The funding of hierarchical railway development in China

Abstract

Transport networks are hierarchal in essence. In this paper, we explore the relationship between the financing structure and the hierarchal evolution of railway network development, using the case of China. Although privatization and corporatization in transport provision have been trends in some parts of the world, the national government is still the main body responsible for railway development in many countries. Among these countries, China and India are the only two that include the Ministry of Railways (MOR). In India, the entire country's railways are clearly defined as public services provided and managed by the MOR. In China, railways have been corporatized; yet, the MOR and the National Railway Corporation are still widely regarded as a single body that has monopolistic power over almost all railway systems at the national and regional levels in both infrastructure development and operation.We argue that when multi-level railway networks are evolved from a single-level (national) network due to market growth in countries such as China, where different levels of government are responsible for infrastructure planning and development, the state’s monopolistic control of operation and its corresponding financing structure may not fit the operation of new multi-level networks. However, the suitable institutional set-up for the new networks may be delayed or never established for many reasons, some of which, as demonstrated in this paper, are place-specific and path-dependent. The case study of Chinese railway systems in comparison with the situations of other Asian countries (i.e. India and Japan) will shed some light on a better understanding of various financing models and development paths of multi-level transport.