China's Big Bet on Rail Transportation

(MoneyWatch)  Could a strong train network in China blossom quickly enough to keep up with growth? A Newsweek article titled "The Shrinking of China" argues that China's rail investments mirror America's building of the highway system in the 1960's.

A number of new rail links will soon compare favorably with air travel in both trip time and price. And if they're truly convenient, they could send China on a different path from the car culture that has made the U.S. entirely dependent on oil (although dependency is a matter of degree, and China is already on the way to addiction sans interstates).

Newsweek hints at another theory: that China could rocket beyond its already huge growth rates if only it were connected with a strong rail network. From the article:

Beijing's campaign to promote development across regions--like the Yangtse River Delta around Shanghai, or the Pearl River Delta from Guangzhou to Hong Kong--gets a huge boost from the fact that it will soon be possible to traverse these regions in minutes...

[The investment] could put Beijing's policy of opening up the west in high gear... the initiative has been hampered by slow and expensive transport connections and the unwillingness of qualified talent to work in remote western regions. The fast-train links may help reduce all of these problems. The ancient capital of Xian has struggled to attract cutting-edge industries to its isolated location, 1,200 kilometers and 10 hours by train from Beijing, but soon that ride will fall to just four hours.

Some might scoff at the idea of rail supplanting cars; forecasts have by and large assumed that China will allow, even encourage the growth of the automobile. Given the massive distances involved, it seems almost impossible to move a majority of the country's citizens and freight by rail.

In fact, car culture in the country has already started. This year, the Chinese car industry overtook the United States in sales, and the U.S. Department of Energy estimates that China will have at least 125 million vehicles by 2020.

The problem with this is that China's oil demand already threatens to squeeze the entire world economy; production rates probably can't rise enough to accommodate millions more drivers. The Chinese government is well aware of this fact.

Chances are good that the Chinese car industry, and its oil consumption, will continue to grow. But it sounds like there's a "Plan B" in the works to make China the first rail-centric superpower.