How Beijing-Shanghai rail will effect economic growth?

How Beijing-Shanghai rail will effect economic growth? 

by Vanda Szendrei

Improving public transportation has always played an important role in economic development. Now you can see the possible effects of the new Chinese high speed railway, even for clustering.

In the summer of 2011 the Beijing-Shanghai High-Speed Railway started to operate connecting together two major economic zones. The railway is 1.318-kilometre long and it is the world’s longest high-speed line ever constructed in a single phase. This line means only one part of the huge railway development in China: starting with the operation of China’s first high-speed railway, Beijing-Tianjin intercity railway on August 1, 2008, China’s high speed railway develops from nothing. In the past four years, 21 high-speed railways have been come into service. Until the end of July 2012, the total mileage of China’s high-speed railway reaches up to 6,894km, ranking first in the world. Let’s have a look why the railway is vital for China! 

This development is determined by both China’s first and second geographic nature. Regarding its first geographic nature, China is a vast country with 5,000 km of north-south and east-vast distance. As for second geographic nature the distribution of resources and industries is uneven and large amount of goods through the regions needs to be transported via train. These reasons explain the importance of these giant constructions.

One of the first effects was the decline in transportation costs. Coinciding with the rail launch, economy airfares have slumped with 52 % immediately. However, fares in less price sensitive business and first-class markets appear to have remained comparatively unaffected. Since commuting has become faster for most people, the real distance (measured in time, not in distance) has decreased.

Going back to the impacts, accelerating economic growth seems to be obvious. According to the China Daily newspaper, the newest high-speed railway will create a new economic belt and strengthen the integration of the Bohai Sea Rim and the Yangtze River Delta economic zones. Indeed before the operation started, cities surrounding the railway had benefited from its potential economic effect because real estate prices have risen in spite of the general downward trend. For example in Changzhou, a third-tier city the real estate prices doubled within one year. Soaring housing prices along the rail line are due to the high-speed train's projected effect of business clustering – predicts the paper.

The “direction of” the clustering is an important question. Probably the concerned inter-cities will behave as Central Business Districts gaining more importance over the neighbouring area. Although, as we have seen in the case of the fast-railway between Madrid and the southern part of Spain, a possible outcome is that either Shanghai or Beijing or both of them will loose from their leading role and there will be a shift in emphases to the five inter-stations.

This hypothesis is supported by Zhao Hui who analysed the prospects of this measure with investigating the case of Jinan West Area. The expert predicts that after the completion of Beijing-Shanghai High-Speed Railway, the passenger capacity can achieve 27,000,000 people in the very short time which will lead to huge demand to service industry therefore the market potential of these areas will increase as well. It is possible that local cultural industry will develop enormously. According to the plan, Jinan’s Cartoon Industry will achieve 20 billion dollar. Moreover Huaiyin Industry district, Huaiyin Industry Science district and Modernization International Physical distribution which are close to the station will gain a chance to develop.

However, it seems a self-generating process the government has a vital role too. So, what should the government do? At first, they should provide an appropriate environment for investment through following the market economy rule, producing effective administration environment and promoting strict and standard legal and faithful credit environment. Secondly, they should display the function of strategy guidance It realizes by the pure pursue quantity to quality, introduces better project of high technology, intensity investment, low resources consume, less environmental pollution, strong lead role, good development prospects. Finally, they should formulate corresponding industrial promotion policy continuity. That means, relevant institution should pay close attention to research corresponding executive regulation to enlarge the support to the development of Cartoon Industry. Evolving good tax environment can be a key to this goal.

What we can deduct from case study is that although high-speed rail means a great opportunity for clustering, Chinese policy-makers need to be cautious in order to promote and not hinder the development.

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The Revival of Trams – France is The Frontrunner

The Revival of Trams – France is The Frontrunner

by Ákos Budai

The development of public transport is beneficial for many, France knows this very well as the country has been the world’s frontrunner in the revival of trams in the last couple of decades. This time’s experience shows that tramways are accelerators for urban projects and they can help bring districts and business entities closer together.


Currently, twenty-three French urban areas have at least one tramway line, but it wasn’t like that just a couple of years ago. France once had an excessive tram network, but almost all systems were replaced by bus services in the 1930s or after WW2 because of international trends and government policies favoring buses and cars. The revival of trams started in the 1970s with the introduction of a tax in favor of public transport, which helped many cities develop their metro systems. In the 1980s, the decentralization helped the re-introduction of tramways after local governments realized that smaller cities (which are not suited for a metro system) can also benefit from public transport. Trams made their first big comeback in Nantes in 1985. In 1996, the law on clean air and the rational use of energy set urban travel plans the goal of reducing car use. That and government aids helped smaller cities to build their own tram systems. In 2000, another law allowed urban planning to work on longer timescales and a larger spatial scale. This law provided a strong incentive to link urbanization with transport. No wonder that tramways have been experiencing a revival for several years now.

Tramways are the means of urban planning which perfectly fit into the scheme of urban renewal, transport planning and environmental concerns. The political choice of building tram lines is firmly rooted in the sustainable development philosophies favored by governments. With the help of trams, city planners can take a new approach to urban mobility and urbanization projects. Building a tramway expresses a desire to renew the image of its city, so trams have also become a tool for promoting a city.

Statistics show that tramways increase people’s willingness to use public transportation. Cities with a dense network of public transport systems including tram lines have seen a bigger increase in passenger numbers than cities without trams. This phenomenon can be explained by the fact that the opening of tram lines is usually accompanied by the implementation of a global transport policy to create a better spread across the different means and methods of transport. Therefore, this encourages greater use of public transport and involves restrictions on car traffic and parking. Creation of new cycle routes, mobility management (development of company transport plans, promotion of car pooling and car sharing) and promotion of walking also fit into these tram-building urban plans.

Tramways interact with the city in many different ways: they are open to the city and visible from the streets. Architects and landscape architects have realized this, so they took this opportunity and refurbished streets around tram lines. This refurbishment is especially good for crowded city centres, where decades of heavy car traffic usually lowered the quality of life. Tramways therefore greatly transform urban landscape: silence, reduction in air pollution, tree planting, planting on platforms is visible by everybody, not just tram passengers.

But not only landscape and people’s attitude is changed by trams. Building a tramway in a city has an impact on businesses both during and after its introduction. Owners of businesses are often initially concerned about the loss of trade from customers who travel by car, but subsequently realize that a more peaceful environment can be profitable for them. In the last decades, France provided an excellent study for the consequences of newly built tramways and feedback demonstrates that after the building and adjusting phases - which can both be very damaging in some cases - businesses overall find that trade returns to previous or even higher levels.

Tramway projects usually come with a redefinition of public space, leading to a change of image. This also means an opportunity for owners to renew their businesses. Owners who use this opportunity well can benefit hugely from the introduction of tramways, but those who don’t make the right moves, might experience serious problems. Growth in the service sector is usually a pleasant externality caused by tramways. However, the changes in traffic flow (in customer parking and deliveries) may have a negative impact on businesses which are already vulnerable. Businesses which previously relied mainly on passing trade may also face serious problems. But if the tramway is located in a pedestrian area, businesses in the city centre usually benefit from the flood of pedestrians generated by the tramway. Also, central districts generally attract leisure shopping, leaving more practical purchases to outlying areas, which usually become more accessible with the new tram lines.

Not only small businesses in the building city are affected by new tramways. Many large French companies are using their expertise to create tramways and export skills worldwide, ranging from studies and construction to operating tramway systems. Also, engineering companies are involved in designing tramway projects, they provide studies, project management, project management support to project owners and construction supervision, not just for French clients. Rolling stock designers and manufacturers also play a really important role in today’s tram revival. Until recently, most of the trams running on French networks were manufactured by Alstom. (Alstom is quite well-known internationally as well, just think about the
new metro cars in Budapest.) However, trams designed by other companies such as Bombardier, Siemens and Tranhslor have been selected by some cities as well.

All of this proves that tramways are beneficial for many – they are accelerators for urban projects and they can help bring districts and business entities closer together.

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