China’s High-Speed Rail, the world’s longest high-speed railway network, is now losing $24 million per day with a reported debt of $1.8 trillion

[GS Zhou]

P&L of the actual CR: China State Railway Group Co., Ltd.

Its operating profit declines from RMB 28.9 billion in 2019, to -30.3 billion in 2020; obviously the traffic decline due to covid is impacting its business. I guess railway operators around the world are all facing the same issue.

 

[lcloo]

But this is not the actual CR. The full name of actual CR is: China State Railway Group Co., Ltd, or 中国国家铁路集团有限公司.

The company you quoted refers to 中国中铁股份有限公司, which is focusing on railway engineering & construction.

Yes, I made a mistake there, but my subsequents post on CR's financial statements are correct.

2020 loss is expected due to COVID-19. In 2021 they have recovered. Also note that RMB 18 billion Depreciation aka amortization for year 2020 is a contributor to net loss. Depreciation is intangible expenses, meaning they are paper losses that do not involved in cash transactions.

 

[Ahmet Pasha]

Maybe the village labor class has settled in cities and doesn't want to commute/visit their home towns anymore?

 

[Apollon]

Do those trains have 1st class and restaurants on board?

 

[lcloo]

Do those trains have 1st class and restaurants on board?

They have business and first class and second class (economy class) just like on airliners, and yes they have restaurant too.

First class seats

Maybe the village labor class has settled in cities and doesn't want to commute/visit their home towns anymore?

Ticket sales indicate otherwise.

 

[FairAndUnbiased]

View attachment 793194

View attachment 793195

This is meaningless, stock equity vs property values says nothing. It could be that Chinese stock market is simply less valuable than expected.

And it has nothing to do with railroad debt being written off, and that is even assuming that the railroad cannot pay for it's debt through operational income.

Previous posters have also noted that CRC is overall profitable, thus the money loss never becomes debt in the first place.

 

[Cheehg]

Chinese HSR is a national strategy for below reasons:
Energy security. Trains use electricity instead of oil.
China needs more railway for freight and intercity passenger transportation. It is wise to build new railway with future development. HSR can be used for passagers to release the capacity from legacy lines which can be used for freight.
HSR to replace short distance domestic airlines and longer distance intercity buses. HSR is more environmental friendly.
Chinese HSR is only 10 years old. Even that the initial 8 trunk lines are profitable. Normally 20% of the lines carrying 80% of the volume. Most railway systems in the world are the same.
Chinese national railway company understands the purpose of HSR. The strategy is to balance the lose from passenger business by freight business. USA and Canada railway companies abandoned passenger business because it doesn't make profit. So they created government subsided passenger railway companies. But Europe, China, India, Japan and some other countries see passenger business as benefits of the whole society.
If China waits another 10-20 years to build HSR, the costs will be too expensive. Look at UK's HS2, they discussed and discussed over 10 years trying to save penny but in the end of day the costs go up from 30 billions to 100 billions.
The article used Japanese and French HSR as good examples but little he knows the Japanese and French government had to take over the debts and create a favorable conditions for operating companies to run. SNCF and JR makes profits but the costs of construction of the HSR are from National and local governments. China can easily separate infrastructure and operations then the books look good. But it doesn't change anything. In the case of JR, does Japanese know their tax money is used to build HSR but investors of JR take advantage?

 

[Mista]

This is meaningless, stock equity vs property values says nothing. It could be that Chinese stock market is simply less valuable than expected.

And it has nothing to do with railroad debt being written off, and that is even assuming that the railroad cannot pay for it's debt through operational income.

Previous posters have also noted that CRC is overall profitable, thus the money loss never becomes debt in the first place.

Why did you change the subject?

I've said that comparing HSR debt to Evergrande debt is stupid.

My reply was pertaining to your point that China can simply print money without implications, which is obviously nonsense. It's just chest-thumping.

We can just print our way out of it and it would never cause inflation because China is dominant industrially.

Nonsense lol. Why even collect taxes when you can just print money and not cause inflation? China should abolish taxes and return the revenue from land sales to the people according to your logic lmao.

 

[FairAndUnbiased]

Why did you change the subject?

I've said that comparing HSR debt to Evergrande debt is stupid.

My reply was pertaining to your point that China can simply print money without implications, which is obviously nonsense. It's just chest-thumping.

Money printing only becomes an inflationary problem if China has already maximized its productivity. If money is injected into an economy that's still growing and is limited by capital and not physical production, then it creates economic activity and is not inflationary. In that case, printed money creates value of economic activity greater than its nominal value. On the other hand, if productivity has been maximized, then printed money creates value of economic activity lower than nominal value. That causes inflation.

This is why US GDP grows by ~2% despite $6 trillion USD printed (representing ~1/3 GDP), but in China the economy is likely to grow 8% while only spending 4.5% GDP on stimulus.

Property prices are also conflated with real demand for property, which is likely to be high in crowded, high demand markets. Aggregate property value is also meaningless in a market with multiple global tier cities, why don't they show a regional breakdown?

 

[Mista]

Money printing only becomes an inflationary problem if China has already maximized its productivity. If money is injected into an economy that's still growing and is limited by capital and not physical production, then it creates economic activity and is not inflationary. In that case, printed money creates value of economic activity greater than its nominal value. On the other hand, if productivity has been maximized, then printed money creates value of economic activity lower than nominal value. That causes inflation.

This is why US GDP grows by ~2% despite $6 trillion USD printed (representing ~1/3 GDP), but in China the economy is likely to grow 8% while only spending 4.5% GDP on stimulus.

Property prices are also conflated with real demand for property, which is likely to be high in crowded, high demand markets. Aggregate property value is also meaningless in a market with multiple global tier cities, why don't they show a regional breakdown?

If you think you can print money without implications, so be it. I'm not participating in this silly argument made by someone who's chest-thumping lmao.

 

[Globenim]

China Insights

lol thats just a new brand name for the same old U.S. regime funded and controlled Epoch Times, New Tang Dynasty, China Uncensored, China Unscripted disinfo garbage pandering to the bottom end of societies bellcurve.

Their first three Facebook posts are propagating the U.S. regimes Falun Gong cult money and interest laundering machine.
Their first report on YouTube is some superstitious bullshit about bad omens of glowing comets over China.
Their so called "former Chinese national television reporters, veteran journalists and editors of North American Chinese media" means its the exact same old U.S. disinfo and fakenews network operating under the hundred NTD Television branches and affiliates in the U.S.A.

And their "research" on this "article" is just parroting some Indian troll site
Which is just picking up the garbage from U.S. based Financial Times and Nikkei, meaning they just went full circle with the "Japanese owned" U.S. regime propaganda campaign.

Shooting the messenger is the only appropiate answer for these vultures.

 

[FairAndUnbiased]

If you think you can print money without implications, so be it. I'm not participating in this silly argument made by someone who's chest-thumping lmao.

This is a well established mainstream US economic ideology called modern monetary theory. How come you suddenly have doubts about a money printing proposal, and not to US actual money printing?