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Cablegate: High Speed Rail Further Integrates East China

VZCZCXRO5027
RR RUEHCN RUEHVC
DE RUEHGH #0372/01 2480845
ZNR UUUUU ZZH
R 040845Z SEP 08
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 7121
INFO RUEHOO/CHINA POSTS COLLECTIVE
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 7702

UNCLAS SECTION 01 OF 03 SHANGHAI 000372

SENSITIVE
SIPDIS

STATE ALSO FOR EAP/CM, EEB/TRA
TREASURY FOR OASIA - DOHNER, HAARSAGER, CUSHMAN
TRANSPORTATION FOR BERNESTINE ALLEN/NICOLE PORTER
TRANSPORTATION FOR DAS JOEL SZABAT/DAS SUSAN MCDERMOTT
USDOC FOR ITA MAC DAS KASOFF, MELCHER

E.O. 12958: N/A
TAGS: ELTN PGOV ETRD EINV ECIN CH
SUBJECT: HIGH SPEED RAIL FURTHER INTEGRATES EAST CHINA

REF: A) SHANGHAI 18, B) SHANGHAI 19

SHANGHAI 00000372 001.2 OF 003


1. (SBU) Summary: Over the past year, East China has embarked
on a quest for further intra-regional connectivity and economic
integration through faster passenger rail transport. On July
15, Shanghai and Zhejiang Province announced plans for a new
high-speed rail link that will connect Hangzhou, the provincial
capital, with Shanghai. On August 18, the Zhejiang Provincial
Government announced it planned to commence construction of the
Shanghai-Hangzhou Magnetic Levitation (Maglev) line, which will
shorten the trip to 25 minutes. A subsequent announcement by
the Hangzhou Mayor on September 2 clarified that there is no
timetable for the Maglev extension, given the high-speed railway
between the two cities would perform similar functions, but
local governments are still committed to the project. Shanghai
is also planning to extend the current Maglev line to Shanghai's
Hongqiao Airport in time for the World Expo in 2010. Earlier in
2008, Shanghai's decision to extend the Maglev train caused a
dust-up among local residents worried about the impact of the
extension on the property values of their apartments and also on
their health (reftels). Besides these advanced technology
trains, other fast train lines are proliferating in the region.


High Speed Railway Link
-----------------------

2. (U) According to Chinese media, the Minister of Railways
plans to construct a new high-speed railway between Shanghai and
Hangzhou that will commence next year and be completed by 2013.
The 158-kilometer line is slated to link the Hangzhou Eastern
Railway Station with Shanghai's Hongqiao transport hub,
currently under construction adjacent to Hongqiao Airport. The
line will reduce traveling time to just 30 minutes (currently 1
hour and 45 minutes). The peak speed for the train will be over
300 kilometers per hour (186 miles per hour) and total
construction cost is estimated at USD 4 billion. There will be
five stops along the line: Yuhang, Tongxiang, Jiaxing,
Shanghai's Songjiang District and Fengjing Town. The
Shanghai-Hangzhou link is planned to connect to the
Shanghai-Beijing high speed railway line currently being
planned. In Hangzhou, passengers would also be able to transfer
to the Hangzhou-Ningbo railway line. Ningbo is Zhejiang
Province's largest seaport and home to 5.6 million residents.

3. (U) On July 1, 2008, construction of the high-speed railway
between Shanghai and Nanjing, capital of Jiangsu Province and
home to 7.7 million residents, also got under way. The total
length of this high-speed railway will be 300 kilometers with
the peak speed reaching 250 kilometers per hour. Total
investment on the project will be RMB 40 (USD 5.8) billion. The
Ministry of Railways will finance the project, which is
scheduled to be completed before the 2010 Shanghai World Expo.
(Shanghai officials predict attendance at the six-month 2010
Shanghai World Expo will be sixty million persons, of which
fifty million will be domestic visitors.) After the completion
of this railway, travel time between Shanghai and Nanjing will
be reduced from 2 hour and 20 minutes to 1 hour; travel time
between Shanghai to Suzhou (population 6.2 million) in eastern
Jiangsu Province will be reduced from 37 minutes to 15 minutes.
During peak times, there will be one train every 3 minutes to
facilitate the transportation between the two cities. There
will be 21 stops along the line and experts predict the
completion of this railway will benefit business in the smaller
cities along the line. The overall capacity for this railway
between Shanghai and Nanjing is estimated at 68 million people
annually.

Part of the Bigger Picture
--------------------------

4. (U) The high-speed rail project is part of a bigger plan to
link East China with Beijing. According to media reports,
construction on the Shanghai-Beijing high speed rail link began
on January 18, 2008. Upon completion in 2014, the travel time
between the Chinese capital and the nation's commercial center
will be reduced from ten hours to five. It will also double the
existing annual transport capacity to 160 million passengers.
The Beijing-Shanghai High Speed Railway will be 1,318 kilometers
(820 miles) in length, and 21 stations will be set up along the
line. The peak speed for the train will be 350 kilometers per
hour. It is also projected that during peak hours, trains will
depart every five minutes. The total cost of building this high
speed railway is estimated at USD 21 billion, China's second

SHANGHAI 00000372 002.2 OF 003


biggest project behind the Three Gorges Dam. The projected
one-way train ticket price will be between RMB 600-800 (USD
88-117). Upon completion, the Shanghai-Beijing High Speed
Railway is expected to carry 80 million passengers per year.
Currently in China, these are the only two proposed high speed
railway projects: Shanghai-Beijing and Shanghai-Hangzhou.

5. (SBU) Experts noted that the Beijing to Shanghai High-Speed
Railway will bring tremendous business opportunities to China as
well. Over 80 percent of railcars will be purchased from
domestic companies as part of China's long-term home-grown
technology plan. Experts also expect the large passenger volume
on the line to help the project breakeven within eight years.
Once the project is completed, the cities along the
Beijing-Shanghai corridor will likely attract additional
investment. According to a SinoPac Securities transportation
analyst, China's massive investment in the railway
infrastructure construction just started and will continue over
the next 10 years. To emphasize the point, he said that public
railway construction investment increased 29 percent in the
first 6 months of 2008, reaching USD 11.6 billion. This
occurred against the backdrop of a moderate increase in total
infrastructure investment by the Central Government.

Maglev Construction on the Slow Track
--------------------------------------

6. (U) On August 18, the Zhejiang Provincial Government
announced it would commence construction of the
Shanghai-Hangzhou Maglev line and would cost RMB 22 billion (USD
3.2 billion). The provincial office supervising the Maglev
project said it would finish preliminary work of site selection
and environmental evaluation this year. With the extension to
Hangzhou, the total length of the Maglev line will be
approximately 200 kilometers (124 miles), including the section
that links Shanghai's two international airports. However, on
September 2, Mayor of Hangzhou Cai Qi clarified that the there
is no timetable for the Maglev extension, given the high-speed
railway between the two cities would perform a similar function.
Mayor Cai told the media that the "The Maglev project has the
backing of the Shanghai, Hangzhou and Zhejiang governments and
is unlikely to be built in the same time frame as the high-speed
railway project, but it will definitely go ahead." The Maglev
extension through the city of Shanghai appears to be on track to
be completed before the 2010 World Expo. In early 2008, the
planned expansion touched off numerous protests by Shanghai
residents concerned about electromagnetic radiation emitted from
the Maglev and the impact of the Maglev on the property value of
their houses. City officials claim they have rerouted part of
the planned extension in response to residents' concerns.

Maglev vs. High-Speed Rail
--------------------------

7. (U) The proposed high speed railway link has a few
advantages over the Maglev. First, the high speed rail track
can easily integrate with the existing rail track, which the
Maglev is unable to do. Second, the Maglev's construction cost
is twice as much as high speed rail and operation cost is nine
fold. In order to break even, the Maglev will charge a hefty
ticket price, which is difficult for the average Chinese citizen
to bear. High speed rail is also more environmentally friendly
than the Maglev in terms of noise and radiation. Additionally,
the Maglev travel time to Hangzhou will be 25 minutes, only 5
minutes faster than the high speed rail. (Comment: Some
speculate that Zhejiang's announcement to build a Maglev railway
link to Shanghai is nothing more than an effort to save face.
The plan was one of Zhejiang's top priorities in the past and it
appears to be difficult for provincial leaders to give it up.
The Maglev extension was initially side-lined after Shanghai
Party Secretary Chen Liangyu fell from power in October 2006 and
was roundly criticized for such extravagant projects. Now that
the political crisis has passed, officials seem more willing to
pursue the Maglev project once again. End comment.)

Other Fast Trains Also Proliferating
------------------------------------

8. (U) Since April, 2007, when the Ministry of Railways
increased permitted train speeds, fast trains around East China
have blossomed. The so-called "D Train" train speed has been
increased from 160 kilometers per hour to 200 kilometers per
hour. With the new "D Train", the travel times between Shanghai

SHANGHAI 00000372 003.2 OF 003


and elsewhere within the Yangtze River Delta have dropped
significantly. For example, the travel time between Shanghai
and Nanjing was reduced to just 2 hour and 20 minutes
(previously close to 3 hours), Suzhou now only takes 37 minutes
(previously 55 minutes), and Hefei (Anhui Province) now only
takes 3 hours. (previously over 7 hours). Although the "D
Train" is fast, it is still different from the High Speed
Railway, which is based on a combination of advanced railway
technology and railcars. The "D Train" is based on locomotive
technology and uses regular track.

9. (SBU) Comment: In the past, East China, as with the rest of
China, failed to adequately develop its rail system. As a
consequence, the rail infrastructure had largely been incapable
of meeting the demands placed on it by the booming economy,
whether for moving coal for power generation, other freight or
millions of passengers daily. East China's dramatic
improvements in highway networks and aviation means the rail
system no longer occupies as central a role in the region's
transportation network, even if inadequate in that earlier role.
Now East China's passenger rail system is scrambling to catch
up. Based on media statistics, the total annual passenger
volume in the Yangtze Delta Region will reach 3.05 billion
passengers by 2010 and 5.5 billion passengers by 2020. The
area's move to boost rail connectivity will bring the railway
system back into greater relevance and diminish bottlenecks in
passenger movement. End Comment.
JARRETT

© Scoop Media

 
 
 
 
 
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