Expats love to rant about how wonderful China’s infrastructure is – reliable wireless in cities, extensive subway systems, and incredible cell phone reception – many of us are particularly fond of the rail system. The high speed segments in particular are quite nice. These aren’t free, however, as this article indicates that Minsheng Bank analysts concluded that the Railway Ministry currently has Rmb1tr in liabilities (representing an assets to debt ratio of over 55%). Last year the servicing cost was approximately Rmb40bn; which incidentally is enough to build the oft-discussed maglev between Hangzhou and Shanghai (cementing the former’s status as just another one of Puxi’s suburbs).

When the ultra-high speed was opened between Shanghai and Nanjing had its inaugural opening, the Railway Bureau shut down the high speed trains on the same route, so that people had to take the slightly faster (and significantly more expensive) option. Locals indicated that this was a face saving maneuver. Tickets on the newer, faster trains are seen as expensive in general, and its a hot button social issue (particularly since those it affects most – migrants – are in the least capable position to shoulder price increases).

The answer of course is that 8% growth will soak up all of the current costs of infrastructure development (at least until this is finished). While this particular bit of Sinocentric-doctrine is rarely called into question, it would be interesting to examine more information on costs and projected revenues. Given that national GDP is somewhere between USD5-9tr (depending on your preferred methods of measuring exchange), this is a very significant number. HT IS.