China's Trains Are Better Than America's, and That's a Good Thing

While America is slowly working to get its high-speed rail system under way, China is moving full-speed-ahead with its own: According to The New York Times, 42 high-speed lines either recently opened or are set to open in China within the next two years. As analysts draw comparisons between the two countries' rail efforts, the U.S. seems to be falling behind, with a program that is slower, more diffuse, and taking longer to develop. But these shortcomings may actually reflect America's most valuable resource: a political and economic system that is better developed and more responsive to the needs of its people.Where Will It Go?

One of the big problems facing America's rail program is the issue of private property. Most of Amtrak's trains share tracks with freight trains, keeping speeds down. To develop a true high-speed rail system in the U.S., it will be necessary to lay down dedicated tracks, which means that the companies and quasi-governmental partnerships constructing the rail lines will either have to buy the necessary property at the sellers' prices or claim eminent domain and pay what the government decides is fair market value. Both methods are sure to result in angry homeowners, endless meetings and a lot of taxpayers' money going into property buyouts.

In autocratic China, centralized government planning shortcuts the messy business of democracy. When residents of Tsoi Yuen, a village that stands in the path of the proposed Guangzhou railroad, recently met with planners for a "consultation," they were offered a choice: Accept money to move or don't accept money to move. Either way, the train was going through their town.

Who Will Build It?

Having gained control of the necessary land, the next step will be finding the people to construct the lines. Recession in the Western economies has put millions of laborers on the market, enabling the $32 billion Beijing-to-Shanghai line to employ an amazing 130,000 workers. In America, the cost of this kind of labor would be staggering, but China's artificially-controlled currency keeps its base worker salary at roughly $176 per month, or slightly more than $1 per hour. By comparison, the average wage for an entry-level construction worker in America is $13.71, which translates into more than $2,300 per month. In other words, China can hire more that 13 workers for the same price that the U.S. spends on one -- or more than 130,000 for the cost of 10,000 in the U.S.

Cheap labor was key to the construction of America's first transcontinental line. The portion that ran from Sacramento, Calif., to Ogden, Utah, was built with the help of roughly 10,000 Chinese laborers who worked for roughly $25 to $30 per month, up to 30% less than wages for comparably skilled native employees. The other portion, which ran from Ogden to Council Bluffs, Iowa, was built by European immigrants, recently discharged Civil War soldiers and, in the area near Salt Lake, eager Mormon workers.

This vast pool of unskilled labor, combined with a lack of concern for worker safety, enabled the U.S. to build a transcontinental rail line in only six years. But the workplace safety standards of the 19th century -- or of much of contemporary China -- would appall contemporary Americans. For that matter, today's American workforce is infinitely better educated and more broadly employable than their 19th-century counterparts, and our modern construction techniques are machine and education-intensive, which maximizes the effect of a limited and expensive labor force. While a labor effort of China's magnitude would be impossible in the U.S., it would also be largely unnecessary.

And Who Will Ride It?

Another key difference between China and America's high-speed rail initiatives lies with the systems' potential consumers. While rail is the dominant form of transportation in much of China, in the U.S., it has to compete with airplanes and cars. Lacking the speed of planes and the convenience of automobiles, high-speed rail's selling point will have to be ticket price. In the past, however, this has brought rail into conflict with buses, which have far lower overhead.

In China, a piecemeal transportation infrastructure means that there are few travel options in many areas; consequently, the railroad can almost name its price. The basic, heavily-subsidized fare for the 664-mile trip from Guangzhou to Wuhan is $20.50; using the 13.5-to-1 salary conversion, this translates into a comparable American price of roughly $276 for a one-way ticket. By comparison, the high-speed train ticket is $72, which equates to almost $1,000 in comparable American cost, placing high-speed rail far out of the range of the average Chinese worker.

But China Railway's profitability also works a little differently on this project. The country's high-speed rail is functioning as a massive Keynesian project, juicing the Chinese economy by pouring billions of dollars into the workforce. In this context, even if China's new rail lines never break even, they will be successful simply by virtue of their ability to employ hundreds of thousands of workers. Beyond this, they will also open up commerce to under-served areas of the country, offering a continuing benefit as less-developed areas become potential sites for industrial development.

In a larger context, it's also worth noting that China's political and economic system gives its rail system leeway that isn't available in America. As a state-run company, China Railways doesn't have to impress shareholders with a profit, and the country's central planners don't have to answer to voters.

As America's high-speed rail projects get ponderously under way, critics will inevitably point to the various delays and perceived shortcomings as evidence that the U.S. is on the skids, that it is being overtaken by China, or that it lacks sufficient political will. Yet these failings reflect a political system that is more responsive to its people, more concerned with individual rights and more developed than China's. In other words, while America's political and economic system may be less efficient than China's, it is also more mature -- and more preferable.
Read Full Story
  • DJI25628.90-623.30-2.37%
  • NIKKEI 22520710.9182.910.40%
    Hang Seng26179.33130.630.50%
  • USD (PER EUR)1.110.00000.00%
    USD (PER CHF)1.030.00000.00%
    JPY (PER USD)105.390.00000.00%
    GBP (PER USD)1.230.00000.00%