China's Trillion-Dollar Bet on High-Speed Rail Transformation

China's high-speed rail network, which has tripled to nearly 30,000 miles under President Xi Jinping's leadership, faces mounting financial challenges amid aggressive expansion plans. China State Railway Group, the national operator, has accumulated nearly $1 trillion in debt and liabilities, requiring $25 billion annually for debt service.

Despite this, plans call for adding 15,000 more miles by 2035. While flagship routes between major cities like Beijing and Shanghai remain profitable, newer lines into rural regions are struggling with low ridership. In Sichuan province's Fushun County, which received high-speed rail service in 2021, stations built for thousands sit largely empty despite having 12 high-speed rail stops within a 40-mile radius.

The expansion has become a symbol of China's technological advancement but raises concerns about economic viability. Ticket prices are maintained at about one-quarter of global averages to ensure public access, limiting profit potential. The railway operator turned a modest $460 million profit in 2023, aided by government subsidies, after three years of losses during the pandemic.

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