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Fast-track competition
By Xu Wenwen |
October 28, 2010, Thursday
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Print Edition
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THE new high-speed train between Shanghai and Hangzhou will eventually integrate the cities and force Hangzhou businesses to become more competitive. Xu Wenwen buys a ticket.
The new Shanghai-Hangzhou high-speed rail train has placed Hangzhou, Shanghai and nearby cities into a more competitive market.
Departing from Shanghai's Hongqiao Railway Station or from Hangzhou Railway Station, bullet trains equipped with China's CRH380A system zoom to their destination in 45 minutes. After disembarking, it takes around 45 minutes to an hour to get to Hangzhou's West Lake or Shanghai's downtown.
"It means the integration of neighboring cities is coming," said Chen Jianjun, an expert for the comprehensive regional planning group for the Yangtze River Delta, under the National Development and Reform Commission. He is also executive director of the Academy of Regional and City Economic Development of Zhejiang University.
"Shanghai couples can take a romantic walk around West Lake in the evening after work and return home the next morning," said Chen. "Hangzhou people can easily get to Shanghai for concerts and exhibitions."
Now Hangzhou businesses, especially in the service sector, will have to compete with Shanghai businesses.
The first to be affected is Hangzhou's airport in the city's suburban Xiaoshan area.
The nonstop bus from Hangzhou Railway Station to Xiaoshan International Airport costs 20 yuan (US$3) and takes around 45 minutes; and it takes around 15 minutes by Metro to get to Shanghai's Hongqiao International Airport from Hongqiao Railway Station.
Hongqiao has more flights and some tickets for flights departing Hongqiao are cheaper than those of Xiaoshan airport.
To Xiaoshan or Hongqiao? It's an option for passengers, but a challenge for Xiaoshan airport. Similar competition will extend to other sectors, especially high-end business. More options will benefit citizens as Hangzhou businesses will have to improve the quality of service to meet Shanghai standards.
"Citizens vote with their feet," said Chen. "If you cannot satisfy them in Hangzhou, they go to Shanghai."
Beside the heightened competition, high-speed rail can help the economy of cities along the line as it "brings factors together," said Shi Jinchuan, director of the Research Center of Private Enterprise at Zhejiang University.
He cited Japan's bullet train, the Shinkansen. The rail line between Tokyo and Osaka, the two largest cities, also serves commuters from outlying cities.
In Japan, the time savings alone from switching from a conventional to a high-speed network has been estimated at 400 million hours, and its connectivity has rejuvenated rural towns such as Kakegawa that would otherwise be too distant from major cities.
Therefore, as high-speed trains ply the route from Shanghai to Hangzhou, the territorial advantage of nearby cities stands out.
Take Jiaxing City at the midpoint in the line for an example. Since Jiaxing is equidistant from Hangzhou and Shanghai and since its living costs are lower, Jiaxing residents can commute to either city while the small city's own business will be developed.
Shi, the researcher of private enterprise, said a healthy two-way flow is required; the gap among the cities cannot be too wide, "otherwise the strong will attract the weak one's factors like a magnet."
"The cities along the line, like Shanghai, Hangzhou and Jiaxing develop at around the same pace, which is positive," he said.
Though the railway is expected to be highly profitable, when will the investment of nearly 3 billion yuan start to be whittled down?
Chen said the high-speed rail will have economies of scale only when it features three elements - speed, systematic operations and people-orientation; in other words, when it becomes mature.
As to the systematic operations, the Shanghai-Hangzhou high-speed rail line has 50 daily bullet trains on the route from 6:12am to 9:45pm, according to the latest schedule, expected to carry around 80 million people each year.
As for being people-oriented, the Shanghai-Hangzhou train costs from 82 yuan to 156 yuan one way, around twice the cost of the former fast train. More than 80 percent of Shanghai residents polled in a 2,500-person survey, said prices are too high.
Both Shi and Chen agreed that the goal of carrying 80 million passengers a year is not too ambitious. Shi suggests lowering ticket prices.
"Because people need time to accept the high-speed railway, the goal of 200,000 passengers a day may not be reached at first," said Chen. "Yet the number of passengers will climb later and tickets may even become difficult to get."
The new Shanghai-Hangzhou high-speed rail train has placed Hangzhou, Shanghai and nearby cities into a more competitive market.
Departing from Shanghai's Hongqiao Railway Station or from Hangzhou Railway Station, bullet trains equipped with China's CRH380A system zoom to their destination in 45 minutes. After disembarking, it takes around 45 minutes to an hour to get to Hangzhou's West Lake or Shanghai's downtown.
"It means the integration of neighboring cities is coming," said Chen Jianjun, an expert for the comprehensive regional planning group for the Yangtze River Delta, under the National Development and Reform Commission. He is also executive director of the Academy of Regional and City Economic Development of Zhejiang University.
"Shanghai couples can take a romantic walk around West Lake in the evening after work and return home the next morning," said Chen. "Hangzhou people can easily get to Shanghai for concerts and exhibitions."
Now Hangzhou businesses, especially in the service sector, will have to compete with Shanghai businesses.
The first to be affected is Hangzhou's airport in the city's suburban Xiaoshan area.
The nonstop bus from Hangzhou Railway Station to Xiaoshan International Airport costs 20 yuan (US$3) and takes around 45 minutes; and it takes around 15 minutes by Metro to get to Shanghai's Hongqiao International Airport from Hongqiao Railway Station.
Hongqiao has more flights and some tickets for flights departing Hongqiao are cheaper than those of Xiaoshan airport.
To Xiaoshan or Hongqiao? It's an option for passengers, but a challenge for Xiaoshan airport. Similar competition will extend to other sectors, especially high-end business. More options will benefit citizens as Hangzhou businesses will have to improve the quality of service to meet Shanghai standards.
"Citizens vote with their feet," said Chen. "If you cannot satisfy them in Hangzhou, they go to Shanghai."
Beside the heightened competition, high-speed rail can help the economy of cities along the line as it "brings factors together," said Shi Jinchuan, director of the Research Center of Private Enterprise at Zhejiang University.
He cited Japan's bullet train, the Shinkansen. The rail line between Tokyo and Osaka, the two largest cities, also serves commuters from outlying cities.
In Japan, the time savings alone from switching from a conventional to a high-speed network has been estimated at 400 million hours, and its connectivity has rejuvenated rural towns such as Kakegawa that would otherwise be too distant from major cities.
Therefore, as high-speed trains ply the route from Shanghai to Hangzhou, the territorial advantage of nearby cities stands out.
Take Jiaxing City at the midpoint in the line for an example. Since Jiaxing is equidistant from Hangzhou and Shanghai and since its living costs are lower, Jiaxing residents can commute to either city while the small city's own business will be developed.
Shi, the researcher of private enterprise, said a healthy two-way flow is required; the gap among the cities cannot be too wide, "otherwise the strong will attract the weak one's factors like a magnet."
"The cities along the line, like Shanghai, Hangzhou and Jiaxing develop at around the same pace, which is positive," he said.
Though the railway is expected to be highly profitable, when will the investment of nearly 3 billion yuan start to be whittled down?
Chen said the high-speed rail will have economies of scale only when it features three elements - speed, systematic operations and people-orientation; in other words, when it becomes mature.
As to the systematic operations, the Shanghai-Hangzhou high-speed rail line has 50 daily bullet trains on the route from 6:12am to 9:45pm, according to the latest schedule, expected to carry around 80 million people each year.
As for being people-oriented, the Shanghai-Hangzhou train costs from 82 yuan to 156 yuan one way, around twice the cost of the former fast train. More than 80 percent of Shanghai residents polled in a 2,500-person survey, said prices are too high.
Both Shi and Chen agreed that the goal of carrying 80 million passengers a year is not too ambitious. Shi suggests lowering ticket prices.
"Because people need time to accept the high-speed railway, the goal of 200,000 passengers a day may not be reached at first," said Chen. "Yet the number of passengers will climb later and tickets may even become difficult to get."
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