China is taking the unusual step of sharply raising user fees on four major bullet train lines, in its largest move to address rising costs and heavy debt since it broke ground on the system nearly 20 years ago.
The higher train ticket prices are part of an effort to increase prices for public services. Earlier this year, water and natural gas bills began to increase in some cities.
Public services in China are heavily subsidized by local governments. But Huge municipal debts mean these governments have less money available to keep prices low.
Bullet trains are a symbol of the country’s ability to build infrastructure, often even before there is consumer demand. But this infrastructure has been paid for with enormous loans, amounting to 870 billion dollars alone in the case of the China State Railway Group, the parastatal that operates the network.
China’s leadership is shifting the country’s growth strategy from investments in infrastructure and real estate to high-tech manufacturing and exports. But that has antagonized the United States and Europe, which worry that additional Chinese exports could cause job losses and undermine their industrial base.
China has opened 45,000 kilometers of bullet train routes since 2008. The routes connect all major cities and hundreds of smaller cities and towns. To put its size into perspective: the system is long enough to span the continental United States more than 10 times.
China’s bullet trains typically run at 299 or 349 kilometers per hour, depending on the route. Because the tracks are straight, trains travel long distances without slowing down.
But the debt incurred to build that network is not limited to China State Railway Group. Many of its lines are owned by joint ventures with provincial and municipal governments that helped pay for construction and are increasingly less able to subsidize transportation.
The rail system explained the fare increases, which take effect June 15, with a statement saying that “operating costs such as line maintenance, vehicle purchases, equipment upgrades and labor employment have undergone important changes.”
The tariff increases have generated considerable comment on social media in China. Much of this has been negative, as wages have stagnated in recent years and real estate prices have plummeted.
“Everything is going up, except salaries,” one person complained.
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