The race to win the contract for the high-speed rail link between the Chinese cities of Beijing and Shanghai has entered the home stretch, with Japan ready to pull out all the stops to beat its German and French rivals.
Land, Infrastructure and Transport Minister Chikage Ogi will make a four-day visit to China from Sunday to pitch Japan’s bullet train system for the planned 1,300-km line, construction of which is expected to start early next year.
But while the government sees it as an opportunity to forge lasting ties with China and a springboard to make the bullet train format the de facto standard for Asia, the private sector is determined that it should not end up simply as a goodwill gift of state-of-the-art technology.
“One reason we should cooperate in such a project is that it will help railway-related manufacturers raise profits and reinforce their corporate strength so they can maintain their levels of technology, workers’ skills and facilities, and continue to provide us railway companies with high-quality equipment and service,” Central Japan Railway Co. (JR Tokai) President Yoshiyuki Kasai said.
He added that the cooperation of JR firms must be strictly limited to a “no risk, no return” basis.
“If we are to get involved in the project, cooperation would last 10 to 20 years as it would have to entail not only the building of infrastructure such as trains and signaling devices, but also the training of personnel, handling of operations and maintenance in order to ensure safety,” he said.
Currently, JR Tokai and West Japan Railway Co. are helping construct a 345-km bullet train system in Taiwan by sending technical experts through Japan Railway Technical Service — a government-affiliated corporation that provides technological assistance overseas. The Taiwan railway is scheduled to begin operations in 2005.
The transport ministry estimates the total cost of constructing the Beijing-Shanghai line at about 1.5 trillion yen, with one ministry official predicting that Japan’s private sector would receive orders worth some 500 billion yen of that total should the system be adopted.
While the official admitted that this may not seem such a large amount, he added that the project “would certainly pave the way for (Japan) to pursue greater potential demand since we hear that China intends to expand its railroad system to about 10,000 km.
“Knowing that, why wouldn’t we try to join the project instead of looking enviously at the Europeans doing so?”
But one Japanese railway expert, who asked not to be named, said domestic factors are also behind the urgency to win overseas markets for the bullet train.
“While it is said that the (China) railway will eventually be extended beyond the Beijing-Shanghai sector, (in contrast) there’s little prospect for Japan’s bullet train network to expand further — particularly when the nation is facing the perils of a rapidly graying society and dwindling population,” he said.
Following on the heels of Ogi’s visit, Hiroshi Okuda, chairman of the Japan Business Federation (Nippon Keidanren), will visit Beijing this month in the hope of setting up a bilateral joint action committee to address such pending questions as the actual route of the express railway and funding of the project.
Hiroki Kashiwaya, representative director of the China High-speed Railway Japan Consortium, said his organization, which consists of 39 Japanese companies interested in the project, is anxiously awaiting China’s decision on the rail system.
“If the joint action committee is established, we would like to take part in its meetings from the outset,” Kashiwaya said. “We would then be able to closely watch developments, such as the project’s specifics and bidding conditions.”
Some other experts warn that such a massive railway construction project may not pay off in China.
Meng Jian Jun, a fellow at the Research Institute of Economy, Trade and Industry, has said in one of his columns that instead of building a 1,300-km express railroad, it would be better to first construct a 500-km high-speed link between Hangzhou, Shanghai and Nanjing, improve existing railroad systems and introduce air shuttle links between Beijing and Shanghai.
Meng argued that the total cost involved could thereby be reduced to half that of the express railway project.
Tan Hashida, a professor of economics at Tokyo International University and an expert on industrial development in China, suggested that Japan should concentrate on helping China solve other problems.
“It is doubtful whether Japan’s political motivation — which is for the (railway) project to promote friendship and help reduce anti-Japanese sentiment in China — will be generally accepted,” Hashida said.
If Japan provides low-interest loans for the project, Hashida said that could even run counter to the trend of the times, when official development assistance is being focused more toward areas related to environment and health care rather than infrastructure development.
“And should Japan proceed with this project, in the worst case, it may become embroiled in domestic conflicts in China resulting from the further widening of the gap between the rich coastal areas (that will benefit from the new rail link) and the poor, inland regions.”