Obama, China, and the Sputnik Moment

You can't compare China and the U.S. when it comes to high-speed rail

In his State of the Union address, President Barack Obama urged Americans and Congress to embrace this generation's Sputnik moment and spend more on technology and innovation to spur economic growth.

America is losing its edge to nations like China, Obama suggested, because we have failed to commit to a long-term vision to be competitive in this digital age. "China is building faster trains and newer airports," the president said. "Meanwhile, when our own engineers graded our nation's infrastructure, they gave us a 'D.'"

"Within 25 years, our goal is to give 80% of Americans access to high-speed rail, which could allow you go places in half the time it takes to travel by car," said President Obama. "For some trips, it will be faster than flying—without the pat-down."

The president's comments raise an important question: How relevant are China's investments in infrastructure to the challenges of U.S. economic competitiveness? Unfortunately, if China's commitment to high-speed rail is a benchmark for the kind of commitment President Obama believes the U.S. must make to remain competitive, we may be learning the wrong lessons.

First, China's transportation spending is very specific to its circumstances and its investment in high-speed rail should not be seen as independent of its need to develop a comprehensive transportation network. China eclipsed Japan last year to become the world's second largest economy, but this achievement is not as significant as it might appear. While the amusement park glitz of the Bund in Shanghai and the skylines of Beijing, Guangzhou, and other cities are suitably impressive, they represent a nation in transition from poverty to middle-income status.

China's per capita income (adjusted for purchasing power) still ranks 93rd worldwide according to the International Monetary Fund. China's economic development is about the same level as the United States was back in the 1920s. And China's Gross Domestic Product per person is only about 16 percent of that of the U.S.

While Beijing's massive traffic nightmares occasionally get coverage in the Western press, urban Chinese workers typically commute and get around by walking, riding bicycles, or via very slow buses. The challenge for China is building a transportation system and network that provides mobility for workers and freight so that it can continue to support its economic growth within some of the world's largest and most densely packed cities.

Despite our own urban traffic woes, the United States has a mature transportation system that provides the world's best and most affordable mobility. China is really playing catch up, investing in all forms of transportation to match its unprecedented growth in the demand for mobility.

In the last 20 years, China has built a national expressway network larger than the one that connects the European Union and almost the equivalent of the U.S. Interstate Highway System to improve access between provinces and metropolitan areas.

Also, despite its investment in high-speed rail, air travel in China is expanding rapidly. In 2009, 166 airports were open to civilian transportation. This number is expected to increase to 260 by 2015. But, again, this is still substantially less than the 569 airports certified for scheduled service around America.

In the U.S. rail advocates envision the trains replacing cars and planes. Meanwhile, China's investment in rail is not seen purely as a substitute for other means of traveling between cities and provinces, although it is forcing the domestic travel industry to focus on improved service along shorter air routes to stay competitive.

China's developing transportation network is diversifying, becoming more layered, and taking advantage of the sheer scale of a national economy expected to add 400 million more people to its cities by 2025. High-speed rail is best seen as just one component of the larger national transportation network being built, not the backbone of the entire system.

Indeed, only about 10 percent of the 91,000 kilometers of intercity rail track are dedicated to high-speed rail. If anything, China is "rightsizing" its transportation network to reflect its burgeoning economy and the extraordinary foot print of its cities, five of which are "megacities" with populations over 10 million (Shanghai, Beijing, Guangzhou, Shenzen, and Dongguan).

This leads to the second reason why China is fundamentally different than America: economic geography.

A key factor in ensuring high-speed rail's success is the closeness of employment and population centers. The largest Chinese cities aren't nearly as spread out as U.S. cities in terms of distance and the high speed rail lines are connecting larger urban cities.

China has 120 cities with populations of one million or more, and its cities are expected to add the equivalent of another United States—300 million people—by 2025. The high-speed rail line will connect to most cities with populations greater than 500,000. Given existing levels of very low mobility and income, rail would be a natural beneficiary of rising travel demand as the travel market matures.

For example, high-speed rail connects the city of Wuhan (population 5.3 million) with Guangzhou (population 13.2 million) along a 601 mile rail line, a shorter distance than New York to Chicago. The Wuhan-Guangzhou high-speed trains, averaging 194 miles per hour, will get travelers from these two cities in three hours, less than one-third the time it took traveling by conventional train. As an overlay to the existing conventional rail system, 90 percent of the Chinese population will be accessible to rail.

But this underestimates the real connectivity implied in this rail service. Even the shorter high-speed rail links are connecting major clusters of urban activity. A proposed train connecting Beijing in the northeast with Guangzhou in the southeast would travel nearly 1,200 miles. This single train line would connect a region of 14 million (Beijing) to a combined urbanized area of nearly 100 million (Guangdong province and Hong Kong). Put another way, this one high-speed rail line connects cities and provinces in China equal to almost half the entire U.S. population. The combined population of Beijing, Tianjin, Shanghai, Hong Kong, and their neighboring provinces exceeds the national population of the United States.

Finally, China is at a very different point in its economic development than the U.S. and other Western nations. The U.S. no longer has either a culture of rail travel or a network of rail lines that knit its regions together. More importantly, creating this network is highly unlikely to make much of a dent in transportation mode splits.

The reason is fairly straightforward: higher incomes allow everyday American travelers to choose travel modes that maximize flexibility and speed. Rail is a fixed route transit system, less flexible and slow compared to the more ubiquitous air travel. As major airlines have exponentially increased connectivity with cities of all sizes and locations, competition has also reduced the relative cost of air travel to the point most households can get to their long-distance destinations faster and cheaper via air (or intercity bus).

In 2008, U.S. airplanes logged 583 billion passenger miles. The entire Amtrak system accounted for just 6 billion passenger miles. Even if high-speed rail were to double the number of riders, its market share would be paltry compared to air travel. Thus, the prospects for high-speed rail to compete effectively for a meaningful level of travelers in the U.S., unlike China, is fundamentally limited, a conclusion implied in the massive ongoing subsidies required to simply keep the U.S. train systems operating once they are built.

With nearly 10,000 miles of high-speed rail track ready to open by 2015, China boasts the world's fastest passenger trains, reaching speeds of 220 miles per hour. Chinese companies are competing to provide similar services in the U.S. as some rail proponents look on with envy.

Nevertheless, it's important for policymakers to carefully consider these commitments in a Chinese context and ask how these circumstances may differ from the United States. Our geography, transportation infrastructure legacy, and economic history undermine the factors that are likely to make high-speed rail a success in America.

Sam Staley is the Robert W. Galvin Fellow and director of urban growth and land use policy at Reason Foundation. He is co-author of the book Mobility First: A New Vision for Transportation in a Globally Competitive 21st Century (Rowman & Littlefield, 2008).