The rate at which China’s extensive express network has been built is staggering. In 2008, around 1,000 kilometers of track had been laid, where over 10,000 kilometers of new high-speed lines had been added subsequently in less than five years. As of 2021, China continues to invest and develop its network further. The central government has announced the plan to increase the total length of high-speed lines to some 70,000 kilometers by 2035. The vision is to provide all large towns with access to the rail network and additionally to connect all large cities with a population over 500,000 people to the high-speed network. As a competitive alternative to road and air transportation, high-speed railways have been received by Chinese citizens positively as a means to travel. In 2018, around 1.4 trillion passenger-kilometers were traveled on China’s entire rail network, some 680 billion of which were achieved on express lines. Due to the fact that the high-speed passenger volume is growing at a much faster rate than the ordinary rail passenger volume, by connecting growing economic centers, demand for express service is expected to help with the recovery of China’s post-COVID railway passenger transport volume.
One of the key issues surrounding China’s rapid transportation project lies in its financial sustainability, as the high-speed rail has been primarily built on debt. The China State Railway Group (China Railway), formally known as China Railway Corporation (CRC), is a state-owned enterprise overseeing the management and safety of almost all public railway networks in China. Despite a rather steady operating profit in recent years, China Railway has reported a rapidly growing amount of total liabilities since 2017, which raised concern for many, given the ambitious plan of the government to further expand the costly high-speed rail network in the next few years.
In terms of earning potential, there is a huge disparity between the profitability of these express rail routes. This is not an issue unique to China; generally, high-speed rail only runs profits over certain distances and when connecting large enough population centres. In the case of China, lines on the populated east coast, such as the Beijing-Shanghai line, are rather profitable because of the high demand and shorter distances. Meanwhile for services into the continent, however, are considerably less profitable. The Lanzhou–Xinjiang high-speed railway, for example, is over 1,770 kilometers long, connecting large but distant cities. The line is expensive to maintain due to the geography of the region but remained in operation largely in order to keep China’s Xinjiang region connected to the rest of the country. Out of the 15 faster 350 kilometers per hour high-speed train lines, only five could actually cover all costs, while the slower counterparts could not pay for the principal and interest, with some even struggle to break even.