Category: China

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In response to growth, Chinese cities choose metros

» With rail rapid transit construction in virtually every major Chinese city, the country is betting on an urban future focused on transit.

Faced with limited political will for increased infrastructure funding, the debate over transportation planning in the United States has become increasingly dominated by an austerity-driven understanding of how to respond to growth. Unwilling or unable to develop ambitious plans for the future, many cities and their public officials have contented themselves with doing more with less.

Doing more with less is a strange maxim for an incredibly wealthy—and still growing—nation. Nevertheless, it is a pathology that has so altered many American planners’ sense of the acceptable that the mere idea of a master plan of significant investment attracts little more than dismissive scoffs. With blasé planners and uninterested politicians, “doing more” is readily transformed into actually doing very little.

Undoubtedly the overwhelming problems that infect that very core of the American planning apparatus—excessive reliance on consultants, acceptance of rapidly growing costs, failure to adapt to new technologies, compulsive regression to benefits for small groups over for the common interest—have encouraged this approach to understanding what is possible. And there are some cities (Los Angeles and Seattle come to mind most quickly) where these issues seem less acute.

But it is perhaps only in the act of comparison that the illness of American planning is made apparent. For in examining how one place acts in the context of another we can see whether the malignant cancer to which it has become resigned is, in fact, a factor of unavoidable shared inheritance, or if, rather, it is the consequence of its own poor choices that others have not made.

Evidence, indeed, suggests that there are choices when it comes to planning, that it is possible to have more, not less. I point to Chinese cities, which over the past ten years have acted to seize the reigns of transport planning through aggressive investment.

Having been reliant on bicycle transportation for much of the 20th century, Chinese cities were models of unmotorized mobility. But the country’s opening to capitalism in the 1990s brought massive motorization and the purchase of millions of automobiles. Millions of rural inhabitants streamed into urban cores. Many of the cities were woefully unprepared to respond to the sudden changes that ensued; until 1995, only one Chinese city—Beijing*—had any metro line, by which I mean fully grade-separated rapid transit.

What has occurred since then, however, has truly altered the way people use transportation in Chinese cities, and the changes will keep on coming.

Metro construction in these cities has exploded, rising exponentially especially since 2008. A country largely bereft of metros in the 1990s now has more than 5,000 kilometers of metro lines, more than four times the U.S. figure, which has increased very slowly since the 1960s. 25 Chinese cities now have systems, and the number is rising every year.

Of the 12 largest metro networks in the world by length, seven are now in China. As of December 2017, Guangzhou’s metro passed New York’s Subway in length, and Beijing and Shanghai have by far the longest systems.

Some estimates suggest that Chinese cities will have more than 10,000 kilometers of metro lines by 2020. That’s in addition to the almost 1,000 kilometers of bus rapid transit, hundreds of kilometers of tramways, and massive commuter rail systems that have been built in cities around the country—not to mention the enormous high-speed rail network that has been constructed since 2007.

This investment in metro capacity has been met by a popular shift in how people get around. Current Chinese metro lines collectively carry about twice as many riders as the entire American public transportation network, buses, trains, and all.

The “riding habit”—the frequency of transit use per capita—has risen quickly in city after city. Guangzhou and Beijing now have greater use of their systems than any American city except for New York, with the average resident there taking 189 and 167 rides per year, respectively, compared to 230 per year in Gotham. Beijing and Shanghai systems now each carry more than ten million daily riders, the two highest figures in the world. And they have both doubled their ridership since 2010. It seems likely that the other cities following their path in line construction will eventually follow their lead in ridership, too.

Metro construction in China is largely the product of a massive central government investment. Between 2010 and 2015, the nation spent the equivalent of $189 billion on such lines, and between 2016 and 2020, it is expected to spend between $262 and $308 billion more. The U.S. government dedicates about $2.3 billion per year in total for all transit projects, so less than one-fifteenth of the Chinese investment.

The story of Chinese investment in metro systems might be chalked up to processes of urbanization that were familiar, too, to U.S. cities in the early 1900s. It is easy to forget that American residents of major cities were the most reliant on transit in the world at the time, and that before the Great Depression, efforts to build subways and elevated rapid transit were widespread (if ineffective).

Yet actions in Chinese cities today are examples of contemporary planning, not simply responses to a particular historical moment that all cities eventually go through. The unabashed commitment to investment in rapid transit in city after city through support from the national government is an effort that never had its equal in the U.S. The growth in metro systems is being conducted in response to, not before, the increase in automobile dependence. Line construction is being undertaken in parallel with massive creation of dense new neighborhoods, a legacy whose hysteresis will produce generations of transit riders.

While Chinese cities have frequently been poor models of urbanism—massive highways, malls, and tower-in-the-park apartment blocks have taken root in too many places—they appear to be at least minimally cognizant of the reality that a future of unlimited automobile growth is unsustainable. Unlike any American city, for example, cities from Harbin to Shanghai to Shenzhen have implemented caps on vehicle registration and are examining congestion fees. Thus the growth in metro construction is being implemented in line with restrictions on overuse of cars.

The feats of Chinese infrastructure development are often dismissed by Western critics as the unrealizable actions of an authoritarian, illiberal country with no property rights, a poor citizenry, too-dense neighborhoods, and sheer government power. Its actions, then, are supposedly not meaningful for the deeply democratic American context.

Yet this is too much of a gross exaggeration of what is actually happening in China. While it is true that the country is authoritarian, land cannot simply “be taken” with no response from residents. Incomes have increased dramatically many of the larger cities, creating a middle class of individuals ready to contest projects they don’t like. Investment isn’t cheap; Chinese metros, while not as pricey as American ones, aren’t much cheaper to build than their European counterparts. And the residential areas that have been created around metro stations are intentionally dense, the product of a decision to be dense, not the product of poverty.

The difference between U.S. and Chinese approaches to planning for growth through transportation, then, really gets down to this question: are cities prepared to make the commitment to change, or not? American cities have largely abandoned the effort, hoping and praying that they may eventually wean people out of their cars through such under-supported devices as commuter incentives and tactical urbanism. Chinese cities, aided by massive central investment, are building a new society for themselves.

Data on Chinese metro expansion available here.

* Hong Kong has had extensive rail services throughout the twentieth century, and its metro, beginning in the 1970s, was quite popular, but it was a British protectorate until 1997.

Image at top: Guangzhou Metro, from Flickr user Enzo Jiang (cc).

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China Metro Rail

Profitable or Not, China Doubles Down on Investments in New Metro Systems

» Central government approves 25 new rail projects in cities across the country, worth hundreds of billions of dollars of new construction.

With China’s growth slowing — a product of internal economic changes as well as the continued poor performance of the U.S. and Europe — the country’s government has decided to accelerate investments in its cities’ rapid transit networks as part of a larger transportation infrastructure program. About $127 billion (or 800 billion yuan) is to be directed over the next three to eight years to build 25 subways and elevated rail lines as a stimulus whose major benefit will be a increase in mobility for the rapidly urbanizing nation.

Though China’s high-speed rail network (now the largest in the world) has garnered most of the headlines when it comes to transportation there, the nation’s investments in urban rail have been just as dramatic and serve far more people on a daily basis. Its three largest metropolitan areas — Guangzhou, Shanghai, and Beijing — feature the world’s fourth, fifth, and sixth most-used transit systems, providing more than five million rides each daily, more than similar networks in New York or Paris. Most of these cities’ lines opened since 2000.

The high ridership of the lines that have been built thus far, however, have not brought operational profitability to these systems, as Stephen Smith highlighted in an article this week. On Shanghai’s very extensive system, just one of eleven lines are able to cover their operations and maintenance costs — let alone pay back initial capital expenses used to build the lines. Meanwhile, construction costs have increased and cities paying for their completion have had to scale back their ambitions.

Yet the government does not accept the premise that a transit network that requires subsidies is necessarily a problem, at least based on its willingness this month to extend advance (and therefore heavily subsidized) loans to municipalities building transit lines. In general, the new national aid, which comes in the form of very reduced borrowing costs, will allow for the fast-tracking of projects already in the pipeline, much as Los Angeles has hoped to do with its transit projects. On average, 42% of financing will be directed from local governments, with the rest financed by banks, all benefiting from the lower bond rates. Costs will be eventually covered through long-term tax revenue.

In addition to funding for Shanghai and Guangzhou to extend their networks, other cities such as Xiamen, Taiyuan, Shijiazhuang, and Lanzhou have been offered national aid. By 2020, China will have 40 cities with metros extending 7,000 route kilometers, more than five times what exists in the United States today. The map below shows where new lines are being constructed, some with and some without help from the central government.

Chinese metro rail system development. Updated 11 September 2012.

Is the Chinese investment in metros “worth” it? Unlike other countries, China has chosen to de-prioritize cheaper tramway or bus rapid transit systems (though certain BRTs, such as Guangzhou’s, have been very popular), despite the fact that the cost of building subways there has risen to almost the level experienced in developed countries. On the other hand, China’s cities are often larger and denser than their Western counterparts; of the cities planning to build metros, all have more than a million people in their respective regions and most more than three million. Munich, Germany, a city with a very extensive and well-used rapid transit system (and one that most Westerners would not question), only has about 2.6 million people in its metropolitan area.

Does the fact that new Chinese metro systems require operational subsidies pose a problem? It depends on your perspective. From a fiscal point of view, long-term operational aid will impose heavy burdens on local taxpayers, just as is true in U.S. and European cities. This is especially a problem because Chinese cities have intentionally set fares at very low levels (just 2 yuan a ride in Beijing), making it impossible to cover costs. Should China, with relatively low labor costs,* be in this situation?

It seems more likely that Chinese officials recognize that the metro investments, in addition to offering an important economic stimulus, provide positive externalities that outweigh the subsidies that will be required to maintain the systems. By setting fares low, the metro lines are able to attract higher ridership and passengers from across the income spectrum. Even in the densest, most-packed city centers, metro systems allow largely congestion-free mobility that is able to handle far more people and provide faster service than equivalent tramway or BRT programs. There is a reason these projects have proven so popular among China’s citizens. The transportation benefits they offer certainly contribute to economic growth in the center of the cities they serve and likely limit the suburbanization of jobs.

In combination with efforts in cities like Shanghai to restrict automobile use through license plate restrictions, spending on new metros will encourage a huge percentage of the population to remain public transit users, rather than switch to private cars even as incomes increase. Developing countries that have invested less in their rapid transit networks (Bangkok’s 35 miles of lines serving a metropolitan area of 12 million inhabitants comes to mind) have failed their populations by offering them little alternative to automobile use and thus encouraged pollution and road congestion — two problems that already plague China’s cities.

Of course, China’s investment in new transit has not meant a shutdown on road capacity projects. The National Development and Reform Commission (which also approved the metro plans) announced last week that a large amount of funding will also be directed to new highways, leading to the eventual construction of 1,254 miles of new roads.

* On the other hand, the country’s per capita growth has been sensational; it is rapidly adopting the norms of wealthier countries.

Image above: Shanghai’s Line 3 Metro at Caoxi Road, from Flickr user Augapfel (cc)

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In China’s High-Speed Successes, a Glimpse of American Difficulties

» With political figures failing to account for the long-term interests of their constituents, the U.S. continues down its confused path.

The opening of the new $32.5 billion Beijing-Shanghai high-speed rail link this week marked a significant milestone in the world effort to improve intercity rail systems. Though the development of fast train networks in China has not been without its failings, the connection of the nation’s two largest metropolitan regions — the tenth and nineteenth-largest in the world — is a human achievement of almost unparalleled proportions, especially since it was completed a year earlier than originally planned and just three years after construction began. It comes as the Chinese government celebrates its 90th anniversary.

With ninety daily trains traveling the 819-mile link at average speeds of up to 165 mph, the corridor will likely soon become the most-used high-speed intercity rail connection in the world. Because of safety concerns, the quickest journey between travel endpoints will take 4h48, more than the four hours originally proposed. But that will still be more than twice as fast as the existing trip by train and about as quick as the air trip when including check-in times and the journey to and from the airport. So from the perspective of intercity mobility, the rail link will be a huge improvement. The fact that trains stop in the major cities of Tianjin, Jinan, Xuzhou, Bengu, and Nanjing (among many others) — and that they free up capacity on the older line for freight use — only improves matters.

China is in a stage of its economic progress that makes great works such as this high-speed system more feasible than similar works in more developed countries like the United States. While the comparison between the Beijing-Shanghai link and the New York-Chicago connection is hard not to make — each would serve resident populations of about sixty million along corridors of roughly 1,000 miles — their respective political contexts differentiate them to such a degree that makes them almost impossible to compare.

Some Americans may dismiss the Chinese achievement, suggesting that the system’s construction by a single-party government with authoritarian tendencies makes it in itself suspect. One of the great things about the American political system is that it attempts to respond to the demands of the citizenry. The defeat of several Democratic governors in last fall’s elections reflected on some degree of disenchantment with the Democratic Party in general, but in three cases — Florida, Ohio, and Wisconsin — the GOP’s open opposition to intercity rail projects there clearly played a role in convincing voters, who evidently agreed with the anti-rail sentiment, to throw out Democrats. In some ways, it is a reflection on a successful democracy that the rail projects in those places were cancelled, whatever their technical merit.

Yet the completion of China’s longest high-speed line should raise questions in the minds of Americans about whether our particular political and economic system is most fit to compete in a rapidly changing global economy.

The United States, celebrating its own 235th anniversary, has in many ways yet to escape the doldrums of the recession. But unlike China, whose government moved forward quickly to invest in its economy in response to investor insecurity, the U.S. has been characterized by a pile-up of political figures grounding their schizophrenic decision-making in paranoia over the role of government and a general distaste for definitive action on anything.

This week’s endorsement of the Central Florida SunRail commuter train project by Governor Rick Scott (R) was a reflection of American democracy at its worse. Having complained of budget deficits and scorned off federal intercity rail funds for a fast train to link Tampa and Orlando that would have likely cost the state no money, Mr. Scott has given his go-ahead to a project whose primary beneficiary will be CSX, the freight rail operator, and whose costs to the state will run up the tab into the hundreds of millions of dollars — with few public benefits. The SunRail service will operate every 30 minutes at peak hours and every two hours during the middle of the day, at least at the beginning of operations. Future operations improvements lack funding.

The commuter line’s first phase was approved by the Federal Transit Administration in 2009 for New Starts funding because of years of influential lobbying by similarly debt-obsessed Congressman John Mica (R) despite considerable objections from the U.S. government over its cost effectiveness; it was arguably the most expensive per rider of any project approved that year. The project will serve an estimated 4,300 riders a day at a final cost of $1.2 billion, $432 million of which will be handed directly over to CSX for the purchase of its line.* This amounts to a state subsidy for a private corporation, in direct contrast to the high-speed rail line, which was attracting offers of hundreds of millions of dollars from private groups that saw operating profits on the horizon.

This in a country where even the head of the supposedly progressive party claims, just like the Republican opposition, that the best way to soothe the country’s economic woes is to reduce government spending. And meanwhile, expensive projects with only a minor impact on mobility or accessibility somehow make their way forward. Ideological consistency appears not to be an American strongpoint.

Americans cannot raise their hands in dispair, brushing off the successes of Chinese dictatorship as simply the consequence of a lack of democracy. The U.S. political system’s failures to adapt to contemporary needs are no fault of democratic practice.

Indeed, China was not alone in moving forward with fast train systems last week. The French railroads authority approved the first phase of the Sud Europe Atlantique high-speed line, which will run 190 miles from Tours to Bordeaux and decrease travel times from Paris to Bordeaux from three hours to 2h05 in 2017. The program is the largest public-private partnership ever signed in Europe and will cost a total of $11.3 billion, half of which will be covered by a group of private firms expected to pay off their initial capital expenses with fifty years of operating profits. In case the point was not clear, France is a perfectly democratic place; the project underwent ten years of studies before being approved for funding, including a significant round of public forums on the scheme. The program was approved by a succession of political leaders who were elected to their posts.

Thus it is not democracy in itself that makes it difficult to envision projects similar to the Beijing-Shanghai line being completed in the U.S., but rather our particular brand of democracy. Its short political term lengths, reliance on two center to center-right political parties, overwhelming involvement of lobbying groups in the legislative process, strong state governance, and weak local and state revenue production capabilities too often result in indecision, half-hearted solutions, and reckless governing logic that focuses on short-term wins more than long-term considerations. In many ways, it’s the opposite of the Chinese governance system, where most decisions are factored into a multi-decade conception for the country’s future by state master planners who seem to know what they’re doing. Do we?

What is the appropriate response to this problem? We can speculate away, but what is obvious is that American political support for specific investments in projects such as commuter trains or high-speed rail lines is haphazard at best and dangerously wasteful at worst. This is no way to run a country.

* The funds will allow SunRail to use the corridor during the day, but CSX will still be able to run freight trains on the corridor at night, potentially making maintenance of the line more difficult. This includes a completely out of proportion $200 million insurance policy that the state is paying to CSX to use the tracks. In addition, the funds provide tens millions of dollars to CSX to upgrade an adjacent line.

Image above: Shanghai Hongqiao station, from Flickr user triplefivechina (cc)

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Finance Hong Kong Metro Rail

Hong Kong’s Expanding Metro a Model of Development-Funded Transit

» New extensions in central Hong Kong will be mostly funded by development around future stations.

As one of the densest places on earth, it is no surprise that Hong Kong is a transit city, with over 90% of journeys made by public transportation. This concentration ensures high ridership on the city’s extensive MTR metro system. Yet it also increases the cost of line expansions, since building new projects in places that are already packed with people necessitates the creation of tunnels and requires expensive environmental and social remediation.

Hong Kong, however, is going about constructing new projects at a steady pace. At the end of last month, the MTR transit agency approved the construction of the 4.3-mile South Island Line, which will provide service to Aberdeen and other sections of the south side of Hong Kong Island. In addition, the agency will complete a 1.6-mile extension of the Kwun Tong Line to Whampoa. Both will open for operations by 2015, with ground breaking scheduled for next year. The city already has a 2-mile metro extension to the West Island under construction.

All this is being built in the context of relatively high construction prices: The Kwun Tong Line is being constructed at a total cost of HK$5.6 billion, or roughly US$450 million per mile. Though that’s less expensive than what a similar project would cost in New York City, where the Second Avenue Subway is being built for more than $2 billion a mile, it’s on par with most other Western cities building new subways, unsurprising considering Hong Kong’s wealth. So what is this city’s secret? How is it able to continue building new metro expansions — and plan for more — when other cities are being forced to postpone their transit projects due to the recession and the resulting government cutbacks?

The answer is that the MTR, in association with the local government, has become one of the city’s major property developers. It has used profits from those new housing, commercial, and retail schemes to pay for part of the cost of constructing new subway lines. Along the urban rail lines, the MTR has funded dozens of new housing projects with 300 to 7,000 apartments each. The operations of the subway are entirely unsubsidized by the local government.

This approach — called “Rail+Property” by the MTR — does not involve the city simply handing over development land to the transit agency at no costs (land in Hong Kong is all owned by the government, though it is leased out to private individuals and corporations for long-term periods). Rather, it is expected to pay the government the land costs estimated based on a no-rail scenario. Thus the MTR is not forced to deal with the problems many agencies face when they use eminent domain to take land, such as escalating values in anticipation of the new transit service. Rather, it is rewarded for the added value it will produce once its new transportation project is completed.

For the South Island Line, the government has agreed to provide MTR development rights to a site at the former Wong Chuk Hang estate. In turn, the transit agency expects the government to pay for less than half of metro construction costs. The rest of the tab will be picked up by the
MTR. This process, which directly associates transit operator with transit-oriented developer, makes the financing and construction of new underground transportation links far more simple than the typical approach, which requires governments to use public tax funds to pay for most of the cost of transit projects. The latter funding mechanism, common in the U.S. and Europe, is politically difficult and financially troublesome, especially in times of increasing budget deficits.

Of course, the MTR is not alone in using this method to assume some of the costs of construction. In Paris, the government’s grand plans for a network of 96 miles of new lines, costing more than €20 billion, would be partially paid for by the creation of development districts around each station whose own existence is only possible thanks to the creation of the transit line. This is a reasonable way to fund a transit line, as it is paid for by the benefits it produces. In a typical U.S. city, the transit agency provides a significant boost to local property values when it invests in a new rail project and yet it is able to capture very little of that extra wealth created — and when it does, only indirectly through tax revenue increases. This slows down the development of many cities.

One of the difficulties in proposing a similar finance method in the U.S. is that there is a residual fear of letting the public sector (or even the only partially public sector, in the case of MTR) engage in land development. The memories of urban renewal and public housing remain fresh enough on the minds of enough Americans to dissuade them from wanting to repeat the process today. Thus the closest we’re able to get is a financing method like that being used for New York’s 7 Subway extension. There, the city has created what is essentially a tax-increment financing district in the area to be served by the line, and it will use those tax revenues to pay back the initial costs of the project.

Yet this indirect approach, which does not allow the transit agency to reap the full benefits of the value increase it has sowed, leaves too much room for massive developer profits and too little room for actually funding new transit lines. It is worth considering whether it would be worthwhile to allow a transit agency to engage directly in the creation of new developments around the stations it has built. If properly managed, such a system could result in better transportation for all and less of a constraint on the public purse.

I should note that Hong Kong may be a unique case. At the aerial map at the top of this article shows, it is hemmed in from all sides by natural features — the ocean, mountains, and parks — that force all new development to be quite dense. Similarly, most housing and commercial activities are stuck in the relatively narrow strip of land between the ocean and the mountains. That density and linear concentration removes space for potential transportation infrastructure and limits the amount of walking necessary for anyone who lives along a transit line that follows the rough line of urban landscape; this makes transit work better here than most place. All together, you have conditions almost ideal for transit-oriented development. You can’t just transpose the Hong Kong model on any place.*

* This paragraph was added after the initial publishing of this article.

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Argentina China High-Speed Rail Metro Rail

China Agrees to Major Investments in Argentina’s Rail and Metro Lines

» $10 billion spending spree will improve transit in Cordoba and improve branch railway lines. China expects to improve trade relations and open access to natural resources.

Expanding its effort to use infrastructure investments to spread its influence, the Chinese government has agreed to a $10 billion commitment to upgrade a series of intercity rail lines in Argentina and improve urban transit systems in Buenos Aires and Cordoba. Funds come from the China Development Bank and will require a 15% match from the Argentinian government.

This money will not contribute to to the construction of the Buenos Aires-Rosario high-speed line, a separate and currently delayed project.

The effort suggests not only that China is willing and able to contribute its national funds to foreign projects, but also that it intends to structure its investments as an alternative to the World Bank, a grant-making institution that since World War II has sponsored infrastructure in underdeveloped countries with the general aim of spreading Western economic interests. China announced in March that it was planning to invest in a series of transcontinental high-speed rail lines throughout Asia and Europe; in addition, the Eastern superpower has been upping its spending in Africa far above the engagement of any other country. China clearly hopes that new infrastructure abroad will help speed goods to its rapidly expanding domestic market and encourage the expansion of its own international business.

Thanks to talks between Presidents Cristina Fernández de Kirchner and Hu Jintao, Argentina will receive $4.35 billion to renovate three freight railroad lines, including $1.85 billion to improve conditions on the Belgrano Line, which links the country to Bolivia and is an important link for the nation’s agricultural producers. China undoubtedly wants to expand its access to Argentina’s productive farmland, and rail transport is significantly cheaper than road movements.

But China has also agreed to more than four billion dollars for the improvement of the Buenos Aires Subway and the creation of a four-corridor Metro in Cordoba — projects that provide no clear economic benefit to the latter country. This suggests that Argentina has agreed to giving China preferential trade treatment above and beyond the improved access to the country’s agricultural resources.

China, of course, does not have infinite resources so it won’t be able to promise similar spending in every country around the world. That said, its own extensive investment in its high-speed rail and urban rapid transit suggests that similar American projects could potentially find funding in Chinese hands. If U.S. companies aren’t able to provide adequate private sector support for construction programs, and if neither the federal government nor states themselves are able to develop infrastructure banks to advance such funding, foreign aid could be a realistic possibility.

This could be seen as a significant let-down for Americans used to thinking that we should be able to fund our infrastructure using our own funds. But the opportunity for expanded global trade could be an excellent opportunity for improvements in the U.S.; there’s no reason to be worried about direct investment from abroad if it makes possible the construction of resources that we couldn’t otherwise build.

Image above: Cordoba, Argentina, from Flickr user Javier de Cordoba