Chinese railway © martinkadu/ Public domain/ Pixabay
In the last decades, as the global economic and commercial weight of China has grown, economic and trade relations have become crucial components of Chinese foreign policy, creating a form of economic diplomacy. In this regard, China under President Xi Jinping has rebranded the previous ‘going out’ policy, which aimed to encourage its enterprises to invest overseas, with the new name of ‘One Belt, One Road’ (OBOR) program. OBOR, later renamed as Belt and Road Initiative (BRI), is the global investment development strategy launched by the Chinese government in 2013 to expand the national ties with over 70 countries. BRI is part of Beijing’s grand plan to win diplomatic allies across the globe by funding and building infrastructure. The change in the strategy’s name has been accompanied by a policy shift from an attention on securing natural resources to fuel China’s heavy industry and export-driven economy to an emphasis on projects that help China ascend the value chain. The High-Speed Railway (HSR) diplomacy, known as 高铁外交 (gāotiě wàijiāo) in Mandarin, exemplifies the type of projects that BRI seeks to promote (Zhou, 2016).
The domestic HSR system in China
HSR diplomacy describes the mechanisms by which China’s expanding rail capabilities are being used in the country’s foreign relations. China has the longest HSR network in the world, with a total length of 37,900 km as of 2020 and an announced plan to extend it to 70,000 km by 2035 (Chu, 2021). The development of HSR has fostered economic growth in China by driving the industry’s development, but it has also quickly become a bottleneck to economic growth. The 2004 ‘Medium-to-Long-Term Railway Network Development Plan,’ based on technology transfers from abroad, relaunched the sector. In 2010, China debuted with the first entirely Chinese-designed high-speed train – the China Railway High-Speed (CRH) 380A, which reached a speed of 380 kilometres per hour at a time when the fastest trains operating in Japan and Europe ran at about 320 kilometres per hour (Shirouzu, 2010).
Following this success, China slowed down its rail development programme in 2011 after an accident near the city of Wenzhou caused 40 deaths. The investigations revealed high-level corruption at the Ministry of Railways, unleashing public outrage (Evan, 2012). Despite this setback, the HRS was not abandoned, with fixed-asset investments in railways growing 3.1 percent a year during the first 11 months of 2012, reaching $81.1 billion, according to Ministry of Railways data (Xinhua, 2012). However, it was not until President Xi Jinping came to power in 2013 that the large investment in rail development would make a strong comeback (Barret, 2014).
HSR and OBOR
President Xi Jinping has made HSR exports a top priority, turning it into one of China’s most successful large-scale infrastructure initiatives that connects BRI countries and promotes economic exchanges (Belt and Road Forum for International Cooperation, 2017). Premier Li Keqiang, one of HSR’s main proponents, predicted that railway technology would become China’s “golden business card” (Kynge, Peel, Bland, 2017). In 2014, China completed its first overseas HSR project in Turkey, the Ankara-Istanbul HSR, which remains up to this day the only Chinese HSR project successfully completed outside China.
As Beijing looks at rail exports as a tool for absorbing the country’s massive industrial overcapacity (Dragan, Kratz, 2016), the “Made in China 2025” plan, which aims to transform the manufacturing industry of the country, has identified modern rail transport equipment as a priority factor. Moreover, HSR is considered an element that can add value to China’s manufacturing abroad, in line with Beijing’s efforts to export sophisticated technology and reshape its economy. In addition, China’s commitment to invest in infrastructure projects throughout BRI countries is a promising opportunity for national rail companies to expand abroad. Chinese HSR companies have a strong advantage in competing with foreign companies abroad since their overseas investments are backed by the Chinese government, which allows them to provide low-interest loans to recipient countries. Furthermore, Chinese rail companies are strongly subsidised and have access to low-interest credit from national banks (Cory, 2021).
Is China’s HSR diplomacy effective?
Even though overseas railway projects led by Chinese companies have increased in recent years, their type is generally conventional rather than high-speed (Garlick, 2017). The reasons why Chinese HSR diplomacy is not giving the expected results are many. To start with, HSR projects are extremely expensive, and many countries are reluctant to dive into debt to fund them. African countries have seen a proliferation of conventional railway projects, such as the Tanzania-Zambia Railway (TAZARA) inaugurated in 1975, and the Standard-Gauge Railway (SGR) which links Kenya’s port city of Mombasa to its capital Nairobi, which celebrated 1,500 days of safe operation in July 2021 (Xinhua, 2021).
Outside of Africa, Chinese railway construction projects have not seen such rapid growth. In Europe, for example, lack of transparency has been the main issue for the limited amount of Chinese projects. For example, the construction of the Belgrade to Budapest railway was delayed in 2016 following investigations by the European Union into whether the award of the contract abided by EU regulations and standards. In 2016, the EU opened an infringement procedure against Hungary asking for more transparency (Brînză, 2020).
In some other countries, the reasons escape the control of Chinese officials. Such has been the case with the 414 kilometres HSR line linking the Chinese province of Yunnan with Singapore announced in 2015. The section connecting Yunnan with the Laos capital of Vientiane is now almost complete and expected to be operational in 2022. However, the full completion of the line remains uncertain at least for the moment after Singapore and Malaysia were unable to reach an agreement over the changes proposed by the latter resulting in the termination of the contract for the HSR link between Kuala Lumpur and Singapore (Zainuddin, 2021). For other countries, such as Pakistan, instability and security threats are considerable obstacles to investments and funding for HSR projects.
Overall, the expectations for China’s grand vision remain all talk and no action. There is little doubt that the HSR initiative might help China achieve its geopolitical and economic goals. However, even though several projects keep being launched, the pace of setbacks is increasing faster, and tangible results are few.
Noemi Capelli is currently pursuing a master’s degree in Forecasting Innovation and Change at the University of Bologna. She holds a master’s degree in China’s Politics and Economics at Shanghai Jiao Tong and a bachelor’s degree in Asian and African Languages and Cultures at the University of Torino. She is the co-founder of Chinaly, a daily press review of Chinese newspapers. You can find her on Instagram and on LinkedIn.
The opinions expressed here are those of the writers and do not represent the views of European Guanxi.
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