On this episode of China Uncensored, I've been working on the railroad.
All the livelong day.
Hi, welcome to China Uncensored, I'm your host Chris Chappell.
The United States is way behind the rest of the world when it comes to trains.
There isn't a single high-speed rail line in the whole country.
The company XpressWest has been trying to build a high-speed line between Los Angeles
and Las Vegas for years.
It would reduce travel time from four hours to 80 minutes.
The project has been stalled because they couldn't get a federal loan.
But now they have a major investor from across the Pacific.
It's called The China Railway Group.
It's the second-biggest industrial company in the world.
Last month China Railway International USA announced that they've signed a joint venture
with XpressWest, and that construction will begin in September 2016.
China Railway International USA is owned by a consortium of five subsidiaries of Chinese
state-owned enterprises, which includes the China Railway Group.
(can show on screen: China Railway Group , CRRC Corp , China State Construction Engineering
Corporation and China Railway Signal & Communication Corporation.)
The 21 Century Business Herald reported the project will take three years and cost nearly
13 billion dollars.
So where's all that money going to come from?
Uh... that's not really clear yet.
But China Railway International USA at least promised to put up the first hundred million.
And if this all works out, China and its consortium of subsidiaries of state-owned enterprises
will have its foot in the door to be a part of other high-speed rail projects.
Like that line between San Francisco and Los Angeles that people have been talking about
for 20 years.
China Railway International USA recently sent in their proposal for designing, building
and financing it.
And a related Chinese company broke ground last month on a new factory in Massachusetts
where they will be building 284 subway cars for the Boston transit system.
But do we really want the Chinese building American railroads?
What's that, Shelley?
Oh.
Um, yeah,sorry about that whole, Chinese Exclusion Act thing.
Ahem.
So why does America want China involved in building its transportation this time around?
Like so many things, it comes down to money.
According to this World Bank report, the cost of building high-speed rails in China is up
to 46% lower than it is in Europe.
That's partly because the Chinese government is more efficient at building straight rail
lines through people's neighborhoods.
And of course the cost of labor there is cheaper.
But that doesn't mean those factors will carry over to the United States.
It's just that China is willing to put up a lot of the cash and take big risks.
China has the largest network of high-speed rails in the world and plans to double its
size by 2020.
China is also in talks to build or sell high-speed trains in more than 20 countries.
So how did China manage to conduct all this high speed rail development?
Simple.
They stole the technology from Japan.
In fact, at least one Chinese economist has praised China's "bandit innovators."
It's like when I steal my neighbor's lawnmower.
I'm really giving him value...
When I offer to mow his lawn with it at a reasonable price…and the lawns of all the
neighbors down the street.
China sees railways as a way to increase its international prestige.
And they do it by being cheaper than the competition--even if their profit margins are thin at first.
But Chinese railways still have image problems... after that deadly high-speed rail crash in
2011 that the Chinese regime tried to cover up.
The whole system was so corrupt that the Chinese government eventually dissolved the entire
Ministry of Railways, and gave former Railways Minister Liu Zhijun a suspended death sentence
for bribery and abuse of power.
Part of the reason the US has failed to develop its own high-speed rails is that private investors
see it as a big risk, despite the boon to the economy it would bring from having better
transportation, not to mention the joy of commuters.
The costs are high and the return on investment, questionable, if the government doesn't put
up enough funding.
The government doesn't put up funding because of opposition on the right.
House Majority Leader Kevin McCarthy, a California representative, has said he would block federal
funding for any high-speed rail in California.
No word on how US lawmakers feel about having another country funding these…
boondoggles.
So what do you think about the US's lack of high-speed rail and the idea of China filling
the gap?
Leave your comments below and check back next time for more episodes of China Uncensored.
Once again I'm Chris Chappell, see you next time.