elsewhere. Their housing bubble is what is going to destroy them.

More proof of a pissing contest (2)

antifoidulus (807088) | more than 2 years ago | (#35960170)

This is just more proof the the Chinese government built this just to win a pissing contest. First of all note that they are saying "fastest", but it's really just the fastest AVERAGE speed. The reason they chose average to compare themselves with the TGV and whatnot is that they can jack up the average speed merely by changing operational parameters. The TGV is forced to, by law, slow down when near cities. This is done out of both noise and safety concerns. If the French government didn't mind shitting all over it's citizens like the CCP does, then it would have the fastest average speed. Chinas government is more than willing to sacrifice its citizens lives and health just to inflate their own egos.

Re:More proof of a pissing contest (1)

Malc (1751) | more than 2 years ago | (#35960198)

This is just more proof the the Chinese government built this just to win a pissing contest

And what's your point? It's a developing nation's version of the US' space programme and trying to get to moon.. but probably has more benefits.

Simpsons did it! (0)

Anonymous Coward | more than 2 years ago | (#35960202)

Simpsons did it!

Can't wait! (0, Flamebait)

Anonymous Coward | more than 2 years ago | (#35960252)

I can't wait until California gets a high speed rail system! Obama and the voting lemmings^Wmasses have convinced me that this is going to be huge for our state economy and modernize transportation. Just look at all the successes the Chinese have had! Their people can now not get from one point, to another, at blazing speeds of over 200mph! Wait... what's that you say? Huge burden on their economy? Lack of ridership? Safety issues requiring them to slow down the trains? But... but... what about my eco-friendly, idealistic, blind to facts utopia? WON'T SOMEONE THINK OF THE CHILDREN?!?!?!

Re:Can't wait! (1)

junk (33527) | more than 2 years ago | (#35960262)

I didn't intend to post that anonymously. Feel free to attack me directly.

We all know what's REALLY going on here: (0)

Anonymous Coward | more than 2 years ago | (#35960256)

They're being driven by Asians!

The name's Lan-Lei. Lao Lan-Lei. (1)

Riktov (632) | more than 2 years ago | (#35960270)

I've built high-speed trains to Zhengzhou, Wuhou, and North Shenyang, and by gum it put them on the map!

decrease to 186 (0)

Anonymous Coward | more than 2 years ago | (#35960304)

> decreased from about 218 mph to 186

Which still leaves it about 110 mph faster than the average speed of the US "high speed" trains. Maybe it's an OK speed still.

Why mph and not km/h in Slashdot? (1)

dovgr (935487) | more than 2 years ago | (#35960360)

I thought we just had a discussion a couple of days ago describing the insanity of using anything but SI units!

$276 billion is... (2)

Tailhook (98486) | more than 2 years ago | (#35960372)

17.6% of the annual deficit of the united states. About 1550 hours worth of new debt.

"Change" is coming. One way or the other...

Not yet the worst of it... (2)

VendettaMF (629699) | more than 2 years ago | (#35960374)

The story I'm hearing here in China is that the majority of the "Specially trained, highly skilled, highly experienced and professional" construction workers used their extra salaries to hire regular labor off the farms and streets to sign in and do their work for them, paid them the normal construction rates, and then stayed home on the other 80% of the salary.

This is why USA should NOT do the standard approac (2)

WindBourne (631190) | more than 2 years ago | (#35960426)

The old 2 tracks was fine for slow and cargo trains. It is poorly designed for highspeed rail. Instead, the USA should be developing monorail with seraphim motor. It is easier to automate the operation as well as installation. That is important.

But.. They are not 'coming off the rails' (0)

1s44c (552956) | more than 2 years ago | (#35960430)

The trains are not 'coming off the rails' to state that is an outright lie.

This is but ONE of China's bubbles (2)

WindBourne (631190) | more than 2 years ago | (#35960436)

China has so many bubbles. This is just part of the infrastructure bubble. The west should be working hard to get new companies with automation started here. China's cold war is going to explode in its face. We do not want to be there, or one of its victims.

Safer than the alternative? (0)

Anonymous Coward | more than 2 years ago | (#35960496)

The railways don't actually have to be safe, just safer than the highways. I understand that light rail is often less green and economic than one might think because we hold trains to much higher safety standards than automobiles. No idea how a comparison would play out.

No comment on the debt issues.

An old American proverb... (0)

Anonymous Coward | more than 2 years ago | (#35960518)

Do you want it completed quickly, correctly or cheaply? Pick two any two.

Here's hoping no one gets hurt and they're able to correct the problem. Good luck.

High speed steam trains (0)

Anonymous Coward | more than 2 years ago | (#35960524)

High speed steam trains regularly ran at over 100 miles per hour:
http://en.wikipedia.org/wiki/LNER_Class_A4

Pricing Check (2)

General_Fei (1811884) | more than 2 years ago | (#35960570)

Weird, it was only a few months ago that the incredible real estate bubbles started to pop here. Come to China and be absolutely astonished at the ads for apartments and new complexes. I bet at least 70% of the little plastic advertising frames in Chinese elevators contain ads for a new, swank high-rise complex.

On the high-speed train: when I was first here, in 2008, the only high-speed train of consequences was the one that ran Beijing Tianjin (did it in 45 minutes flat). There have been a truckload of new ones since then, in particular the famous "Harmony" line (hexie hao or wohaai hou) from Wuhan to Guangzhou that has turned the old 12-hour stab-your-eyes-out-in-hard-coach-sleeper trip into a 3.5-hour whoosh. Here's the kicker - look at the pricing scheme for the Harmony: the old 12-hour trip is 120-ish (US $19) for a hard sleeper, while the new one is 490 (~$75 US) for a standard seat. Is a price quadrupling really enough to pay for the jump in technology, which was probably an order of magnitude more advanced/expensive than the previous system?

Going off the beaten path... (0)

Anonymous Coward | more than 2 years ago | (#35960588)

I would be most astonished if one of their trains is named Ruby.

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