The Chinese railway goes global: territory and economy at stake
Developed in less than a decade, the Chinese railway is known as one of the fastest and the largest railways in the world, and China now looks to export at an international level. The new railway projects imply economic and political stakes.
In June 2015, the two biggest Chinese public enterprises were absorbed into the China Railway Rolling Stock Corporation (CRRS Corp), so as to stimulate their competitiveness on the global market. There are three main steps in the expansion of the Chinese high-speed railways.
The second step concerns the projects that are already approved and for which construction is supposed to start soon. Most of them also are freight transportations. For example, a future high-speed train will link Kunming to Bangkok in 2021, therefore speeding up trade and movement of individuals. Moreover, The Economist reports the imminent construction of a Los Angeles-Las Vegas high-speed railway, in which China will provide an initial capital investment of $100m.
But the most significant upcoming railway project is the Indonesian high-speed railway, whose bid has been recently won by China. As there is an increasing demand for high-speed railways in the Southeast Asian region, it is highly probable that the country who wins the Indonesian bid will be the front-runner for future rail projects. Signed on October 17, 2015, the agreement is thereby decisive with regards to the “One Belt, One Road” strategy, which aims to build a network of railway roads and ports between Asia and Europe.
A third step relates to projects under discussion; they have neither been constructed nor been approved yet. For instance, an agreement concerning the high-speed railway Moscow-Beijing – which would divide the travel time by 3 – should be signed soon. Another interesting project is a railway traversing South America, also meant to boost trade. This would for example reduce the cost of sending Brazilian soybeans and iron to China.
However, there are still several limits that China needs to consider. The example of the failed Burmese railway project, due to local protests, is a clear demonstration of China’s difficulties to include keylocal actors. In addition, the lack of transparency in the bidding process, as pointed out by the Japanese during the Indonesian bid, is a persistent obstacle for the development of the Chinese railway, as it also already happened in Mexico. Nevertheless, the Chinese railway diplomacy strategy is underway.