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High-Speed Rail Diplomacy

China's High-Speed Rail Diplomacy

Gao Bai, an ethnic Chinese professor of sociology at Duke University, argues that China's "blue-water strategy" has come to an end. Gao contends that a land/sea hybrid project provides freedom of strategic action: if a problem arises on the maritime front, China can develop westward with the integration of Eurasian economies. Or if difficulties emerged in Eurasia, China can turn eastward to the integration of Asian-Pacific economies. Gao's article goes beyond high-speed rail in itself. The strategies that he discusses are China's strategic choices for the foreseeable future. But a hegemonic power with control over Europe or East Asia - the Heartland of the Eurasian continent in the classical works Mackinder - could threaten America's leadership of the international system.

Wu Zhengyu notes that "In modern history, Napoleon's France and Hitler's Germany, on the basis of the lessons from, respectively, the failures of maritime expansion pursued by Louis XIV and Wilhelm II, turned to continental expansion, but the results were the same. The maritime consequences of a continental strategy toward Central Asia would in no way circumvent China's deepening strategic contradictions with America at sea; in fact, they might only accelerate and deepen them. America's overriding objective in East Asia in the post-Cold War era has been to prevent China's emergence as a continental and maritime power able to challenge its own superiority in the western Pacific."

China placed high-speed rail diplomacy at the heart of the Belt and Road initiative to connect Asia, Europe, the Middle East and East Africa. China’s connectivity and infrastructure investment will make it the stronger power in Asia in political and economic terms. Railway construction by Chinese companies has moved overseas in recent years, although up to now this has generally been of the conventional rather than high-speed variety. High-speed connections are hugely expensive, and so many countries, particularly those with low population densities, are reluctant to take a plunge into debt to fund them. Overall, reportedly about 50 countries have already expressed interest in Chinese high-speed railway of which more than 20 have engaged in talks about potential projects with Chinese enterprises.

China High-Speed Rail (HSR) China High-Speed Rail (HSR)

China's high-speed rail is welcomed by its neighboring developing countries, not only for its competitive cost performance ratio, but for the great impetus it gives to economic and social development. Some media even used "high-speed rail diplomacy" to describe the prosperity of China's construction of the rail network. With Chinese leaders acting as its global salesmen, HSR also acquired a “national significance” (guojia yiyi) as a symbol of China’s global industrial competitiveness.

China has been pushing for the development of a comprehensive rail network in Southeast Asia, the key area of its “Belt and Road” initiative — a huge infrastructure investment program aimed at integrating China with Asia and Europe. As part of this diplomatic strategy, China’s policy banks will play a role in filling the financing gaps for infrastructure construction in developing countries. The project in Thailand is one of them.

Due to vast investment, only three high-speed lines in the world have been shown to be profitable — Paris-Lyon in France, Tokyo-Osaka in Japan, and the Beijing–Shanghai line in China’s system. The majority still require large government subsidies. “High-speed rail can only transport people, not goods,” said Zhao Jian, an economics professor at Beijing Jiaotong University. “Profitable high-speed rail usually requires very large and stable passenger traffic.” Zhao believes that the countries for which China is planning to build high-speed rail projects mostly fall short of the population density and market needs for profitability. “They only have the need to build high-speed rail if China offers the investment,” he said.

HSR is one means of responding to China’s mounting industrial overcapacity. Large HSR projects can mobilize railway and construction SOEs, which faced a sudden and violent downturn as China’s economic growth slowed. Vladimir Ilyich Lenin, in his landmark "Imperialism, the Highest Stage of Capitalism" noted that " a definition of imperialism that will include ... the export of capital as distinguished from the export of commodities acquires exceptional importance... The possibility of exporting capital is created by the fact that a number of backward countries have already been drawn into world capitalist intercourse; main railways have either been or are being built there ... "

In Africa, China has completed conventional rail links in Angola, Algeria, Kenya and Sudan, and also between Djibouti and Addis Ababa in Ethiopia. Chinese rail companies are also working on railways in Guinea, Senegal, Nigeria, Uganda, Rwanda and South Sudan, with some of these links being cross-border.

Outside Africa, however, the progress of overseas railway construction projects has not thus far been so rapid. There is a range of factors involved, with the wariness to allow Chinese companies into domestic and regional economies being the main one.

In Europe the proposed Belgrade (Serbia) to Budapest (Hungary) link, which was to have been built by Chinese companies and potentially also extended through Skopje in Macedonia to Athens in Greece, was delayed by an EU decision to investigate the bidding process through which the tender was awarded. In essence, Brussels claimed that the award of the contract contravenes EU fair competition laws. This meant that a connection which would have enabled the relatively impoverished Balkan region to improve its integration with the rest of Europe was on hold due to European suspicions about Chinese motives and business practices. In Turkey, a high-speed connection between Ankara and Istanbul was built by Chinese rail companies. The project was completed in 2014. However, this is the only Chinese high-speed railway successfully completed outside China so far.

The project for a new high-speed link between Singapore and Kuala Lumpur in Malaysia was open to bids in 2017 and Chinese companies were involved. In Indonesia, there was intense competition between China and Japan to win contracts to build new railways. Each has won one contract to connect the capital Jakarta with outlying cities, but neither project has yet been completed.

In India, Japan was recently awarded a contract to build the nation's first high-speed rail link between Mumbai and Ahmedabad. This represents an escalation of what could unfortunately be termed Asia's high-speed rail wars. The Indian government appears to see China as a threat, and is therefore unwilling to engage either with the Belt and Road initiative or with investment from Chinese companies. It therefore remains to be seen how India will react to the proposed link between Tibet and Nepal through the Himalayas, which is now in the planning stages. This connection could continue into India, but that would depend on the trust shown by Indians, which thus far seems to be lacking.

General Electric Co. (GE) has announced the company and China's largest rail vehicle maker China South Locomotive & Rolling Stock Corporation Limited (CSR) will invest 50 million dollars in a U.S. based joint venture to make high-speed trains. "It's very good they (GE) can find a world-class partner here in China to work with. I'm sure it will benefit both companies and both countries as a result," said Bill Millar, president of the American Public Transportation Association.

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Page last modified: 26-11-2017 18:51:17 ZULU