Subject: An unlikely saviour: China invests in America's high-speed rail | The Economist
From: "Eric Schwerin" <[email-masked]>
To: "Hunter Biden" <[email-masked]>, "Joan Mayer" <[email-masked]>
Date: Wed, 23 Sep 2015 21:17:12 -0400

An unlikely saviour: China invests in America's high-speed rail | The
Economist

http://www.economist.com/blogs/gulliver/2015/09/unlikely-saviour

China invests in America's high-speed rail An unlikely saviour

Sep 23rd 2015, 14:40 by A.W. | WASHINGTON, DC

XI JINPING, China’s president (pictured left), is visiting America this
week. He has brought plenty of baggage: the controversy surrounding the
manipulation of China’s struggling economy, alleged cyberattacks on
American government and businesses, and aggressive construction in
contested parts of the South China Sea that has infuriated American allies.
One Chinese observer told
<http://www.nytimes.com/2015/09/22/world/asia/chinas-xi-jinping-arriving-in-us-at-a-moment-of-vulnerability.html?hp&action=click&pgtype=Homepage&module=first-column-region&region=top-news&WT.nav=top-news&_r=0>
the *New York Times*, “Xi is obsessed with strategic rivalry with the
United States.”

But in one important area, that obsession seems to be working to America’s
benefit. Last week brought news of a big Chinese investment in what could
become the first high-speed rail line in America. Construction on a
230-mile line between Los Angeles and Las Vegas will begin as early as next
autumn, announced
<http://www.bloomberg.com/news/articles/2015-09-17/china-u-s-reach-agreement-on-high-speed-rail-before-xi-visit>
a Chinese Communist Party official. China Railway International USA, a
consortium led by China’s national railroad, will provide
<http://www.latimes.com/local/lanow/la-me-ln-vegas-la-chinese-high-speed-rail-20150917-story.html>
an initial capital investment of $100m for the line, which will first run
from Las Vegas to the town of Victorville, about 80 miles from Los Angeles,
and which officials hope will later connect to the city’s downtown.

High-speed rail has many advocates in America. But the country that once
thrived on its transcontinental railways has fallen hopelessly behind
Europe and Asia following years of disinvestment and closures. The trouble
is that the government has demonstrated a stubborn unwillingness to bring
the network into the 21st—or even mid-20th—century. In his 2011 State of
the Union address, President Obama proclaimed: “Within 25 years, our goal
is to give 80% of Americans access to high-speed rail.” But Republican
governors of three states slated for big rail projects cancelled those
plans and returned the money to the federal government. Jeff Denham, the
chairman of the House of Representatives subcommittee in charge of
railroads said last year: “High-speed rail can be a good idea; I just think
it should be left up to the private sector.” Even states that stand to
benefit most from such investment seem ambivalent. Kevin McCarthy, the
House Majority Leader, who represents perpetually congested California, told
<http://www.wsj.com/articles/california-plans-bullet-train-without-more-u-s-aid-1407107839>
the *Wall Street Journal*: "I will do all that I can to ensure not one
dollar of federal funding goes to boondoggles like California's high-speed
rail."

Enter China. After XpressWest, the firm which had led the Los Angeles-Las
Vegas rail project, couldn’t secure a federal loan to build the line, China
Railway International USA stepped in. The pair have now set up a joint
venture. “It definitely speaks to the fact that our government is dragging
their feet,” says Andy Kunz, head of the US High Speed Rail Association.

Mr Kunz is happy to take the money where he can get it. And the American
economy will benefit from improved transportation infrastructure,
regardless of funding source. Commuters, too, will appreciate the
convenience of an 80-minute train ride from Victorville to Las Vegas,
considering the drive can take up to four hours
<http://www.latimes.com/local/lanow/la-me-ln-vegas-la-chinese-high-speed-rail-20150917-story.html>.
Still, American industry is missing out. No one thinks the investment in
the rail line will be a big money spinner for China Railway International
USA. “Transportation isn’t supposed to make money,” says Mr Kunz. Instead,
China is taking a strategic step to boost its own industry. After investing
in more miles of new high-speed rail than any other country in the world
<http://www.washingtonpost.com/wp-srv/world/highspeedrail.html?tid=grpromo>,
it has developed the engineering know-how to build tracks and trains—which
it now hopes to export to overseas markets. The United States is one of more
than 20 countries
<http://www.telegraph.co.uk/sponsored/china-watch/technology/11540416/chinas-high-speed-rail-network.html>
where China aims to build a market for its rail industry.

Right-wing critics in America have long charged that government funding of
public transit is akin to socialism. They can’t be much happier to see the
funding for a big American rail line coming from—in name, at least—a
communist government.
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Eric D. Schwerin
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