According to a report published on the Wall Street Journal,"as a fresh team of Chinese leaders gathers this week in Beijing to lay out broad economic goals, the effort to keep China moving has shifted underground, with dozens of cities spending billions of dollars on subway systems.
The amounts involved might ring warning bells that China is bingeing anew on infrastructure spending to drive growth—exactly what many economists say is an unsustainable strategy. But party leaders indicate that metros are different: They create more sustainable growth by making cities more livable, a trend political scientists say could be endorsed at the party meeting.
The amounts involved might ring warning bells that China is bingeing anew on infrastructure spending to drive growth—exactly what many economists say is an unsustainable strategy. But party leaders indicate that metros are different: They create more sustainable growth by making cities more livable, a trend political scientists say could be endorsed at the party meeting.
In the world's most extensive subway-development effort, at least 26 Chinese cities are constructing or expanding lines, according to the government's Transportation Technology Development and Planning Research Center. The think tank counts another 11 cities with urban railway plans.
China's new leaders are increasingly focusing on urbanization, including smarter cities. From an increasingly prosperous citizenry, they face pressure to reduce air pollution, provide housing that is cheap but livable and to unlock consumer spending. Metros dovetail with these quality-of-life challenges because they provide an alternative to cars and add convenience to life at the edges of big cities.
Many economists argue China must move away from megainfrastructure projects. Resources spent with households and smaller businesses in mind, they argue, will create more sustainable growth. Commuter-rail systems promise to free up household cash that might otherwise be spent on cars or expensive addresses downtown.
"The government reasoned that a modern city has a metro," says Jonathan Woetzel, a McKinsey & Co. director in Shanghai who has advised government officials around China on urbanization issues.
McKinsey calculates that more than 100 Chinese cities could conceivably build subway systems, given many have populations exceeding one million inhabitants. As a city grows, Mr. Woetzel says, a subway acts as a "skeleton" for activity and gives town planners ways of "directly improving the lives of the people in a city."
Transportation infrastructure represented about 22% of the $1.76 trillion total indebtedness of Chinese cities in 2010, according to a national audit. Authorities say updated audit figures expected soon will only sharpen concerns governments overstretched to modernize.
McKinsey's Mr. Woetzel agrees with China's urban planners and reasons subway construction will only get more expensive. Mr. Woetzel said the bigger concern is how Chinese cities intend to fund operations.
Fares won't likely pay the bills. New York City's Metropolitan Transportation Authority covered only about 73% of last year's subway expenses from $2.74 billion in fare collection, according to U.S. government figures. Subways in China typically close before midnight and typically charge a fraction of New York's $2.50 base fare: around 2 yuan, or 30 cents.
Subway construction started slowly. Beijing completed its first line in 1969 but took 15 years to open a second. In 1991, the World Bank frowned on a plan to build a subway in Shanghai, then a city congested by 6.5 million bicycles and 200,000 vehicles, mostly trucks.
It is "doubtful that such an expensive mode can be the core of the urban transport system," the Washington-based bank said in a report that suggested "less costly alternatives" such as aboveground light rail, bus lanes and priority for bicycles.
Shanghai ignored the advice. Two years later, it inaugurated Subway Line 1 and then built 12 more lines—hopscotching with Beijing to claim the world's longest system. With a million private cars on the road today in Shanghai, emphasis has shifted toward integrating the city's most distant points into the subway, including beyond municipal borders such as the extension to Kunshan.
