Bloomberg News

China Holds Test Run on World’s Longest High-Speed Railway Link

December 23, 2012

China Holds Test Run on World’s Longest High-Speed Railway Link

A China Railways CRH3 high speed train is parked at the Beijing South station in Beijing, China. Photographer: Nelson Ching/Bloomberg

China tested its 2,298-kilometer (1,428-mile) high-speed rail line, the longest in the world, as it prepares to start passenger service in two days.

Bullet-trains on the line from Beijing to southern Chinese city of Guangzhou can run at an average speed of 300 kilometers per hour, the official Xinhua news agency said. It will shorten the rail travel time from the capital to the Pearl River Delta to about eight hours from the previous 24 hours.

China is accelerating railway investment again after it introduced new safety measures following a deadly bullet-train crash in Wenzhou that killed 40 people in July 2011. Railway investment as of October rose almost 250 percent from a year earlier as the government stepped up fiscal measures to help growth.

“Government-driven investment has quick effects on boosting growth in the short term,” said Yuan Gangming, a researcher with the Chinese Academy of Social Sciences, a government think-tank based in Beijing. “But you can’t rely on investment to drive growth forever.”

Yuan said China had a “great leap forward” in spending on railways since 2008 and this is expected to “normalize” in coming years with the completion of major lines such as the Beijing-Guangzhou high-speed link.

More than 100 Chinese and international journalists were invited to join the Dec. 22 test run, Xinhua said.

Hong Kong

The bullet-train line will be extended to Hong Kong in the future and will add to competition for China Southern Airlines Co. (1055) A380s flying between the cities, a flight lasting about three hours with an economy class ticket costing 1,620 yuan ($260).

A second-class train ticket on the line, which winds through major inland Chinese cities, including Zhengzhou, Wuhan and Changsha, costs 865 yuan, while a first-class ticket costs 1,388 yuan, Xinhua said. Competition from the new railway line for airlines operating Beijing-Wuhan and Beijing-Zhengzhou flights will be intense, China’s state television reported today.

China Southern Airlines is offering discounts of as much as 73 percent and Air China is offering a 57 percent discount for flights between Beijing and Wuhan on Dec. 26, according to company websites.

Investment Cost

China’s Ministry of Railways didn’t publish a total investment amount for the high-speed line because it was developed in parts and then connected. The Wuhan-Guangzhou section, which extends 1,069 kilometers and began operating a year ago, cost 116.6 billion yuan.

Another landmark Chinese high-speed railway, the 1,318- kilometer Beijing to Shanghai link that started operating in June 2011, cost 220.9 billion yuan.

China’s railway ministry didn’t publish the financial performance of the high-speed railway lines.

China has boosted its railway infrastructure spending plan to 516 billion yuan in 2012 from the 406 billion yuan set at the beginning of the year, helping the share price of CSR Corp Ltd. (601766) and China CNR Corp., the nation’s two leading train makers.

To contact the reporter on this story: Xin Zhou in Beijing at xzhou68@bloomberg.net

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net


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