China’s High-Speed Rail, the world’s longest high-speed railway network, is now losing $24 million per day with a reported debt of $1.8 trillion

[FairAndUnbiased]

The liquidity flowed into the real estate market leading to massive inflation in property prices, and as result China has one of the most unaffordable housing in the world. The average Chinese are funding these large development expenditures not though direct taxes, but through high property prices which allow the government to collect revenue from land sales. It's the HK model.

actually Chinese property cooled after 2008. China's property is comparable to EU and ASEAN prices outside the top tier cities (not Beijing/Shanghai/Shenzhen/HK/Guangzhou).

 

[Mista]

actually Chinese property cooled after 2008. China's property is comparable to EU and ASEAN prices outside the top tier cities (not Beijing/Shanghai/Shenzhen/HK/Guangzhou).

 

[JSCh]

https://twitter.com/x/status/1362792810169139203

 

[BoggedDown]

For comparison Americans spend equal amount of 1.8 trillion dollars in Afghanistan with nothing to show for it. At least Chinese go their high speed rail. That's why people say Americans are idiots of the coming centuries and tale tall sign of a declining empire.

 

[beijingwalker]

It has been around 10 years since China's first HSR, we all can see what HSR brought to China's development. Only fools just look at HSR themselves for profits.

 

[HalfMoon]

All HSR projects resulted in a debt of 5.28 trillion CNY (852 billion US dollars) to the Ministry of transportation. I don't know where the author got the $1.8 trillion data.

852 Billion is National debt. The remaining is state/province debt.

 

[FuturePAF]

In China their government subsidizes railways, in the US its highways and airports. (Highways $47 Billion in 2019; $128 million a day)

during the pandemic the airports got tens of billions.

Redirect Notice

A Statement to the Congress on the Long-Term Solvency of the Highway Trust Fund

The opening statement of Joseph Kile, CBO’s Director of Microeconomic Analysis, on the long-term solvency of the Highway Trust Fund before the Senate Committee on Environment and Public Works.

www.cbo.gov

Most high speed rail around the world doesn’t make money, only Tokyo-Osaka and Paris-Lyon are the two profitable routes.

For the Chinese they seem to be willing to bare the expense as part of their socio-economic strategy.

 

[Shotgunner51]

China’s national debt

No, it's RMB 24.050835 trillion (roughly US$ 3.77 trillion or 22% of GDP)
2020年和2021年中央财政国债余额情况表 (mof.gov.cn)

National debt is always issued by the Central Government, just like in US's case it's issued by Federal Government (T-bills). It's western media's trick to deliberately confuse readers by adding regional government debts in China's picture, do they add state/municipal debts to Federal Debt when talking about US? Why they never try adding Michigan State debt and such to Federal debt and call it "US debt"?

Moreover, 99% of China National Debt are bought by domestic investors, how about US?

The fake stream media are cooking stories for consumption of low IQ financially illiterate China haters back in their home, while their own country's debt hole is sinking into oblivion, we can sit back and enjoy their circlejerk show.

 

[Chhatrapati]

Public transports mostly run on loss. It's not really about huge profits but convenience of the public

 

[Shotgunner51]

In China their government subsidizes railways

No longer the case since spinoff in 2013, now railway is a business entirely run by a company called China State Railway Group Company, Ltd. (CR). Early subsidies are capitalized as investment by central government, making the company another typical SOE.

http://www.china-railway.com.cn/english/

Just like most businesses, CR's asset building (measured in trillions) is financed by commercial banks, or selling bonds to public/institutional investors. It's managed like any business, keep the books balanced and of course being profitable is good, while its main role is serving as a tool for central government to uplift regional economies.

 

[CAPRICORN-88]

Even if it is true, it is not a big deal.

Chinese government can afford to just write it off.

Are these high speed train Imported?
AFAIK they are all domestic technologies and production.

But the more important question in here is: Why are Western media suddenly spinning such stories?

Out of jealousy or another collapsed theory?

Has the HSR suspended their services, sack their staff, stopped their expansion projects, etc? If no. Why not?

 

[FuturePAF]

No longer the case since spinoff in 2013, now railway is a business entirely run by a company called China State Railway Group Company, Ltd. (CR). Early subsidies are capitalized as investment by central government, making the company another typical SOE.

http://www.china-railway.com.cn/english/

Just like most businesses, CR's asset building (measured in trillions) is financed by commercial banks, or selling bonds to public/institutional investors. It's managed like any business, keep the books balanced and of course being profitable is good, while its main role is serving as a tool for central government to uplift regional economies.

You maybe right for the lines already built; transferred over and expected to cover their operating costs, but are private banks financing the 8x8 expansion of the High speed network by 2035? If these lines are not profitable, will they have to sell for an unprofitable price, like Evergrande?

What does China State Railway Group Company, Ltd. (CR) as an SOE, do if it runs into operating losses?

 

[lcloo]

I see people are still believing the BS on China State Railway Group Company, Ltd. (CR) making billions of losses on their high speed train.

Latest Financial Statement
NET PROFIT for the financial period ended 30th September 2021 : RMB 332 million
Public Listed share last quoted : RMB5.34 per share (Stock no. 001213)

There was a big reduction in revenue for 2020 due to COVID-19, but the HSR operation is back to near 2019 level in 2021, but that happened to every passenger transportation companies, either airlines or trains.

中铁特货(001213)财报_深度财务报表分析 - 富途牛牛 (futunn.com)

 

[GS Zhou]

Stupid thread. If no HSR (high speed rail), the money paid to US/EU for the purchasing of Airbus/Boeing planes will be significantly higher than today. This is the TRUE LOSS to China.

 

[Shotgunner51]

like Evergrande?

Nothing like Evergrande, which operates in a fully competitive market sector (selling houses), and is a privately owned/controlled company (by a wannabe cartel guy called Xu Jiayin) with tiny market cap. Xu Jiayin can prosper or bankrupt, no one else care. The story is fake stream media's new plot to entertain low IQ financially illiterate China haters back in their home, another circlejerk show.

BREAKING NEWS: China's Evergrande has officially defaulted

Evergrande makes the third payment at the last hour avoiding a default. They are far from out of the woods, they have principal payments on US$3.5 billion dollar denominated bonds due in the first quarter of next year. But their real problem is the US$91 billion in trade payables and wages...

defence.pk

You maybe right for the lines already built

It apply to all assets: Built, Work-in-progress, Planned. All financed or to-be financed by commercial banks or selling bonds.

There are about 130 SOE under central government, most are profitable including CR, some are not. The profits/losses are managed by their common "boss", SASAC (State-Owned Assets Supervision and Administration Committee). Their "boss" has many tools to deal with SOE operating losses IF that happen e.g. liquidating non-performing assets, M&A/restructuring, fiscal subsidy, debt-equity swap, and others.

国务院国有资产监督管理委员会 (sasac.gov.cn)