China has raised the price of railway freight by a higher-than-expected 13 per cent to help operators cope with rising operating costs, sources linked to the country's top planning agency told the official Shanghai Securities News on Wednesday.

The increase, which comes into effect from today, will help boost earnings for Chinese rail operators, such as Daqin Railway Co Ltd and Guangshen Railway Co Ltd, but lift the cost to transport commodities such as coal.

About half of China's annual 3.7 billion tonnes of coal ouput is transported by rail.

A source close to the National Development and Reform Commission, China's top economic planner, said prices would rise by 0.015 yuan per tonne per km, the eighth price rise since 2003.

FOR THE past two weeks, nearly all of China was on the move, as hundreds of millions of people made the journey home for their New Year celebrations. According to official figures, 2013 will have seen a record-breaking 3.41 billion passenger trips during its 40-day Spring Festival travel season. Of those many travellers, 225m—equivalent to the total populations of Germany, France, and the United Kingdom—will have taken a train within China this month.

Chinese travellers queue up early each year to secure tickets on the more popular routes. The government has enacted measures to combat ticket-scalping. Some enterprising buyers have found high-tech hacks to solve the perennial problem of getting a ride home.

Thirty-six hours is the lifespan of the adult Mayfly. It is the average work week (plus one hour of overtime) in France. It is the name of a 1965 film starring James Garner. It is also an incredibly long time to spend on a train. In the midst of the Lunar New Year rush, your correspondent is travelling 36 hours by rail from Beijing to Kunming, the capital of Yunnan province, in China’s south-west.

The Chinese government is justifiably proud of its network of futuristic high speed trains. The newest addition—the longest high-speed railway line in the world—opened at the end of 2012, allowing passengers to make the 1,418km journey from Beijing to the southern metropolis of Guangzhou in just eight hours. But high-speed rail service to remote Yunnan isn’t scheduled to be completed until 2015.

Instead your correspondent is on the T-61 train out of Beijing West Station. The “T” stands for tekuai or “Extra Fast.” At top speeds of 140 kilometres per hour, no doubt at one point the T-Class trains lived up to their billing. But the rapid development of China’s rail system has left them behind, and they now rank toward the middle of the league in terms of overall speed. Their primary benefit is that they rank towards the middle in terms of price as well. A 2nd-class sleeping berth costs around $88, as opposed to over $250 for a seat on the new Beijing-Guangzhou high-speed line.

The first-class berths on our train are in enclosed compartments, each with four bunks plus the added luxury of a door. The greatest number of rail passengers in China, however, travel 2nd-class, which means six bunks in compartments that open directly to the passageway.

Toilets and sinks are at the end of each car. Unpleasant odours there are masked by a perpetual haze of tobacco, as smokers huddle between cars—the only place on the T-61 where cigarette-smoking is tolerated. Even the dining car has gone smoke-free. (Midway through the dinner service one evening, it seems to go food-free as well.)

Ticket prices vary according to the bunk you choose. Top berths can require an intricate series of acrobatic moves to get in and out of bed, although being up high tends to mean more privacy. Lower bunks are more convenient, but it is understood that they are to be shared with all of the other passengers in your compartment, and their friends and family, until the lights-out, at 10pm.

Train travel in China—as with most things in this country of 1.5 billion people—is a distinctly communal affair. Crammed together for three days, garrulous and curious passengers move from compartment to compartment, striking up conversations with their neighbours that last for hundreds of miles. Sometimes the chats can become quite boisterous.

A travel companion in another car endured a mostly sleepless night on our first evening aboard when a group of revellers, dismissed from the café car but not before finagling a bottle of the local spirits to go, decided to continue their festivities in his compartment. Fortunately, such incidents are relatively rare. The conductors are ever vigilant. One tapped your correspondent awake at 2.30am to tell him to put away the iPad he had foolishly let fall off of the bunk after falling asleep while reading.

The tendency to more old-fashioned chatter is helped along by our train’s relative dearth of electrical outlets. The new high-speed trains are equipped with Wi-Fi and stations for charging all manner of electronic devices. On our T-61 rumours circulate of working outlets in this car or that. Ill-fated forays are made to these El Dorados of electricity. By the evening of the second day, most devices have run low or run out. Cards and books replace gaming devices and tablets. Cut off from social media, people decide to instead simply be social.

Just before our arrival in Kunming, in the very early morning, a conductor comes to roust people from their bunks. He needn’t bother though, as a few minutes earlier the compartment lights had switched on and the speakers began blaring with smooth sax stylings reminiscent of Kenny G.

Kunming is end of the line, but that may soon change. The high-speed line connecting Kunming and Shanghai which is scheduled to open in two years is part of an even more ambitious plan to link south-west China with South-East Asia by rail. The plan to build a rail line between Kunming and Singapore was first proposed by colonial authorities over a century ago. As part of an effort to establish Kunming as a regional economic and transport hub for South-East Asia, a proposed high-speed line between Kunming and Singapore is scheduled to begin service in 2020. At that time, it would become possible to travel by high-speed rail from Singapore to Beijing and beyond. For now, the journey takes at least a few transfers and quite a bit longer.

To passengers caught in the holiday rush, it can seem interminable. For others, it can be an enforced time-out from the bustle of an increasingly hectic and connected China—and a way to go home, too.

Nomura Economists Zhiwei Zhang and Wendy Chen not that last night saw the largest hike in the rail freight tariff since 2003, which reinforces their view that CPI inflation will rise above 3.5% in H2 and lead to two interest rate hikes.

They note that overnight, the National Development and Reform Commission (NDRC) and the Ministry of Railway (MOR) raised the rail freight tariff by 13.0% effective 20 February 2013, from RMB0.1151 per ton-km to RMB0.1301, the largest hike since 2003.

They feel that the tariff hike suggests that the government may move to lift other administratively suppressed prices, such as electricity and other public utilities. They note that energy price reform has been on the top of the government?s policy agenda since 2012, but was delayed due to concerns over GDP growth slowing. Now that growth has recovered while inflation remains low, the window for energy price reform has reopened.

Both Zhang and Chen believe that this, together with slowing potential growth and a tight labour market, supports their view that CPI inflation will rise to 3.5% for full-year 2013 (Consensus: 3.1%), rise to 4.4% y-o-y in H2 2013 and cause the People?s Bank of China to hike interest rates twice in H2. They finish by writing, "We continue to expect growth to slow from 8.1% in H1 to 7.3% in H2."

BELGRADE -- The Chinese Embassy in Budapest has launched an initiative for the construction of high-speed rail on Corridor 10 between Belgrade and Budapest.

Tweet Tanjug is quoting Serbian Ministry of Transport sources who on Thursday said that the rail would have trains traveling faster than 300 km/h.

The total value of the investment would add up to EUR 2 billion, early estimates show.

According to Chinese representatives, officials should discuss the possibility of building the railway for trains that go at speeds of over 300 km/h since it would be built in almost perfect conditions thanks to the environment.

Trains connecting the two countries would be modern, of the latest generation which are used in China nowadays.

Hungary knows about the idea and the first steps in terms of the initiation of talks have been made, and report about this has been presented during the recent meeting between the head of the Economic Department of the Chinese Embassy in Belgrade and Serbian Minister of Transport Milutin Mrkonji?, the news agency reported.

Talks on the model and the ownership structure of the project should also be conducted. At this stage, it is known that Chinese investors allocated the funds from the Chinese Development Fund aimed at investments in south-east Europe.

Chinese officials suggested that loans should be ensured and this matter should be discussed by the governments of Serbia and Hungary.

The Chinese initiative for the construction of high-speed rail was also discussed at the session which the joint Hungary-Serbia commission held last December, and it was included in the conclusions on the commission's work.

According to analyses issued so far and the data procured from economic and expert teams, the railway would pay off and its construction would be justified since the flow of passengers, goods and capital between the two countries is constantly increasing.

Back in 1992, the European Commission defined the idea for the construction of the Belgrade-Budapest railway as one of the priorities in the sector of the development of railway infrastructure.

Not only does China’s new high-speed rail system work, it is proving to be financially viable too

Picture yourself getting into a gleaming bullet train in Beijing and then pitching up at Dublin’s Connolly Station several days later, having traversed central Asia and the European mainland by high-speed rail. This is a real possibility by 2025, if China’s ambitions to build an iron silk road using its high-speed rail technology.

Closer to home, imagine being able to travel by train from Cork to Dublin in just 40 minutes. On a much larger scale, the equivalent journey across the north-south divide in China is Beijing to Guangzhou, a 2,298km journey that used to take 22 hours, but now takes just eight hours since the opening in December of the high-speed line between the capital and the southern commercial hub.

In terms of showcasing China’s technological innovations, and showing how it has become so much more than just a low-cost manufacturer, the high-speed rail project is up there with the space programme and the Beijing Olympics.

Wang Hui, deputy dean of the School of Economics and Management at the Shijiazhuang Tiedao University in Hebei, outlined the opportunities the new route will bring.

“The Beijing-Guangzhou high-speed railway connects the economic region around Beijing with the Pearl River Delta. Considering the population and levels of development of the two economic zones, they are undoubtedly important engines for China’s economy, therefore improving the transport system will definitely increase exchanges between the two in terms of investment, talent and information,” he said.

Another showcase route is the Beijing to Shanghai route, which covers 1,318km and runs 90 pairs of trains daily, with the trip taking four hours and 48 minutes.

China started its high-speed rail network programme in 2007, but already it is the biggest in the world, with 9,356km of high-speed railways.

The web of bullet train lines will reach 18,000km by 2015, Sheng Guangzu, minister of railways, told a recent rail conference. That means more than 8,000km of newly built stock will be put into service within three years.

The plan is to expand this to 50,000km by 2020, with four main lines running north and south, and another four east and west. The high-speed train pulls in to vast, customised stations, with terrific facilities.

At times, it makes Irish and British rail networks look as modern as Thomas the Tank Engine.

This is still a developing country, and there are complaints that the prices are too high. The top price for a ticket from Beijing to Guangzhou is more than 2,000 yuan (€235), which is about the same price as a flight.

It is the emerging middle class and wealthy who take the train. Even though the Guangzhou to Beijing journey takes eight hours, versus around three hours flying, many travellers like the fact that there are fewer interruptions, the view is pretty, you can walk around at leisure and it is easier to work – even if internet access seems a bit patchy and not all the seats had power-points.

Investment in the high-speed rail network was a big part of China’s infrastructure spending programme in 2008/2009, when Beijing pushed out a four trillion yuan (€490 billion) stimulus to fight the financial crisis.

The rail ministry plans to invest 650 billion yuan (€76 billion) in railway infrastructure, aiming to have 5,200 kilometres of new railways opened this year.

Record speed

During the development of the project, a train on the Beijing-Shanghai route hit a record speed of 486km/h during a test run, which the Xinhua news agency said was the fastest speed recorded by an unmodified conventional commercial train.

There are real time savings with the high-speed train.

The train journey from Shanghai to Beijing used to take 10 hours, but by bullet train our crossing through eastern China takes just four hours and 48 minutes.

Once difficult-to-reach cities, with giant populations, are suddenly become accessible and the economic impact will be immense.

It takes in major cities like Shijiazhuang, Wuhan and Changsha, and is expected to bring economic revival there too, including the usual direct economic benefits, such as time-savings for travellers, cost savings for operators, and reductions in aspects like air pollution, noise, and accidents, the World Bank has urged China to look too at the wider economic benefits of the system.

“Look at the case of Zhengzhou on the Beijing to Guangzhou line . . . in the past, in a three-hour conventional train journey on this line, about three million people from Anyang, Xinxiang and Handan can reach Zhengzhou.

Today, with the opening of the new high-speed line, this number will surge to 28 million people from eight cities,” said Gerald Ollivier, the World Bank’s senior transport specialist.

“These cities will start to work more closely together as a return trip within a day will be within reach. The impact in terms of economic exchanges, accessibility, and productivity gains are expected to be significant, and extend beyond traditional transport savings.

“The scale and scope of the Chinese high-speed rail programme offer a unique opportunity to try to measure such impacts,” said Ollivier.

Success at home means the technology can be sold abroad. China has already built high-speed rail networks in foreign countries such as Turkey and Venezuela, and has ambitions farther afield, including possibly California.

If the government can overcome all the red tape of crossing so many lands, the rail route could eventually link Shanghai to Singapore via Rangoon, or Kunming in southwestern Yunnan province to New Delhi, Lahore and on to Tehran.

While the high-speed train is technically Chinese, some of the world’s biggest engineering companies point out that China had a lot of help.

During the construction of the network, China relied on technology transfers from a number of foreign companies, including France’s Alstom, Germany’s Siemens and Japan’s Kawasaki Heavy Industries, which constructed the Shinkansen, Japan’s bullet train.

Kawasaki has accused the Chinese of copying their ideas, but China’s vice-minister of science and technology Cao Jianlin dismissed any accusations of intellectual property rights theft.

Platform for innovation

Cao says it had taken years of development by Chinese engineers to come up with the technology and that the high-speed rail technology will provide a platform for more innovation.

The high-speed rail industry “will further research patent strategy and the global IPR [intellectual property rights] situation to better understand the laws and policies of countries they export to”.

The reputation of the high-speed rail network seems to have largely recovered from the collision in Wenzhou in July 2011 that killed 40 people. The accident was China’s worst rail disaster since 2008 and caused widespread public criticism, focused on the government, saying the rail authorities were rushing to expand the network without taking individual public safety into account.

Since the accident, the train travels at a maximum speed of 300km/h, down from the original average speed of 329 km/h, as the trains were made to go slower following the Wenzhou crash.

The project has also wrestled with corruption issues. The former railway minister, Liu Zhijun, was dismissed in 2011 after a corruption probe revealed a web of graft and sexual peccadilloes.

Stories abound of substandard building practices leading to delays in construction as sections of track are taken down and reinstalled.

National fund

With construction of the network intensifying, the government is considering a national fund to encourage private capital to invest in China’s high-speed railway development and help ease the increasing financial burden stemming from intensified high-speed rail construction Wang Mengshu, a member of the Chinese Academy of Engineering, reckons about 600 billion yuan (€70.6 billion) will be needed every year for the next three years to support the extension of the network.

“Considering the huge debt burden, the financial pressure weighing on the ministry will be very heavy,” Wang said.

The rail ministry will diversify financing channels by encouraging local governments, enterprises and the private sector to participate in railway construction.

According to a report late last year, four of the country’s high-speed rail lines achieved break-even since the bullet trains started running full-speed, intercity services – with ticket revenues matching costs, including debt payments – on several routes, including Beijing to Tianjin, Shanghai to Nanjing, Beijing to Shanghai and Shanghai to Hangzhou lines.

Not only does the high-speed rail system work, it’s financially workable too, something that will give European governments pause for thought.

Long road thousands and thousands of kilometres to go

Even though the high-speed network programme was begun in 2007, it is already the biggest in the world, with 9,356km of high-speed railways.

By the end of last year, China’s high-speed railway network was the longest in the world – at 9,356km – while its total railway network was the second longest in the world at 98,000km.

China’s railway carried 1.9 billion passengers last year, which was an increase of 4.8 per cent on the previous year, and 3.9 billion tons of cargo, which was about the same as had been carried the previous year.

Key projects last year included the Harbin-Dalian high-speed railway, which is the world’s first high-speed rail in areas with extremely low temperatures.

The Beijing-Guangzhou high-speed railway is the world’s longest high-speed rail with 35 stations in major Chinese cities along the way.

According to the 12th Five-Year Plan, China will spend about 650 billion yuan (€76.6 billion) on fixed assets investment this year, including 520 billion yuan (€61.3 billion) in infrastructure facilities and construction of more than 5,200 kilometres of railways.

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On rail tracks in Atbara, Sudan's main railway city, stray engines and empty coaches from trains built in Europe, India and the United States, some more than 50 years ago, stand still in the scorching heat.

The trains broke down years ago and many of the coach windows have been smashed, while the tracks they stand on are derelict.

Sudan was once home to Africa's largest railway network, with more than 5,000 kilometers (3,100 miles) of track running from the Egyptian border to Darfur in the west, Port Sudan on the Red Sea coast and Wau in what is now South Sudan.

Today, after decades of mismanagement and neglect, most of the country's rail track is out of service. But the government, with the help of Chinese money and expertise, wants to rebuild it and restore some of the industry's former glory.

Modernizing the railways, Khartoum hopes, will boost the export of livestock and products such as cotton and gum arabic - an edible gum taken from acacia trees and used in soft drinks and drugs. That would help support Sudan's economy, which has been plunged into crisis by the loss of most of the country's oil production since it split from South Sudan in 2011.

"We need the railway," said transport minister Ahmed Babiker Nahar. "Road traffic is expensive. The railway is cheaper, faster, safer and has a bigger capacity. Livestock arrives in better condition by rail."

The government's plan will require considerable investment. State railway operator, the Sudanese Railway Corp., has just 60 trains left in operation. And they cannot travel at more than 40 kilometers an hour because the British-designed wooden sleepers and tracks, mostly laid between 1896 and 1930, are too weak.

"The entire rail network is broken down," said Makawi Awadh Makawi, head of the Sudanese Railway Corp. "We have no passenger trains operating anymore and transport only 10 percent of the cargo traffic in Sudan." Most goods are transported along Sudan's poor road infrastructure.

Makawi said China, Sudan's biggest aid donor and one of the biggest investors in the African country, and South Korea had agreed to replace and repair old freight and passenger trains. Khartoum is also in talks with Ukraine about buying trains and railway track.

He would not disclose details of the train contracts. China typically funds development projects in Sudan by granting loans which pay Chinese firms doing the work on the ground.

Chinese state firms built up much of Sudan's oil industry before the secession of South Sudan and have also built a major dam on the Nile, as well as cross-country roads and are due to build a new airport in Khartoum.

Sudan should become a transport route for some of South Sudan's oil production once the two countries can agree an arrangement.

As part of a drive in Africa to secure raw materials and oil, Chinese firms have also invested in Sudan's gold industry.

"We have a contract with the Chinese for 100 passenger and 100 cargo cars and another deal for 50 cars for oil tanks," said Nahar, adding that South Korea had delivered 13 locomotives so far.

Work to renew the rail tracks started last year when China's Shanghai Hui Bo Investment Co (SHIC) opened a plant in north Khartoum, opposite the Sudanese capital's main train station, and is producing 1,200 concrete sleepers a day, according to its Sudanese manager Sharaf Nasser.

Within two years, officials hope to renew between 1,000 and 2,000 kilometers of track across the country. In a first sign of progress, a daily cargo train has started running from Khartoum to Atbara, some 300 kilometers north of the capital, from where a line to Port Sudan is now being rebuilt.

Officials hope to restart the line from Khartoum to Nyala in Darfur via North Kordofan state, where most gum arabic is produced, although no start date has been set. A map in the manager's office of SHIC's plant marks the next vision: extending the rail line from Nyala into neighboring Chad. Sudan announced plans this month to give Chad fixed storage space in Port Sudan to encourage bilateral trade.

GLORIOUS PAST

In its heyday the state railway operator used to control river trade along the Nile, as well as Sudan's ports and the country's telegraph network, in addition to its rail traffic. Until the 1980s it also owned extensive housing compounds, social clubs and hotels to serve more than 30,000 employees.

"The railway made up 40 percent of GDP in 1959," said Nahar, referring to the total combined income from the railways, ports, river trade and hotels at that time.

In Atbara, where the railway divides the city in two, there are reminders of a glorious past.

One half looks like any other Sudanese town, with low-rise buildings and bustling street vendors, while in the other half, virtually a ghost town, dozens of elegant villas, built by the British to house railway managers, are now derelict.

Among the few occupied buildings is a large colonial-style villa, used as a Sudan army post.

The railway's decline began in the 1980s when the late President Jaafar Nimeiri, fighting economic turmoil, ordered layoffs and cut funds for the railway after failing to break the power of the Communist Party and the trade unions, which frequently ordered rail strikes, paralyzing the economy.

More than 20,000 workers were fired within a decade, most of them after a strike in 1989 after President Omar Hassan al-Bashir came to power in an Islamist coup.

"This regime (under Bashir) destroyed the railway," said Kamal Hussein, a Communist Party member who was fired in 1989 after working as a railway accountant in Atbara and Khartoum for 23 years and now works for a private firm.

"I was fired for political reasons. I had to leave the company housing," said Hussein, who still thinks of the railway as one big family. "The railway was the engine of the economy."

Governments since have struggled to raise funds to maintain railway infrastructure, including buying new trains.

EXPORT DRIVE

At SHIC's spanking new factory in Khartoum, manager Nasser says the concrete sleepers being produced will allow trains to travel at high speed.

"The new sleepers will allow travel of 180 kilometers per hour," he said.

That would facilitate the shipment of goods across the country including the transport of livestock and agricultural products, which account for around 20 percent of Sudan's exports, according to central bank data.

Boosting exports of gold, minerals and agricultural products is vital for the country's economy, which has been struggling to contain soaring inflation and a sharp deterioration in the value of the Sudanese pound since the South took away oil revenues.

But at the railway workshop in Khartoum, a large hall which still has signs in English from the colonial era which ended with Sudan's independence in 1956, workers in oil-stained overalls are more skeptical about the government's plans to revive the industry.

"It's not possible for the railway to make a comeback. It will only get worse," said Amir Abdel Hafith, a worker who had just finished his day shift. He makes only 350 Sudanese pounds ($50 based on the black market rate) a month, not enough to pay for food and housing when inflation in Sudan is running at 43 percent.

The state railway company, he says, is giving priority to repairing and maintaining trains owned by private companies, including oil companies, rather than the bulk of train stock which is state-owned, because private companies pay well to have work done.

At Atbara station, railway worker Mohammed Ahmed, standing next to two South Korean rail workers, worries about plans to invest in Chinese and South Korean stock, rather than German and American-built trains as in the old days.

He points to a train with a plaque showing it was made by German firm Thyssen in 1981.

"It was built in 1981 but it's still working. When it comes to the railway, I only believe in American and German technology. They build strong engines," he said. "China and Korea, they don't produce good quality."

Rail officials reported that unprecedented numbers of tickets are being returned by holiday passengers and suggested that more than 10 percent of the tickets bought could have been returned by the end of China's holiday travel rush this year.

Experts are suggesting the reason could be more flexible purchasing periods for tickets and lower charges to return a ticket.

According to a report on China Central Television, more than six million tickets have been sold daily during the rush so far, with around 700,000 of those being returned.

On average, 14,000 tickets have been returned daily at Beijing Railway Station since the rush started, said Chen Chao, the station's director of ticketing.

At Shanghai's three main stations, the rate is around 10,000 tickets per day, according to local news portal xinmin.cn.

Previous reports have suggested that on the three days after Jan 26, an average of 460,000 tickets were returned daily, against 250,000 in 2012.

Ji Jialun, a professor at Beijing Jiaotong University, told China News Service that longer purchase periods were allowing Chinese rail passengers much more flexibility, and lower charges being levied for returning tickets meant passengers were more willing to change their plans.

According to Ministry of Railways regulations, passengers can now buy railway tickets online or by telephone 20 days in advance for their trips, and 18 days in advance at ticketing windows.

One passenger named Ziliande Xiaoweiba said on Tuesday that she had found it easy to return her ticket after changing her plan. She was charged 5 percent of the full price of the ticket, against 20 percent charged before 2011.

However, it can be a time-consuming process if the ticket was bought at a railway station ticket window.

Ni Binyan, a vet from Jinan, capital of Shandong province, said there were queues at Jinan Railway Station on Tuesday of people returning tickets.

Ni waited almost an hour to return a ticket for a trip on Feb 11 from Jinan to Huaibei in Anhui province.

"When I bought a ticket for my trip on Feb 11, it was for a no-seat ticket. So when I found there were some tickets with seats, I decided to return this one," said Ni.

A telephone agent from 12306, the ticketing hotline of Beijing Railways Bureau, said that since Friday inquiries to return tickets had been rising, particularly for online bookings.

The bureau also said on its micro blog that by Saturday more than 700,000 railway tickets bought online had not been picked up by customers.

It said if customers wanted to return their purchased tickets, they should do so as soon as possible as those tickets could be sold again to other passengers.

Chen Chao, from Beijing Railway Station, reminded travelers that buying and returning ticket systems are connected, and that people can buy any returned railway tickets immediately.

Chinese travelers are using apps to cut in line as the nation’s train-ticket website strains under 120 million views a day in the run-up to the Lunar New Year.

Li Juan joined at least 6 million people using “ticket- grabber” apps after spending five hours fruitlessly clicking on the rail ministry’s site. Using the program, she made her reservations for next month’s holiday season within two minutes.

“It was so easy,” said Li, 38, who runs a clothing shop in Hangzhou, eastern China. “I had been cursing all the time while trying to get into the railway ministry website.”

The free apps from Internet companies including Qihoo 360 Technology Co. and Kingsoft Corp. have split government departments and highlighted a digital divide within China. While the tech-savvy can more easily make bookings, low-wage workers living thousands of miles from their families are finding it harder to buy tickets at stations for their once-a-year trips.

“This is definitely unfair,” said Zhao Jian, a professor of economics at Beijing Jiaotong University, which focuses on transportation. “In the past, migrant workers with stamina could get tickets. Now, people with technology get them.”

The programs ease use of the ministry’s website by automatically resubmitting a booking request every few seconds until it is accepted. Without one, users have to click and sporadically re-enter travel details themselves. www.12306.cn

Station Lines

The rail ministry, which has a monopoly on ticket sales, introduced the website last year to tackle black-market transactions and to ease lines at stations that often leave passengers waiting for hours. It is offering 36 percent of tickets via its website. Online buyers are also able to make reservations two days earlier than customers buying at stations.

About 6.75 million tickets are being sold in total each day, 13 percent more than a year earlier, Cheng Xiandong, a rail ministry official, told the state-run People’s Daily newspaper this week. The network will probably carry 224.5 million passengers during the 40 days starting Jan. 26, according to the ministry. The weeklong holiday begins Feb. 9.

The rail ministry suggested the ticket-grabber apps should close because they are generating extra website traffic and making it even harder for non-users to make a booking, according to the People’s Daily report. The technology ministry has taken a more supportive position.

“We encourage Internet companies to improve and innovate in the ways they serve people,” Zhang Feng, a Ministry of Industry and Information Technology spokesman, said at a Jan. 23 briefing. The ministry has asked the companies to work with rail authorities on making it easier to purchase tickets, he said.

The ticket website had 120 million views on Jan. 19, more than Sina Weibo, a Chinese version of Twitter, said Joseph Qiu, a manager at Internet data provider Experian Hitwise. The rail ministry didn’t reply to faxed questions from Bloomberg News.

Stranded Travelers

Li Yunying, 33, and her husband are among travelers who will probably miss out on a trip home this year because they can’t made train bookings. The Guangdong province textile- factory workers, who rarely use the Internet, have so far failed to buy tickets even after calling the sales hotline more than 60 times and making three trips to the jammed station.

“I am disappointed and unhappy, but have no way out,” said Li, whose two children live at least five hours away by train in Hunan province. “We work for 11 hours a day -- how can we learn to use new things like this software?”

Qihoo, Kingsoft

Qihoo’s ticket grabber has been used by more than 5 million people this year. The Beijing-based company has no plans to close the app because of the support from the technology ministry, said Ai Yongchun, a spokeswoman. Qihoo, China’s largest Internet-security software provider, also offers an app for calling the ministry’s phone line that has been used by more than 3 million people, she said.

Kingsoft is helping low-wage workers who don’t have access to computers by renting buses so some of them can get home for the holidays, said Jin Lei, marketing director at the Hong Kong- listed company’s Internet-security unit. Its ticket-grabbing app has been used by more than 1 million people.

Rao Yuan, 28, a bank worker in Wuxi city, Jiangsu province, successfully used an app to book two tickets for a trip to his home in Hubei province, he said. That means he can get home in about four hours, half the time taken by bus.

“The software did me a big favor,” he said. “Going by bus would have been a lot of hassle.’

Fears over intellectual property rights will not derail China's exports of bullet trains, as the technology is home-grown, the vice-minister of science and technology said as he dismissed as "nonsense" copycat claims by a Japanese company.

The country had developed its own version of high-speed technology through years of innovation, Cao Jianlin said in an exclusive interview.

Cao also encouraged Chinese companies to file for patents overseas.

China's high-speed rail industry has been booming since 2004, and Cao said the sector "will further research patent strategy and the global IPR situation to better understand the laws and policies of countries they export to".

His comments come after Kawasaki Heavy Industries suggested China had not developed its own high-speed technology.

The Japanese company teamed up with CSR Sifang, which then produced China's bullet trains after the Ministry of Railways launched a bidding process to build a high-speed network. Purchasing contracts and technology transfer agreements were signed with Chinese counterparts.

Other global companies, such as Siemens of Germany, Alstom of France and Canada's Bombardier, also signed the contracts and agreements.

"China says it owns exclusive rights to that intellectual property, but Kawasaki and other foreign companies feel otherwise," the Japanese company said in a statement quoted by The Wall Street Journal.

The statement added that Kawasaki was looking to solve the issue through talks.

"We did buy trains that could travel at 200 kilometers per hour from Kawasaki, but the purchase was based on legitimate contracts," Cao said.

"Chinese companies paid technology transfer fees according to the contracts, so it is nonsense to accuse China of copying their technology."

Kawasaki constructed the Shinkansen, Japan's bullet train. However, like other manufacturers, a drop in global demand prompted the company to look at overseas markets.

"If Kawasaki really believes China copied its Shinkansen technology, it should have sued the Chinese companies, instead of complaining to the media," Cao said. "Maybe the company did not expect China's high-speed railway to grow so quickly, making the country a world leader."

Based on the transferred knowledge, China's scientists developed a wide range of technologies, including system integration and component parts, the vice-minister said.

Before 2005, China had few patents relating to high-speed trains. The numbers soon started to increase and in the first half of 2012, 163 patents were registered in China. Of these patents, 90 percent were held by Chinese companies with German, Japanese, French and US companies making up most of the balance, according to Cao.

The Ministry of Science and Technology also carried out high-speed technology innovation. For example, the ministry arranged a group of research projects. The projects attracted 2.2 billion yuan ($350 million) in government investment and more than 5 billion yuan from the business sector.

"The sci-tech projects helped us to build independent intellectual property rights," Cao said. Chinese companies are producing three 350 km/h trains, and the goal is to link the high-speed network with lower-speed trains, for example elevated trains, traveling inside a city. "This could change people's way of life," Cao said.

It is feasible that people could live and work in different cities, Cao said. "A dynamic economy needs greater public mobility."

On Dec 26, a new high-speed rail line opened linking Beijing and Guangzhou, but the ticket prices raised a few eyebrows.

Prices for the 2,298 km journey ranged from 865 yuan to 2,727 yuan for the 8-hour trip.

"We have to admit that the ticket price is too high for most people," Cao said. "But we should also be aware that there are some people who are willing to pay the high price to save more time.

"That is the reason we construct high-speed railways - to save time for people who would like to pay more."

Wider economic development benefits of high speed rail projects are  significant and are worth considering in the evaluation of such programs, in addition to traditionally measured direct transport benefits, suggests a new World Bank research paper released today.

According to the paper titled High-Speed Rail, Regional Economics, and Urban Development in China, there is an emerging consensus that major transport investments may have significant impacts that are not well captured through conventional cost-benefit analysis.  Conventional economic evaluations of major transport infrastructure investments tend to focus on the direct costs and benefits arising from travel, including time savings for travelers, cost savings for operators, and reductions in aspects like air pollution, noise, and accidents.

In China, the high speed rail program is changing the dynamic of travel, with more people travelling by high speed rail than flying.  The World Bank has supported both econometric studies and on-the-ground surveys that begin to identify and quantify these impacts in the context of the country’s emerging high speed rail program. 

Based on this and other research, the Bank has begun to pilot a methodology to evaluate wider economic development benefits for several high speed rail projects, and has found them to be significant - of the same order as direct transport benefits. Crucially, these benefits of larger and better connected markets accrue to businesses and individuals even when they themselves do not travel as the flow of ideas and people accelerate. The paper highlights this research and methodology and some of the policy implications to maximize these benefits in practice.

Gerald Ollivier, World Bank’s Senior Transport Specialist working on the high speed rail program in China gave an example. "Look at the case of Zhengzhou on the 2,298 km Beijing to Guangzhou line opened on December 26,” he said. “In the past, in a three hour conventional train journey on this line, about three million people from Anyang, Xinxiang and Handan can reach Zhengzhou;  today, with the opening of the new high speed line, this number will surge to 28 million people from eight cities. These cities will start to work more closely together as a return trip within a day will be within reach. The impact in terms of economic exchanges, accessibility, and productivity gains are expected to be significant, and extend beyond traditional transport savings. The scale and scope of the Chinese high speed rail program offer a unique opportunity to try to measure such impacts."

SHANGHAI--China's Ministry of Railways has received approval from the nation's economic planning agency to issue 150 billion (US$24.12 billion) worth of bonds this year to finance the costly maintenance and construction of a fast-expanding railway network, people familiar with the situation told Dow Jones Newswires Thursday.

With the permission from the National Development and Reform Commission in hand, the debt-laden railway ministry is on track to issue the first batch of the bonds, which will be worth CNY20 billion, in March, said the people, who didn't wish to be named.

The bonds scheduled for sale in March will have a 10-year maturity, they added.

The ministry is China's largest corporate-bond issuer.

Officials from both NDRC and the ministry couldn't immediately be reached for comment.

Minister of Railways Sheng Guangzu said earlier this month that Beijing will increase investment in the sector this year to CNY650 billion yuan, up from last year's actual investment of CNY631 billion.

This year, CNY520 billion will be spent on infrastructure compared with CNY400 billion last year, some of which will go toward extending the rail network by 5,200 km, Mr. Sheng said.

As of the end of September, the railway ministry had a debt-to-asset ratio of 61.81%, up from 60.63% at the end of 2011.

Since the middle of last year, Beijing has been accelerating approvals for infrastructure investment, notably for railway and subway networks, to stimulate the economy.

Investment in the railway sector, especially in the ambitious high-speed railway network, had previously stalled following a deadly accident and a high-profile corruption scandal two years ago.

The construction of China's New Eurasian Land Bridge through Central Asia has been gathering speed in recent months and looks to make even greater progress in 2013.

At the end of 2012, China and Kazakhstan opened their second major rail link at the Xinjiang-Kazakhstan border city of Korgas. The new link comprises a 300-kilometer section in both countries that connects their rail networks from Jiangsu Province to the rest of Kazakhstan's rail system, which itself is being expanded through enhanced China-Kazakhstan cooperation.

On December 22, 2012, Kazakhstan Temir Zholy, the national railway company of Kazakhstan, reported that Kazakhstan and

 
China have started using the new railway crossing of Altynkol-Khorgos. It is expected cargo transportation will reach 10 million tonnes in 2015 and 15 million tonnes in 2020.

Industry observers expect the Korgas Pass, which now connects China and Kazakhstan by a railway, a highway and an oil pipeline, to handle 20 million tonnes of cargo per year by 2020 and 35 million tonnes per year by 2030. [1]

Riding the rails
Until now, the only railroad border crossing between China and Kazakhstan was between Alashankow in China and Dostyk station in Kazakhstan. This 460-km line to Urumqi in Xinjiang and Alataw Pass, where it connects to Kazakhstan's railways, represented China's only currently operational rail link with Central Asia.

The rail crossing at Alataw Pass handles more than 15 million tonnes of freight each year with almost twice as much cargo moving westward from China as eastward. So far, more than 150 million tonnes of freight have been transported through the Alashankou/Dostyk crossing since it began operation in 1991. On June 14, 2010, a freight train carrying 45 tonnes of liquefied natural gas crossed the Chinese-Kazakhistani border at the Alashankou/Dostyk checkpoint en route to delivery to the Dushanzi petrochemical plant in the northern Xinjiang Uygur Autonomous Region. The shipment marked the first time that China imported energy resources from Central Asia by rail.

Last April saw the official opening of the first transnational free-trade center in Central Asia, located along the cross-border river near the Xinjiang village of Horgos. This China-Kazakhstan International Border Cooperation Center occupies 3.43 square kilometers of land inside northwest China's Xinjiang and 1.85 square kilometers on the Kazakh side. The Horgos center has been developed into a "free port" with tax reimbursement for exports, duty-free purchases for visitors and provisions for 30-day visa-free stays.

This special economic zone supports trade negotiation, financial services, commodity display and sales, warehousing of goods, transportation, hotels, restaurants, shopping, entertainment and tourism. Additionally, border crossing procedures have been improved in this cooperation zone, making it easier and faster for border inspection authorities and civilians to navigate within this area.

Construction also will begin this year on a high-speed railway line between Kazakhstan's capital, Astana, and the former capital Almaty, which is still most important commercial hub, benefiting from its proximity to China. Trains along this 1,050-kilometer line, which has many bridges and elevated sections, are projected to travel as fast as 350 km/h. This will reduce the travel time for passengers to a four-hour journey. China's will own a 30% share of this US$16 billion project.

Energy the driving force
Although security considerations initially dominated Beijing's policies toward Kazakhstan and its other newly-independent Central Asian neighbors, economic and especially energy concerns have become increasingly important.

Thanks to its energy riches, Kazakhstan has become China's most important economic partner in Central Asia. Commercial ties between Kazakhstan and China were minimal during the first decade of Kazakhstan's independence due to the economic chaos in Central Asia following the breakup of the integrated Soviet economy as well as the legacy effect of the security barriers erected along the sealed Sino-Soviet frontier during the Cold War.

The overlapping ethnic groups between the two countries helped launch the initial commercial ties between Kazakhstan and China, overcoming those original barriers. During the last decade, Kazakhstan has achieved rapid economic growth rates due largely to the soaring value of oil exports. These developments have raised the country's per capita gross national income to around $12,000 and have helped position Astana as a key Chinese partner.

In a 50-50 joint venture, the Chinese National Petroleum Corporation (CNCP) and KazMunaiGaz built an oil pipeline from Kazakhstan's Atyrau port along the Caspian coast to Alashankou in China's northwest Xinjiang region. When it began operating on a limited basis in December 2005, the delivery marked the first eastward flow of Central Asian oil and China's first receipt of imported oil by pipeline. Now, one fifth of Kazakhstan's oil flows to China.

In 2010, the Central Asia-China pipeline began transporting natural gas from Turkmenistan through Uzbekistan and Kazakhstan to China. This 2,100-kilometer gas pipeline is expected to deliver around 40 billion cubic meters (bcm) annually by 2015.

In another joint CNCP-KazMunaiGaz project, Astana has invested $130 million to augment a $1.8-billion loan from the China Development Bank, to construct a 1,500-km natural gas pipeline from Beyneu in western Kazakhstan to Bozoi Shymkent. From there, the 50-50 owned Beineu-Shymkent Gas Pipeline LLP will connect with the Central Asia-China gas pipeline as well as provide gas to southern Kazakhstan, a region that must currently import gas.

It also plans to construct a Pipeline "C" that would provide a third Kazakhstani gas pipeline into China. When all three conduits are fully operational in 2015, they will deliver up to 60 billion cubic meters of gas to China annually - or about half of the PRC's anticipated demand for imported gas then. At the end of 2012, the CNCP opened the last section of its $22 billion, 8,704-km pipeline, which can carry as much as 30 bcm from Huoerguos on the China-Kazakhstan border in northwest Xinjiang Uygur region to Shanghai, Guangzhou and Hong Kong.

The volume of Kazakhstan's trade with China now exceeds that with Russia for the first time in centuries, and China has been Kazakhstan's second-largest trading partner since 2009. Two-way trade between the two countries increased from $1.29 billion in 2001 to $33 billion in 2012 - or almost one third of all Kazakhstan's foreign trade.

At least for now, China is surpassed by only the European Union, which has almost a 40% collective share in Kazakhstan's total external trade due to its purchases of Kazakh oil. On December 8, 2012, during discussions with visiting Chinese Vice Premier Wang Qishan in Astana, President Nursultan Nazarbayev said Kazakhstan will intensify its efforts to finish the natural gas pipeline that is being co-built with China by 2014 in order to increase natural gas exports to China.

Bilateral economic ties should expand further given that both countries regularly enjoy some of the world's fastest economic growth rates and China's growing demand for Kazakhstani's rising exports of oil, natural gas and uranium. When Kazakh Prime Minister Karim Masimov met with Premier Wen Jiabao on April 9, 2008, he stressed Astana's commitment to enhancing bilateral commerce through infrastructure development, specifically citing the need to improve Kazakhstan's ports, customs and banking systems, railways, highways and other commercial networks involving China.

That month, the two governments signed an Action Plan for Cooperation designed to diversify bilateral trade beyond commodities and included 20 development projects in agriculture, new technologies, cross-border trade, transportation and communication. [2] When he visited Beijing in last June, Nazarbayev said he "welcomes Chinese investment in the Central Asian country's transport infrastructure, and hopes that the pace of the trans-border railway and highway projects between the two countries will be quickened".

Three months later, Premier Wen called for China and Kazakhstan to accelerate their cooperation in trade, infrastructure construction and other economic areas. The two governments recently set the goal of raising bilateral trade to $40 billion by 2015.

Given their expanding trade ties, it is unsurprising that China's railroad building efforts have primarily focused on expanding Kazakh transit capacity. Beijing's ambitions, however, extend far beyond that. China has been anchoring the new 11,870-km Eurasian Land Bridge that extends from Lianyungang city to Rotterdam, a major West European port. Using this uninterrupted railroad route through Central Asia, Russia and Europe allows cargo to travel five times faster from China to Western Europe than by ship.

Given its higher transportation costs, the rail route is most suitable for high-value-added freight such as electronic and mechanical goods. Beijing has been using its leading role in the Shanghai Cooperation Organization and other multinational institutions to mobilize multinational support behind these Eurasian transportation and other infrastructure projects as it tries to move up the value-added chain.

China and Kazakhstan also are major players in the 8,700-km Western Europe-Western China international transport corridor, which will become the shortest road transport link between Central Asian countries and Europe. Once completed in late 2013, containers will take just two weeks to move from China's eastern seaboard to Europe, three times faster than if they went by sea.

The European Bank for Reconstruction and Development, the World Bank, the Asian Development Bank and the Islamic Development Bank are providing millions dollars in funding for the highway. More than 30,000 Kazakhstani workers are helping construct a 1,734 km stretch that passes through four regions of Kazakhstan (Aktobe, Kyzylorda, Zhambyl and South Kazakhstan). Nazarbayev called the highway the "construction of the century" in his 2012 State of the Nation address.

In his Kazakhstan-2050 national development strategy announced last month, Nazarbayev said the existing projects should double the transit capacity across Kazakhstan by 2020 and set a new goal of increasing this capacity 10-fold by 2050. Nazarbayev also declared Kazakhstan should help develop key transit hubs throughout Eurasia and beyond.

Remaining challenges
China is making progress in improving its transportation links with Greater Central Asia. The existing and proposed near-term connections between China and its western neighbors will still service only a small share of China's foreign commerce, which will likely remain dominated by containerized cargo shipping by sea. Much additional progress is needed in this area to achieve the higher levels of bilateral commerce sought in both Astana and Beijing.

In addition to the underdeveloped economic infrastructure connecting the two sides, other impediments to expanded commercial exchanges include unsupportive visa policies, special regulations on Chinese consumer products, corrupt commercial practices in both countries and Kazakhstan's absence from the World Trade Organization (WTO).

Ironically, one factor discouraging Kazakhstan's rapid entry into the WTO has been Kazakh concerns about having their national industries devastated by Chinese competition in the absence of protective barriers - as happened with neighboring Kyrgyzstan.

Kazakhstan's close economic ties with Russia also have disrupted some Sino-Kazakh economic ties. On the one hand, much Russia-China trade goes through Kazakhstan. On the other hand, Russia has sought to prevent the newly implemented Russia-Kazakhstan-Belarus Customs Union from serving as a backdoor for the smuggling of cheap Chinese goods into Russia by pressing Kazakhstan to tighten controls at the Sino-Kazakh border before Russia and Kazakhstan eliminated their joint checkpoints.

Some Kazakhstanis complain they can no longer buy cheap Chinese imports and must now spend more to purchase often inferior quality goods from Russia and Belarus. Russian President Vladimir Putin's proposed Eurasian Union, which Astana has said it will join, could erect further economic and perhaps other barriers between China and Kazakhstan.

Conclusion
Both China and Kazakhstan benefit from their cooperation in trade, transport, and energy; however, these developments do not portend a deeper, strategic alliance between the two countries - both of which are strongly committed to their independence.

The Kazakh government is especially keen to maintain balanced relations between China, Russia, Europe and the United States to avoid domination by any single actor. Chinese leaders also have been restrained about antagonizing Russia by appearing to threaten Moscow's interests in the region. In many cases, these coincide, or at least do not conflict, with China's core regional interests.

Yet, this harmony also results from Kazakhstan and the rest of Central Asia's being of lower strategic priority for Beijing than for Moscow. China's expanding interest in securing Central Asian energy and economic opportunities could lead Beijing to reconsider its policy of regional deference.

The Chinese authorities are still developing their strategies, tactics and capabilities to defend their growing foreign economic assets, which in Central Asia include energy pipelines and the foreign operations of several major companies.

Central Asian as well as Chinese and Russian policymakers would prefer if Beijing could rely on the local authorities, supported by Moscow, to protect these assets, but the failure of these non-Chinese actors might compel all parties to accept, if reluctantly, a large and enduring Chinese security presence in their region.

Notes:
1. The Korgas Pass is 200 km from Astana, 670 km from Urumqi, and less than 100 km from Yining, the principal city in China's Ili Kazakh autonomous prefecture.
2. Rouben Azizian and Elnara Bainazarova, "Eurasian Response to China's Rise: Russia and Kazakhstan in Search of Optimal China Policy," Asian Politics & Policy, Vol. 4, No. 3, 2012, pp. 377 - 399.