Cost of High Speed Rail Manifests

Caixin: China to Boost High-Speed Rail Tickets on Ningbo-to-Shenzhen Line

China will raise prices on a stretch of its state-of-the-art high-speed rail network in the southeast part of the country, marking the first such increase since 2015 as the operator seeks to strike a balance between supply, demand and its large debt load.

The hikes will see second-class ticket prices rise by 25% to 30% on the stretch of rail between the eastern port city of Ningbo and the southern city of Shenzhen, across the border from Hong Kong, an official with the local rail authority told Caixin, speaking on condition of anonymity. First-class ticket prices will rise by an even steeper 65% to 70%, he said.

...To partly compensate for the price hikes, the rail operator will increase train speeds on the line to 250 kph from a previous 200 kph. Upgrades are currently being made to the line to facilitate such higher speeds, and should be ready by the time new prices take effect on April 21. By comparison, trains on the lines connecting Shanghai and Ningbo run at 300 kph.

One Default Averted: China Railway Materials Makes 6.8 B Yuan in Payments

Back in April, Bloomberg: China Railway Materials Seeks Debt Restructuring Amid Bond Halt

China Railway Materials said in a Monday filing that it had suspended trading on its 16.8 billion yuan ($2.6 billion) of outstanding notes as it studies debt repayment issues. The firm had interest-bearing debt of 34.2 billion yuan and its debt-to-asset ratio was 87.8 percent at the end of September 2015, according to its filings.

See also SCMP: China Railway Materials hits bond brake as company sputters in slowing economy

The company has been paying maturing debt on time thus far.

Sina: 国资委：中国铁物按时兑付年内到期68亿元债券

As of August 13, 6.8 billion yuan bonds maturing during the year have been paid on schedule, effective maintenance of the central corporate credit markets and investors confidence.

Still leaves 10 billion to go.

NDRC Finds Solution to Slow Growth: More High Speed Rail

What do you do when you lose money on every transaction? You make up for it with volume.

"High Speed ​​Rail economy" has become an important starting point for steady growth.

...If the issuance of "long-term railway network plan" is a "compulsory exercise", the NDRC for 5 days issued a document pushing "high-speed rail economy" rare "overweight action", to build China's "high speed rail economic ecosystem" intent is clear.

iFeng: 发改委罕见连发五文挺高铁经济 初露锋芒好戏在后头

Reuters: China to expand railway network to 150,000 km by 2020

China will expand its railway network to 150,000 km (93,200 miles) by 2020, including 30,000 km of high-speed rail, the country's top economic planner said on Wednesday.

The plan will mean a 24 percent increase in the length of China's railway network from 2015 and a 58 percent expansion in high-speed rail.

WSJ: China’s Busiest High-Speed Rail Line Makes a Fast Buck

Vast spending on rail projects continues, ballooning from 155 billion yuan in 2006 to more than 800 billion yuan last year, government data show. The government has budgeted 800 billion yuan for railway construction this year.

From less than two weeks ago here: China Has Only 6 Profitable High Speed Rail Lines

Loser Cities of the New 8x8 High Speed Rail Network

The old "iron age" rail network is on top, followed by the new high-speed rail system. The cities said to be losers, which figured into the old network but not the new, include:

High-speed rail era, why these cities become "losers"?

We are above "eight vertical and eight horizontal" make an overall inventory, respectively, to identify the Chinese city "high iron hegemony", "iron hot", "high-speed rail Rookie" and "high-speed rail losers." After the article was sent out, it caused great social repercussions, but always felt something more to say, because the article only sums up the phenomenon, there is no analysis of the reasons.

So, what is the reason decide who is the winner and who is the loser? We briefly review these "losers" of the rise and fall of history.

The first number of a lost belongings Zhuzhou . And Zhengzhou, Shijiazhuang, like Zhuzhou is a typical "train pull up the city." Poor iron age, Zhuzhou Beijing-Guangzhou line and the Shanghai-Kunming line of intersection, Zhengzhou is the Beijing-Guangzhou line and the Longhai line of intersection between the two famous, known as "the north of Zhengzhou, Zhuzhou south" of the story. Because the hub of the railway, Zhuzhou has also become a very important train and subway train production base, once fame.

After entering the era of high-speed rail, Zhengzhou Zhuzhou apparently not so good treatment. Zhengzhou Longhai line continues the glorious, is still an important node in road and bridge passages, but the Shanghai-Kunming high-speed channel change has not gone away and the provincial capital of Changsha, Zhuzhou, which makes the hub Zhuzhou plummeted.

Xiangtang (affiliated with Nanchang County) Zhuzhou somewhat similar situation, it was the Beijing-Kowloon Railway and Shanghai-Kunming Railway intersection, but after entering the era of high-speed rail, high-speed Shanghai-Kunming channel does not change to go to the pond provincial capital Nanchang, the xiangtang hub also plummeted.

Liuzhou is often a very agitated and "losers." In the history of a very long period of time, Liuzhou is a veteran railway hub in Southwest China, Guizhou-Guangxi Railway, Xiang-Gui railway, Jiaozuo-Liuzhou railway intersection here three trunk. Prominent hub, not only to Liuzhou become a well-known industrial city, but also to get a Liuzhou Railway Bureau organ, which is the only one not located in the capital city of the Railway Bureau. We are familiar with today Vanke head Pharaoh, his father had a job in Railways.

However, after the reform and opening up, Jiaozuo-Liuzhou Railway general decline in industrial city, Liuzhou hub is no longer so bright, Liuzhou Railway Bureau also relocated in 2007 to the provincial capital Nanning, renamed Nanning Railway Bureau, the only one not located in railway Bureau, the provincial capital of the past.

After entering the era of high-speed rail, Liuzhou hub is plummeting, Guiguang high-speed rail from the north of Liuzhou , Guilin roaring, South Takatetsu then straight south of Liuzhou, Nanning, Liuzhou sandwiched between two lines, described as "vain before village, after vain shop ", and called South Corridor north-south direction, did not choose to enter the Guangxi Liuzhou railway tradition portal. In contrast, general iron age very marginalized Guilin, become the intersection of channel and call the South Portland wide channel, Nanning is to become the call south, Guangxi wide, including three sea Route intersection.

Another frequently mentioned by people "losers" is Luoyang . Poor iron age, it is Longhai line with Jiaoliu line of intersection, Zhengzhou. But after entering the era of high-speed railway, the east-west Longhai railway line was promoted to the high bridge channel, but Jiaoliu line north-south were abandoned in favor of the call in the South Passage Way Zhengzhou, Luoyang lose a trunk north-south direction, the provincial capital of Zhengzhou Jingguang is obtained with two north-south trunk call south.

Our readers also highlighted Baoji . Poor iron age, the Longhai Railway and Baoji Baocheng - Chengdu-Kunming railway intersection in Xi'an, Shaanxi province is second only to the second largest railway hub, Shaanxi, Sichuan north portal is a transit land of Sichuan, Gansu . But after entering the era of high-speed rail, Jing Kun railway to Chengdu and Xi'an in direct communication, blue-Canton Railway communication directly from Lanzhou and Chengdu, Baoji do not need to pass. Hub Baoji plummeted.

There Dazhou. In Cape iron age, Dazhou, Chengdu, Chongqing, north of the River must pass through, but in the high-speed rail era, the necessary land into Chongqing's Wanzhou (along the river channel, called South Corridor, Cheng Yu-high-speed rail) intersection. I can guess, when two provinces of Sichuan and Chongqing high-speed rail competition for resources, prevailed municipality of Chongqing, Chengdu, Sichuan only ability to protect the status of other cities are both too busy.

Another may be less obvious "losers" is in Xiamen . Poor iron age, Fujian factors as location occupies a corner of the complex terrain and Taiwan relations, the status of the national railway hubs has been a marginal role, the two major cities of Fuzhou and Xiamen have no trunk around the country, it can be described as the radius eighty-two. Enter the high-speed rail era, Xiamen and Fuzhou appear in the distribution of high-speed rail a resource gap, Beijing, Hong Kong and Taiwan (the main line to the Beijing-Kowloon) channels are pulled from Hefei and Nanchang two branches access Fuzhou, rather than in more affluent Xiazhang Springs area.

In contrast, Xiamen Xia Yu access channel, its gold content than the Beijing-Hong Kong and Taiwan channel is much lower. There are, in theory, the access channel from Taiwan Fuzhou access rather than access from Xiamen.

I write to you, I believe we will soon reach a conclusion: the high-speed rail competition for resources, non-capital city is not simply rival capital cities, municipalities common identity nor opponent. However, if this phenomenon merely as the victory of the executive power, in fact, is not comprehensive. In addition to power, in fact, there are some quite complex technical and economic factors.

For example, Zhuzhou and xiangtang lost, and can not simply be understood as the capital city of the "bully." This is from the Zhejiang-Jiangxi (Shanghai-Kunming Railway rudiment) Speaking of history, the railway was built in the early 20th century, xiangtang Zhuzhou almost in a straight line with the Zhejiang-Jiangxi railway, the construction of these two places is the most economical choice . Also, if you take Nanchang (Jiangxi Cross River) and Changsha (cross Xiangjiang), it involves building bridges technology is more complicated. More importantly, the railway built at the time of the introduction of private capital also in Zhejiang, private capital costs must be preoccupied.

Visible, Nanchang and Changsha two provincial towns in that there was no access to Shanghai-Kunming Railway, in fact, is limited by economic and technological conditions. Today, these two are not the problem, the greater access to the Shanghai-Kunming high-speed rail traffic, the economy is more developed provincial capital, of course, it is the proper meaning. Moreover, Zhuzhou and Changsha have been integrated, Nanchang County Nanchang xiangtang belongs is hosting area.

Baoji loss and Zhuzhou has a similar logic, into the era of high-speed rail technology and money is not a problem, the economy is more developed, can be directly connected to a larger population size between the capital city, why else pass a prefecture-level city?

Another example Liuzhou and Luoyang loss, in addition to competition, there is a more important reason may be the provincial capital, that is, Jiaozuo-Liuzhou Railway with the decline. Jiaozuo-Liuzhou railway was built in the 1970s, is a north-south Beijing-Kowloon Railway Corridor than earlier, it shows the importance of this channel along the city. In fact, the Jiaozuo-Liuzhou railway connection at the time a lot of very bright industrial cities, such as Jiaozuo, Luoyang, Nanyang, Xiangyang, Liuzhou, this line can be compared to an industrial corridor.

But after the reform and opening up, especially in the coastal areas of China's economic center of gravity began to shift after the industrial city of Jiaozuo-Liuzhou railway is gradually fading, drop-economic status, the right to bring down the discourse, which led to its weight in the national trunk network traffic heavy followed the decline. Back to Guangxi province, GGR to be connected Guiyang and Guangzhou, Nanning-Guangzhou railway to connect Nanning and Guangzhou, Liuzhou had not the year that radiant Liuzhou, but a mediocre level city , of course, become a dispensable railway node.


So, whether or Liuzhou Luoyang, which became the "losers" in the high-speed rail plan, the root cause of the decline, or economic status. Imagine if the province has in Liuzhou Shenzhen as economic status, I believe, whether it is your Canton, Canton South still call the South, can not bypass it.

Speaking of Shenzhen , in this round of high-speed rail plan, which may be the only city not been a capital city "bully" the. Entering the era of high-speed rail, direct access to the coastal path and Shenzhen-Hong Kong (Taiwan) two lines passage, the provincial capital of Guangzhou in Guangdong Province, and almost double the central pattern is formed, in which all provinces in the first case. Shenzhen rely realize the impact of the provincial capital of the hub? Or by fundamental economic strength to enhance the right to speak to bring improvement.

Overall, the plan can not be static, but to the times, it should not only reflect the will to power, to be more realistic economic development needs , which may be the biggest on the basis of which a high-speed rail planning. The lost parts of the city simply understood as the power of "bully" is at least one incomplete interpretation.

iFeng: “八纵八横”时代，中国哪些城市将被抛弃？

Debt Alarm Pulled, Risk Spreads Beyond Commodity Producers

Earlier this week I posted an article from Wind in Risk Spreading With 2.34 Trillion Debt Maturing in 2H. Wind is back with more on the topic today.

Netease: 违约风险警报拉响 “黑天鹅”向中游行业飞去！
违约风险警报拉响，“黑天鹅”正在向中游行业飞去！

The three main debt risks are steel, and non-ferrous metals (blue, red and yellow in the chart below).

Wind Information statistics show that the second half of 2016, due scale iron and steel, coal, nonferrous metals, these three serious excess capacity industries, maturing debt of nearly 700 billion yuan, a record high, increasing 30% over last year, will begin in August to reach peak maturity, there will be approximately 90 billion yuan bonds due in August, another 90.2 billion and 9.3.5 billion due in October and November respectively.

More than 40 percent of this year's maturing debt in these industries will hit in the four months from August to November.

The new focus of concern is the transportation industry, which is downstream from commodities. The tranportation sector has 650 billion yuan in debt due this year, up 30 percent from last year.

According to incomplete statistics, in 2016 the maturing transport industry debt reached 656.7 billion, far more than 456.6 billion yuan in 2015, from August to September, the industry will usher in the peak debt maturity , due for repayment more than 80 billion yuan. In 2016, the building materials industry 149.9 billion yuan bonds will mature; food and beverage industry amounted to 96.3 billion yuan, far more than in 74.4 billion in 2015; real estate sector amounted to 74.5 billion yuan, far more than 39.6 billion yuan in 2015.

SOE Reorganization Expected in 5 Industries

SASAC official further said that the next step will be the national pilot reform through mergers and acquisitions, corporate restructuring explore the central routing and integration of specific patterns, including exploring the implementation of post-restructuring business integration, the elimination of homogenization competition, and improving quality by effective practices effective, summarize how to carry out institutional, management, marketing, and cultural integration of work experience, practical synergies, and "1 + 1> 2", and explore effective practices in professional restructuring, reduce duplication of investment and in order to achieve homogenization of development; at the same time, explore effective practices within the enterprise resource integration.

One insider said the next three years, restructuring state-owned enterprises will enter the active phase-out cases will be significantly increased, equity participation, holding, merger and acquisition, will accelerate the sale of assets by integrating various forms of equity markets.

Restructuring is expected in nuclear power, aviation, shipping, military and rail.

iFeng: 央企重组方案将出台 五行业案例会明显增多

U.S. Rail Stocks vs Rail Traffic

Equities are pricing in a pick-up in activity.

Rail Traffic Tumbles in USA and PRC

Source: Railfax

BI: China's economy could be in more trouble than we think

While China’s economy was strong, rail freight volumes were soaring. For example, in 2010, when China was pump-priming its economy, rail freight volume jumped 10.8% from a year earlier. In 2011, it rose 6.9%. It had soared 44% from 2005 to 2011! But 2011 was the peak.

In 2012, volume in trillion ton-kilometers declined one notch and in 2013 stagnated. But in 2014, volume skidded 5.8%. And in 2015, volume plunged 10.5% to 3.4 billion tons, according to Caixin, citing figures from the National Railway Administration. It was the largest annual decline ever booked in China.

...Then came the first quarter of 2016.

Rail freight volume plunged 9.4% year-over-year to 788 million tons, according to data from China Railway Corporation, cited today by the People’s Daily.

PBoC Research Chief: High Speed Rail for GDP

iFeng: 央行姚余栋：研究表明中国可重新把高速铁路网修一遍

After two years of real estate down, a slight rebound after bottoming out. The probability of bottoming becomes negative growth is relatively small. Stabilize the real estate once other natural stabilized, fixed infrastructure was maintained at 20%. Research shows that Chinese infrastructure can also be re-repair the high-speed rail network again, can be done completely integrated railway hub, China is now the railway density is not enough.

Earlier in the week he said the renminbi may appreciate.

Caixin: 【后危机时期经济增长和金融发展研讨会】姚余栋：人民币可能升值

　"As the global liquidity shortages, the dominant currency appreciation of RMB in fact is a strong currency, the renminbi world economy much-needed liquidity make the yuan might appreciate."

U.S. and Canda Coal Shipments Falling

Railfax: Baseline commodities are least sensitive to the economic cycle mainly coal but also grain and food products.

Western Railroad Discussion > Railroad traffic downturn

Chinese High Speed Rail Nobles and Lowlies

Some interesting data comparing the cost to construct per KM, price per KM, average speed and value for money of various high speed rail lines. In some cases there is high cost and high speed (Beijing to Shanghai).

From Nandu: 中国高铁“贵贱”图谱