It is often observed in China that, the worse the economy, the more active the nation's railway building becomes.
A flurry of new high-speed rail (HSR) announcements, domestic and international, might suggest that policymakers are worried. Indicators like electricity, freight, steel and wholesale price deflation all invite state-directed fiscal stimulus. Building railways is a popular and prestigious tool to buoy the industrial sector. Since 2008, especially, HSR projects have become Beijing's stimulant of choice. They have also become a geopolitical tool.
Are they sensible, grandiose, or merely an expedient way to keep growth going? All of the above. China does “need” more railways, by any international comparison of GDP, land area and population. Its urbanization program demands mass rapid mobility. But urban planners question the merits of HSR. Bullet trains benefit very large metros but commutes can create empty bedroom communities in outlying cities. Last month, Japan proudly celebrated the 50th anniversary of the Shinkansen rail line, though many lament the “funnel effect” that has emptied Japan's countryside into a few urban corridors.
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