China may have bankrupted itself building high-speed rail
We're all about high-speed rail, but not if it's going to bankrupt the world's second largest economy.
Zhao Jian, a professor at Beijing Jiaotong University and a longtime critic of high-speed rail, said he worries that the cost of [the country's high speed rail] project might have created a hidden debt bomb that threatens China’s banking system.
“In China, we will have a debt crisis — a high-speed rail debt crisis,” he said. “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.”
Yikes! And you thought fighting three simultaneous wars was expensive. One of the problems could be that the Chinese government kind of went overboard. It's as if they went in thinking they'd just get a bare-bones package and came out with the high end stereo, heated seats and the underbody protection:
“They’ve taken on a massive amount of debt to build it,” said Patrick Chovanec, who teaches at Tsinghua University. He said China accelerated construction of the high-speed rail network — including 295 sleek glass-and-marble train stations — as part of the country’s stimulus spending in response to the 2008 global financial crisis.
That's not an argument not to build high speed rail in America; more like, we probably just shouldn't commit to 16,000 miles of the stuff, as the Chinese have.
Right now the railway ministry owes Chinese banks $276 billion. For perspective, if you sold 100 percent of Apple's stock to space aliens, it would just be enough to cover that debt.
Are China’s high-speed trains heading off the rails?, Washington Post.
Donate now to support our work.