China

Chinese Cancel Treasure Island Investment as Brown Seeks High Speed Rail Funds

Wendell Cox — Mon, 15 Apr 2013 14:34:56 -0400

California's Governor Jerry Brown and an entourage of public officials and corporate executives has spent much of the last week traveling around China trying to drum up business for the state. One of his principal objectives is to entice Chinese investors to take a stake in the California high-speed rail project. From the Governor's perspective, this makes all sense in the world.

California's high-speed rail program may be the current holder of the largest projected funding deficit of any infrastructure in the world, at approximately $50 billion. (That's after shaving $30 billion off the project and losing the support of former California High Speed Rail Authority Chairman, former state Senator Quentin Kopp, who charges that the line is no longer "genuine high speed rail").

As Governor Brown concludes his trip to the Orient, word comes from The San Francisco Chronicle that "A $1.7 billion deal with China Development Corp., the Chinese national railway and Lennar Corp. to construct 12,500 homes on the former Hunters Point Naval Shipyard in San Francisco and a string of high-rises on Treasure Island has collapsed." The project was to be built over up to three decades and would have housed 20,000 people. The deal is said to have fallen apart over not allowing the Chinese investors sufficient control and "unresolved tax issues."

The now defunct deal may have been the largest serious Chinese investment proposal in California.

There are important lessons for proponents of the high-speed rail system, who sometimes fantasize about China as the bailout investor of last resort. The Chinese, like the other investors who have found better things to do with their money are not likely to be swayed by the line's excessively high cost or its modest ridership potential. Nor will the Chinese bear gifts to California.

These issues are described in detail in the new Reason Foundation Updated Due Diligence report by Joseph Vranich and me.

China Freeways: Continuing Expansion

Wendell Cox — Wed, 02 Jan 2013 15:10:23 -0500

Beijing's xinhuanet.com reported on December 30 that 11,000 kilometers (7,000 miles) of new freeways (motorways) were built in 2012. This is equivalent to more than 150 percent of the freeway mileage in California.

Based on figures reported at the end of 2011, the additional 11,000 kilometers would increase China’s national freeway system (the National Trunk Highway System) to approximately 96,000 kilometers (60,000 miles). This is approximately 20,000 kilometers (12,000 miles) longer than the US interstate highway system, as reported in 2010. As a result, China's national freeway system is the longest in the world.

Both China and the United States have additional freeway segments that are not a part of the national systems. In 2010, the United States had approximately 99,000 kilometers (62,000 miles) of freeways, including the interstate system. Data is not readily available for a number of urban and provincial level freeways in China that are not a part of the National Trunk Highway System.

It seems likely that the US continues to lead, though by only a small margin, in total freeway mileage. However, China is continuing to expand its system at a rapid rate. This is evident in the map below, which uses purple and green to indicate uncompleted freeways, while blue and red indicate open segments. Long stretches remain to be completed to Urumqi, the capital of Xinjiang, and beyond to the border of Kazakhstan in the Pamir Mountains, as well as two long routes to Lhasa, the capital of Tibet. A number of additional routes are also planned in the densely populated eastern third of the nation.

Map by WikiCommons user Pafun

Also see:
China's Expanding Roadways (February 2012)
China Expressway System to Exceed US Interstates (January 2011)

China Personal Vehicles Now More than US

Wendell Cox — Tue, 31 Jul 2012 12:17:10 -0400

China Web quotes the nation's Ministry of Public Security to the effect that China's personal vehicle fleet (automobiles and motorcycles) reached 217 million at the end of June. This would place China ahead of the United States, which had approximately 200 million personal vehicles in 2010 and led the world for perhaps for most, if not all of the last century.

China has 114 million automobiles and 103 million motorcycles, a substantially different mix than in the more affluent United States. The US has 192 million automobiles and 8 million motorcycles.

Motorcycles are particularly useful in China's growing and congested cities and are the logical stepping stone for buyers who are likely to eventually own cars. Many of the motorcycles are "E-Bikes," which use a plug-in battery operated technology. These motorcycles are so fuel efficient that their greenhouse gas (GHG) emissions per passenger kilometer approximate those of a full bus.

In 2011, China also took the lead in freeway mileage, displacing the US. The United States, with its interstate highway system had led the world in freeway mileage for at least one-half century.

China's Expanding Motorways

Wendell Cox — Wed, 22 Feb 2012 11:35:19 -0500

In some ways, it has been an "annus horribilis" for transport in China (Note). There was the tragic high-speed rail accident in Wenzhou (Zhejiang), the fastest trains were slowed, construction was slowed or, in some cases stopped, and a top railway official was removed for misappropriation of at least a billion Yuan (more than $150 million).

However, China's freeway (motorway) system has achieved a milestone even Deng Xiaoping might have dreamed. In 2011, The Beijing Review reports that China's intercity freeway system became the longest in the world, longer that of the United States, which had been the undisputed leader for at least 50 years.

China added 11,000 kilometers (7,000 miles) of freeway (grade separated and dual carriage expressway) to its national interstate expressway system (National Trunk Highway System) in 2011. With a length of 85,000 kilometers (53,000 miles), China's intercity freeway system exceeds that of the US interstate highway system by 10,000 kilometers (6,000 miles). At the end of 2008, the US interstate highway system was 75,000 miles long.

China has built 83,000 kilometers (52,000 miles) of interstate freeway in just 11 years. Much of the US interstate construction was completed over a period of 25 years, from 1956 to the early 1980s.

It is unclear whether the total length of freeways in China is greater than that in the United States. In China, many urban freeways are not included in the National Trunk Highway System. There are also non-interstate freeways in the United States. Complete data on these roadways is not available.

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Note: This characterization of a "horrible year" was made famous by Queen Elizabeth II in a major speech in 1992.

See also: China Expressway System to Exceed US Interstates, January 21, 2011.

Report: China to Suspend High Speed Rail Development

Wendell Cox — Wed, 10 Aug 2011 15:54:57 -0400

Railway Age reports that Premier Wen of China "has told the state media that the government will suspend approvals of new rail while it conducts safety checks to address concerns rising from the high speed train collision last month that killed 40 people."

The Premier also indicated that high speed rail trains should operate at slower speeds "at their earlier stage of operation." Earlier this year, the Ministry of Railways slowed all trains to a maximum speed of 300 kilometers per hour (186 miles per hour) and many trains that were to operate at that speed were slowed to 250 kilometers per hour (155 miles per hour). At the time, reports indicated that the slower speeds were to lower operating costs so that fares could be reduced. Concerns had been raised about the much higher fares on the new trains and the cancellation of many conventional trains, which had much lower fares. Railway Minister In addition, Sheng Guangzu told the press that the slower operating speeds would "offer more safety."

Photo: Suzhou to Nanjing at 300 kph (by author)

More Hyperbole on Ghost Cities in China

Wendell Cox — Tue, 28 Jun 2011 13:34:50 -0400

The so-called Chinese "Ghost Cities" have been the subject of a number of articles in recent months. There appears to be some truth in the reports, such as in the building of a near empty new city in Inner Mongolia (Ordos). There is also a good deal of hyperbole.

A recent article ran in the Business Insider, entitled "New Satellite Pictures of China's Ghost Cities," which relied principally on satellite images, some quite old. Somewhat more proximate (as on-the-ground") pictures are provided and linked in this article. They show that at least two of the Ghosts have risen from the dead (or they may never have been dead at all).

Changsha, Hunan: Changsha is the rapidly growing capital of Hunan province, adding nearly 50 percent to its urban districts between 2000 and 2010 (even greater growth than in the US growth leaders, Las Vegas and Raleigh). The Business Insider article displays a satellite image showing huge areas of construction both to the northeast and to the west of the urban area.

When planning a 2009 trip to China, I chose to visit Changsha because of the extensive construction shown in this very same satellite image. In my continuing satellite image research on urban areas, especially relating to Demographia World Urban Areas, I noted that this appeared to be the most extensive construction in the nation. A number of photographs are included inour Changsha Rental Car Tour, which were taken in September 2009.

On a rainy and quiet Sunday afternoon I took a tour of the northeast construction area and found that much of the construction had been finished. Moreover it was obvious from both the traffic and the open shopping centers and shops that this was anything but a "ghost city" (see photograph, above).

The next day I took a similar trip to the western construction area. As in the northeast, much of the construction was complete and the communities were alive.

Zhengzhou, Henan: Zhengzhou is also rapidly growing even faster than Changsha (over 60 percent in 10 years) and is the capital of Henan province. The article displays multiple satellite images of the Zhengzhou New Area. Because of a previous article in the Daily Mail, I took the opportunity on a recent trip to visit the Zhengzhou New Area and file a report. The Zhengzhou New Area is alive.

The Business Insider also indicates an unfamiliarity with Chinese geography.

Outside Jiangsu? A couple of the photographs referred to empty developments as being "outside Jiangsu," as a Westerner might describe a development as being outside Phoenix or Omaha. However Jiangsu is not an urban area or city, it is a province. Thus, to refer to a development as being outside Jiangsu is akin to referring to a development as being outside Arizona or Nebraska.

Changsha Already Twice as Large as Los Angeles? The Business Insider also advises us that Changsha is already twice as big as Los Angeles. In fact, there are no comparable geographies between Los Angeles and Changsha that could make such a statement even close to accurate. Regrettably, many writers and much of the press make comparisons between China and other nations without the remotest idea of the meaning of the geographical terms they are using. Here are a couple of ways that Los Angeles and Changsha can be compared.

1. Central municipality: The central municipality or core city of the Los Angeles area is the city of Los Angeles. It has a population of approximately 3.8 million people, but accounts for less than one third of the population of either the metropolitan area (functional area or labor market area) or the urban area (physical area or area of continuous development). Strictly speaking, there are no central municipalities in China, because the regions or prefectures are themselves municipalities. It is as if the city of Los Angeles comprised both Los Angeles and Orange counties. Chinese municipalities are divided into districts and if a comparison were to be made at the central municipality level, Changsha's central district would have to be used. This would be the district (qu) of Furong, which has a population of 500,000 people, about 1/8 that of the city of Los Angeles.

Core city comparisons are fraught with difficulties. This is illustrated by Melbourne, which had little more than 70,000 people in the last Australian census, approximately two percent of the metropolitan population. The 2010 US Census showed Melbourne, Florida to be larger.

2. Urban Area: The one level at which they valid comparison could be made is the urban area, or the area of continuous urban development. The latest data for Los Angeles (2000) indicates an urban area population of 11.7 million people. The 2010 US Census counts for the Los Angeles area suggest that the urban area total, once released will be little higher than the 2000 figure.

Based upon the 2010 census data, the next edition of Demographia World Urban Areas will estimate the Changsha urban area at approximately 3,000,000 people. Thus, by the urban area metric, Changsha has a population approximately one-quarter that of Los Angeles.

It is possible that Business Insider like others, compared the population of the central city of Los Angeles (3.8 million), which is only part of the urban area to that of the Changsha municipality (7 million), which has more than double the population of the Changsha urban area and covers at least 25 times as much land area (virtually all it rural). They are not the same thing.

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Photograph: In the northwestern Changsha "ghost city:" September 2009 (by author)

Shanghai: Torrid Population Growth

Wendell Cox — Sun, 17 Apr 2011 10:01:57 -0400

The population of the provincial level municipality of Shanghai exceeded 22 million at the end of 2010, according to the Shanghai Population and Family Planning Commission. The population of 22.21 million exceeds the 2000 population of 16.41 million by 35 percent. This growth of nearly 6 million is more people than live in all but three Western European urban areas (Paris, London and Essen-Dusseldorf).

Virtually all of the population gain was among migrant (non-permanent) residents who lack official Shanghai registration (Shanghai Hukou status). The migrant population rose from 5.9 million to 8.1 million, an increase of 153 percent (Estimates place the number of non-permanent urban residents of China as high as 200 million). There were 14.1 million permanent residents (with Shanghai Hukou status), a seven percent increase from the 2000 figure of 13.8 million (Figure).

Non-permanent residents, who must have lived in Shanghai for six months to be counted, now account for 36.4 percent of the provincial level municipality's population, nearly double the 19.4 share in 2000.

Results are expected soon from the China national census, which began in November of 2010. Ding Jinhong, director of East China Normal University's School of Social Development has suggested that the census may report a population as much as 23 million, with a non-permanent resident population of 9 million.

It is estimated that the Shanghai urban area, which is wholly contained within the provincial level municipality, will have a mid-year 2011 population of 18.7 million, with a land area of 1,125 square miles (2,900 square kilometers). The Shanghai urban area, the 10th largest in the world, has a population density of 16,500 per square mile or 6,400 per square kilometer.

This urban density is more than double that of Western European urban areas with more than 500,000, however it is less than one-fourth that of the Mumbai urban area. As in Mumbai, there has been substantial population dispersion from the core to suburban areas, with only 14 percent of growth in the urban core (generally inside the inner-ring expressway) between 1982 and 2000.

The population density of the provincial municipality, which is analogous to a metropolitan area and includes considerable rural land, is much lower, at 9,100 per square mile (3,500 per square kilometer).

A Tough Week for High Speed Rail

Wendell Cox — Fri, 15 Apr 2011 15:38:11 -0400

The week ended April 16 was particularly difficult for high speed rail, as the following events illustrate.

1. High Speed Rail Zeroed Out of US Budget: The US federal budget deal, which cut $38 billion from spending ($76 billion annualized) zeroed out the $2.5 billion 2011 budget allocation for high speed rail and $400 million of prior spending authority from President Obama's "stimulus" program, that had provided $8 billion for high speed rail in 2009. Approximately $2 billion of that authority remains and applications total $10 billion, mostly for conventional intercity rail services, rather than genuine high speed rail service.

2. Missouri Legislators Block High Speed Rail: Members of the Senate Transportation Committee in Missouri refused to place high speed rail in the annual state budget. Governor Jay Nixon is seeking more than $1 billion for intercity out of the remaining $2 billion from the original Obama Administration $8 billion program. Governor Nixon indicates that he will try to get the money placed in the budget should the US Department of Transportation award a grant. Missouri joins Florida, Wisconsin and Ohio in taking actions to block funding for high speed rail projects. This reluctance is principally the result of concerns that high speed rail will incur significant cost overruns and require operating subsidies, all of which would have to be paid for by the states, which generally face serious financial difficulties.

3. China Slows Down Trains: Safety, energy conservation and fare equity issues led the Ministry of Railways to announce a slow-down of its fastest trains to a maximum speed of 300 kilometers per hour (186 miles per hour). This could add materially to travel times, especially in the longer corridors being developed, which traverse the greatest distance of any in the world (such as Shanghai-Kunming, Shanghai-Beijing and Beijing-Hong Kong).

4. Opposition to Britain's HS2 Line Intensifies: Opposition continues to mount against Britain's HS2 line from London to Manchester and Leeds. Protesters showed up at a Department of Transport event at Northampton Station intended to obtain views on the government's plans. Lizzy Williams, chair of "Stop HS2" expressed concern that the government's "consultation" was not objective and told only one side of the story, ignoring the difficulties (A video of Ms. Williams at an anti-HS2 convention is here). Opposition groups also plan a rally on May 8. Finally, it was reported that projected time savings on the line have been exaggerated by the government.

China Slowing World's Fastest High Speed Rail

Wendell Cox — Fri, 15 Apr 2011 11:32:48 -0400

The Wall Street Journal reports that China will slow down its world's fastest high speed rail trains. According to the Journal, Sheng Guangzu, head of China's Ministry of Railways, told the People's Daily that the decision will make tickets more affordable and improve energy efficiency on the country's high-speed railways. The maximum speed will be 300 kilometers per hour (186 miles per hour), which is also the top speed for most high speed rail trains in Japan, France, Korea and Taiwan. The United Press reported that the 300 kph service would be limited to the four north-south (Beijing to Harbin, Beijing to Shanghai, Beijing to Hong Kong and Shanghai to Shenzhen) and east-west lines (Qingdao to Taiyuan, Lanzhou to Xuzhou, Shanghai to Chengdu and Shanghai to Kunming). Both sources were unclear as to whether the new speed limit would apply to the proposed 380 kph Beijing to Shanghai line, however that line is one of the four north-south trunk routes, all of which will operate at the slower speed according to the Ministry of Railways.

Currently, the world's fastest high speed rail trains operate on the Guangzhou (South Station) to Wuhan route, which reaches 350 kilometers per hour on its fastest service (which stops in Changsha, the non-stop service having been cancelled), completing the run in 3:16. This lower speed could increase travel time on the route to between 3:30 and 3:45.

The Journal cited a high-speed rail official (not Chinese) who indicated that there are safety concerns with trains running at above 320 kph. In contrast, the proposed California high speed rail line would operate at top speeds of 355 kph.

Photo: Nanjing high speed rail train, Shanghai Station (by author)

Zhengzhou Ghost City Alive!

Wendell Cox — Thu, 31 Mar 2011 00:38:30 -0400

Zhengzhou, Henan, China (March 28, 2011): In December, London’s Daily Mail reported that the Zhengzhou New Area was China’s largest “Ghost City.” A visit to the Zhengzhou New Area indicates exactly the opposite. Chinese “Ghost Cities” are large areas of new development that are virtually unoccupied. The most famous example is Ordos, a new and reportedly empty city, built to replace an older city in Inner Mongolia.

Zhenghou is an urban area of approximately 2.5 million population and is the capital of Henan province. The Zhengzhou New Area is located in the northeastern quadrant of Zhengzhou. It is circular in design, with two parallel roads, high-rise condominium buildings on the inner ring and commercial buildings on the outer ring. The interior of the circle includes the Henan Arts Center and a skyscraper that is under construction. A new high speed rail station is under construction to serve the new Guangzhou to Beijing line. The station is to be one of the largest in Asia.

Our visit revealed anything but a Ghost City. Granted, no-one would mistake the traffic for Beijing Third Ring Road volumes, but virtually all of the parking spaces were taken and there was traffic on the streets (Figure 1). That ultimate indicator of Chinese urbanization, the availability of frequent taxicab service was well in evidence. Two of the city’s bus rapid transit lines serve the interior circle road, again indicating a substantial threshold of non-ghost urbanization.

There were people on the sidewalks, though not the numbers typical of an older, more dense section of a Chinese urban area (Figure 2). It was clear from the laundry hanging in glass enclosed patios that many of the condominiums were occupied, though it is to be expected that many would not be, given the Chinese propensity to invest in multiple residential properties (a tendency the central government seeks to curb). Many of the commercial skyscrapers were occupied, and some were still under construction. There are also shopping centers, small stores and fast food restaurants.

Zhengzhou New Area is intended by the developers to become the new central business district for Zhengzhou. There is much more planned than this first phase. Eventually, the Zhengzhou New Area is intended to cover 105 square kilometers (41 square miles), generally further to the northeast. City maps already show the planned street pattern, not unlike 19th century maps of some US cities.

In short, the Zhengzhou New Area is alive and not a Ghost City. It may well be that it took longer than expected for the place to come alive. But it is clear that the life of the Zhengzhou New Area began more than four months ago.