Not mentioned in the article, especially for the US audience, is that high-speed rail is a much more pleasant way to travel than flying. You can arrive at the high-speed rail station a half-hour before departure (usually via modern, fast, reliable, clean, safe subway system), much simpler security measures, only need your ID for boarding, start up so smooth you hardly know you're moving, smooth ride, comfortable seats, quiet, electrical power at the seat, ability to get up and walk around, no turbulence, wireless connectivity, cheaper (for "economy", and the next tier up is about the same cost as flying), no weather delays. For longer distances flying is faster and common. But for short and intermediate distances, the high-speed rail is the preferred way to travel.
In Japan, you don't need to show ID or go through any security at all, and you can show up 5 minutes before departure!
That said, the problem with HSR in a country with poor transit (like the U.S.) is that once you show up in your destination city, it's hard to get around without driving.
If this were true, the lack of transit is also why the U.S. doesn't have a viable commercial aviation sector since no one can get to or from the airport.
The problem with the "good transit" truism is that local transit and intercity transportation of any kind (air, train, coach, ship or ferry) can operate independent of each other. They're coincidences, and not conditions. In cities with good transit, most of the ridership is generated every day by locals within the service area. A connection to an intercity service makes up a small part of the transit system's overall ridership. (Say, half of people who exit at one of Tokyo's key terminals get on the subway. That's 50% of the HSR system's ridership. From the standpoint of the subway operator, transfers from the HSR might only account for 5% of total ridership, with the rest generated by residents of Tokyo traveling locally.)
Riders will find a way with the options available to them.
As for the question of funding local transit, keep in mind that:
1) Most of the costs of local transit are operations, most operations costs are labor, and most labor costs are the driver.
2) The benefits of service delivered accrue locally within the transit system. The network effects are limited to the coverage area and the scope of service. There's zero benefit if the transit system doesn't serve the market. The network effects of an intercity system cover every access point within the network.
3) Independent of intercity service, what kind of argument can you make for funding local transit services to fund everyday needs of work, school, shopping, healthcare, fun?
IME in Japan, Tokyo-Hiroshima trips or shorter are nicer on the train, and anything longer is better flown. (Confounded by Hiroshima's airport being especially far away and especially scary since it's on the edge of a cliff.)
What Americans don't realize about Japanese HSR is that it costs /more/ than flying, and since it's nicer and more convenient is best thought of as business class travel. The local systems are what's so good there.
Yeah, I live in Tokyo and taking the shinkansen to Osaka or Kyoto (and back) is roughly twice as expensive as flying. Door-to-door time is probably about the same if it's Haneda and faster if I have to get all the way out to Narita.
It's worth it primarily for the ability to rock up and buy a ticket any time, plus what amounts to business-class legroom.
I think it was Freddie DeBoer that recently wrote about how progressive environmental regulation was making it impossible to actually build anything. Noah here has talked about now nonprofits are sopping up large percentages of the money we allocate to new projects and ideas.
In practice, this means that in the time America builds 40 miles of high speed rail track in Nowherev-ille, CA, the Chinese build out hundreds of miles of functional track connecting most of their major cities. (I live CA so am very familiar with the CA High Speed Rail boondoggle.) I don't care what your politics are, whether you're a Bernie-bros, a rabid libertarian, a Amari integralist, a BLM cultural Marxist, or an Amish escapist... everyone must acknowledge that this is a problem.
China has a "screw private property, living wages, human rights, safety, and environmental concerns, and just build the darn thing" approach. We have a "study it to death but for God's sake don't actually do anything" approach. Neither approach is efficient. But if your goal is to create things that might improve quality of life, the former is at least effective.
Francis Fukuyama calls the American approach a vetocracy -- our government architecture has so many veto points within it that as a consequence, possessing veto power has become the propitious political outcome.
"Doing something" is anything that manages to run the veto (and judicial) gauntlet. The practical outcome is a piece of metal on a pole that should have been a bus shelter. That outcome in L.A., when scaled to every political decision and outcome, is America. We are a sombrita nation.
I wonder if folks understand the implications of China's manufacturing capabilities from both speed and quantity perspectives on defense. The West has struggled to ramp up production for Ukraine and is falling further and further behind China's naval production. Do not some of the same impediments to our inability to build things for the civilian economy mean we are and will struggle mightily vis a vis China if a conflict were to occur. Unlike WW2, we would be the Axis (Germans made the best stuff but not enough of it) and the Chinese the Allies from a production standpoint.
As you point out, rapid resource deployment is no guarantee of capital efficiency. Have you seen good analysis of over-building driven by “the madness of crowds” like 19th century UK and US railroad construction vs “the madness of elites” in overbuilding China’s high-speed rail network?
The madness you describe is something transit planning consultant Jarrett Walker describes as the ridership-coverage tradeoff. This is a basics post, and Walker is remarkably good in communicating a sophisticated concept into plain English.
Ridership is any service with proven demand. Coverage is any service with low demand put in place for other goals, such as building out a network, fair share, or serving as feeders to the ridership lines.
Because budgets and other resources (labor, vehicles, fuel, etc.) will always be fixed regardless of scale, ridership and coverage services must compete for these resources in a classic tradeoff example (a vehicle on a ridership route cannot physically serve a coverage route simultaneously). Also, ridership and coverage represent extreme ends of a spectrum, and it's up to decision makers and riders to determine the appropriate share for each service. Thinking about it this way makes it clearer to see that ridership and coverage are symbiotic, working to support each other.
Every kind of network (transportation, utility, internet, etc.) will have divergent segments and nodes of productivity. It's not madness but the inherent laws of physics and economics that makes this so.
Internally, for China, it's been a race against time, which so far they are winning handily. The CCP took a big chance in opening up some 30 years ago, and the bet has paid off in ensuring the safety of the party as the sole ruling party -- probably at least for the next generation -- because of this economic success.
Externally, for China, there are still significant challenges ahead, as it moves to establish a stable and secure position in the world. There has been a relatively stable world order since about 1990, which in effect sponsored China's advancement. It's notable, for instance, that China preceded Russia in being accepted into the WTO.
Although "the world order" is not a static "thing," the question for everyone is whether we see China as basically interested in preserving this highly favorable world order, whether we see ourselves (the developed "West") as trusting this continued order as suitable to ourselves, as well as whether the rest of the world also thinks it's a suitable mechanism for their advancement.
Is mostly everybody aware of just how good -- comparatively speaking -- the past 40 years or so have been?
The Chinese high speed train network reaches Vientiane, the capital of Laos and practically on the Thai border. Are there any other plans for high speed trains across the border? To Mongolia and Russia?
What impressed me in Japan was the frequency: every ten minutes from Tokyo southbound! (dense population, sure, but not so different from Italy where it’s once or twice per hour and where you need one line to cover Turin to Naples)
The elephant in the room is the CO2 produced by this Great Leap Forward. China is now the largest emitter with most of its power generated by coal. As EV numbers increase so will CO2. Show us the math and raw numbers in 10 years.
Very true, BUT, ultimately cheap solar and EVs are the only thing that will enable us to beat climate change. So if China can replace its coal industry, it will have basically saved the world.
Additionally, electricity generation from solar and wind is expanding much, much faster than from additional coal powered electricity. As the solar and wind generation increases China will be able to stop building coal plants and retire more of the legacy coal plants.
That’s a large exaggeration, and unclear what is meant by beating climate change. Reducing atmospheric CO2 emissions will slow warming far in the future, but cars are responsible now for about 10% of global emissions, if all existing petroleum fueled cars were destroyed and replaced with EVs emissions would go down by less than that (depending on what percentage of electricity generation is zero emission, hardly making a dent in emissions and thus warming. Solar also cannot
Solar cannot be the only thing since it is inherently intermittent, nuclear or geothermal are better solutions, battery storage needed by solar will be unwieldy since EVs are generally charged overnight when solar output is zero.
Solar, nuclear, geothermal and fossil fuels can co-exist, though.
Better doesn't mean nuclear/geothermal/etc. can exist only in the absence of solar and wind. Solar, wind and geothermal are location-dependent and the conditions for their generation can't be created or relocated except naturally.
Nuclear is going to be one of those things, like working from home in the pandemic, where society will be dragged into it if the alternative means degrading their standard of living.
The path to sustainable energy is happening now. China plans to be free of petroleum transport with 1800 GW of power by 2030. They claim to be 2 years ahead of schedule.
There are other environmental toxins released with fossil fuels besides CO2. There is mercury and other heavy metals.
For certain fossil fuels will not be eliminated as air travel and cargo sea transportation will still require them.
And uranium, Noah. I know you love solar panels, but until we learn how to store electrons cheaply, you still need on-demand power sources, and that means coal, natural gas, or nuke plants.
EVs are a reduction of the problem, only a half-step. They're still cars, still inefficient at what they accomplish, and a negative for climate change and habitat loss when we build cities around them.
Meanwhile, China's coal is just one piece (albeit significant) of a much larger puzzle.
One of the bottle necks of wind and solar generation is battery storage of power to even the supply demand. China's massive strides in battery manufacturing and research combined with production capabilities of solar and wind devices can be the breakthrough needed for an untethering to carbon-based energy production not only for transportation but for the energy grid. All the components are there, China only needs to do its magic and bring the production to scale for 1.4 billion citizens.
Measuring the profitability of high speed trains makes as much sense as measuring the profitability of interstate highways. It’s just transportation infrastructure, a public good.
It's not clear that the public-goods component of high-speed rail is particularly large. Because the transportation is point-to-point over long distances, it's more like a turnpike than an interstate; since you can't stop and get off except at the terminals, it doesn't do much to increase economic activity along its route, like an interstate does. In addition, interstates form a very dense network with local roads, but since high-speed rail is point-to-point, the number of network nodes it adds is not very large. So I don't think the network externality is that big either. So I think high-speed trains are much more of a private good than a public good.
Time to refresh your memory on the definition of public goods: both non-rivalrous AND non-excludable, like clean air or national defense.
Having taken the Shinkansen between Tokyo and Kyoto recently, I can assure you the high speed rail fits neither of these: some trains are fully booked, and anyone who hasn’t bought a ticket is excluded from the service.
"China got Japanese and European companies to hand over their technology in exchange for the unspoken (and ultimately unfulfilled) promise of big Chinese contracts." Translation: China conned Japan and Europe.
A joke among the older adherents to The Republic of China (now based on the island of Taiwan) was that Mau Dz Dung, was really Mau Dzei Dung, *Dzei being translated as *thief. Sidebar: The Yale system of Romanization was designed in part to allow American English speakers to quickly approximate the sounds of Mandarin.
An excellent review of China's development of specific industries. My first question is, "How reliable are the numbers you are quoting?" China has complete control over any numbers published, and it is hard to accept anything from a government that openly steals technology and intellectual property from others. Dictatorships can be very efficient in certain economic areas, but how much in the way of personal freedom are we willing to sacrifice to be more efficient?
You barely mentioned one of our most significant weaknesses - this obsession with quarterly results. Due to this short-sightedness, commercial R&D is down, and much R&D is done by the government. This leads to political in-fighting and a lack of dependable long-term financing. China's economic development has been remarkable, but at what cost to the lives of its citizens?
I almost threw-up in my mouth when I read this line...”China’s solar panel makers were unprofitable and subsidized a decade ago, but now make healthy profits.”
To write this and completely ignore the human rights abuses and slave labor of the ethnic minorities in Xinjiang where almost all of the solar panel supply chain exists is negligent to the nth degree.
Yes, China still has a long way to go. Renewables are currently about 28% of electrical generation, and target is 33% by 2025. Over half of all new electrical capacity is renewable, in Q1 of this year, over 80% of new capacity was renewable. Noah is correct that they are installing a lot, and you're correct that they have a long way to go.
Spot on! For certain this is an article documenting government efficiency and organizational prowess. As beneficial as these factors are in mass manufacturing, it has been noted that these same characteristics can be disastrous when applied to other aspects under government control. The “just take it” attitude is what frightens the world. It’s sad that authoritarian type government goes through these cycles, as Dan previously described.
Very informative re China, but nostalgic comparisons with past accomplishments by the US and other democracies seem misplaced. The key to the Chinese high speed rail, alternative energy, and other accomplishments you document has been central direction and control without any need to create or satisfy market or social/political expectations. Efforts by democracies comparable in scale are only feasible and have only occurred in wartime. The one peacetime example in modern US history, the interstate highway system, was in fact largely motivated by military concerns -- our memory of transcontinental logistics struggles in World War II and our fears of impending war with the Soviet Union. (France's high speed rail system and nuclear energy network might qualify, but I don't know enough about them to judge.) Capitalism is inherently chaotic and often inefficient in the short term, but generally delivers greater value over time than centrally directed resource mobilizations that, in peacetime, are the exclusive domain of totalitarian states. This is especially true now that the market is increasingly held to account by social and political forces for its inconvenient "externalities." As you suggest, we should monitor China's direction and progress, but we shouldn't be overly impressed by their short term accomplishments. As you also suggested, at least some of their mobilizations comparable in scale and ambition to their energy and auto projects, such as their "Belt and Road" initiative, appear less impressive as time goes on. Until validated by history, I am skeptical about the long term future of all of their current mobilization "accomplishments" and their earlier chip industry "accomplishment" which is now being undercut by India and Southeast Asian nations and which, despite a concerted industrial espionage program, never made a dent in US dominance of high end chip design and production.
Capitalism tends to have the advantage in terms of resource allocation. Creative destruction, etc. In a planned or semi-planned economy, resource allocation is political. Failing projects are propped up if their architects need to save face. Politicians are entrusted to make the right bets on emerging technologies, etc.
A lot of the anxiety around China comes from the thinking that they will try to solve the same problems as the West, but will be more effective due to mass mobilization. I don't buy that. I suspect the CCP will waste untold trillions on worthless projects. I don't think the crucial next gen technologies are as obvious as the political class thinks they are.
Nowadays, you hear mostly about semiconductors, AI, etc. as the next big things. These are better described as the last big things. The next big thing is whatever the next class of Stanford grads is working on, not what Biden or Xi proclaims.
Moreover, technological advancement can come from unexpected places. The GPUs that power modern AI systems were developed exclusively for entertainment- video games- and repurposed a decade later for machine learning algos. In China, they have introduced laws in recent years to restrict video games, which are viewed as unwanted distractions that reduce Chinese power. This paternalistic and limitlessly self-confident disposition of the CCP is anathema to innovation.
Not mentioned in the article, especially for the US audience, is that high-speed rail is a much more pleasant way to travel than flying. You can arrive at the high-speed rail station a half-hour before departure (usually via modern, fast, reliable, clean, safe subway system), much simpler security measures, only need your ID for boarding, start up so smooth you hardly know you're moving, smooth ride, comfortable seats, quiet, electrical power at the seat, ability to get up and walk around, no turbulence, wireless connectivity, cheaper (for "economy", and the next tier up is about the same cost as flying), no weather delays. For longer distances flying is faster and common. But for short and intermediate distances, the high-speed rail is the preferred way to travel.
In Japan, you don't need to show ID or go through any security at all, and you can show up 5 minutes before departure!
That said, the problem with HSR in a country with poor transit (like the U.S.) is that once you show up in your destination city, it's hard to get around without driving.
If this were true, the lack of transit is also why the U.S. doesn't have a viable commercial aviation sector since no one can get to or from the airport.
The problem with the "good transit" truism is that local transit and intercity transportation of any kind (air, train, coach, ship or ferry) can operate independent of each other. They're coincidences, and not conditions. In cities with good transit, most of the ridership is generated every day by locals within the service area. A connection to an intercity service makes up a small part of the transit system's overall ridership. (Say, half of people who exit at one of Tokyo's key terminals get on the subway. That's 50% of the HSR system's ridership. From the standpoint of the subway operator, transfers from the HSR might only account for 5% of total ridership, with the rest generated by residents of Tokyo traveling locally.)
Riders will find a way with the options available to them.
As for the question of funding local transit, keep in mind that:
1) Most of the costs of local transit are operations, most operations costs are labor, and most labor costs are the driver.
2) The benefits of service delivered accrue locally within the transit system. The network effects are limited to the coverage area and the scope of service. There's zero benefit if the transit system doesn't serve the market. The network effects of an intercity system cover every access point within the network.
3) Independent of intercity service, what kind of argument can you make for funding local transit services to fund everyday needs of work, school, shopping, healthcare, fun?
IME in Japan, Tokyo-Hiroshima trips or shorter are nicer on the train, and anything longer is better flown. (Confounded by Hiroshima's airport being especially far away and especially scary since it's on the edge of a cliff.)
What Americans don't realize about Japanese HSR is that it costs /more/ than flying, and since it's nicer and more convenient is best thought of as business class travel. The local systems are what's so good there.
Yeah, I live in Tokyo and taking the shinkansen to Osaka or Kyoto (and back) is roughly twice as expensive as flying. Door-to-door time is probably about the same if it's Haneda and faster if I have to get all the way out to Narita.
It's worth it primarily for the ability to rock up and buy a ticket any time, plus what amounts to business-class legroom.
The airlines never did solve the cattle class problem.
I think it was Freddie DeBoer that recently wrote about how progressive environmental regulation was making it impossible to actually build anything. Noah here has talked about now nonprofits are sopping up large percentages of the money we allocate to new projects and ideas.
In practice, this means that in the time America builds 40 miles of high speed rail track in Nowherev-ille, CA, the Chinese build out hundreds of miles of functional track connecting most of their major cities. (I live CA so am very familiar with the CA High Speed Rail boondoggle.) I don't care what your politics are, whether you're a Bernie-bros, a rabid libertarian, a Amari integralist, a BLM cultural Marxist, or an Amish escapist... everyone must acknowledge that this is a problem.
China has a "screw private property, living wages, human rights, safety, and environmental concerns, and just build the darn thing" approach. We have a "study it to death but for God's sake don't actually do anything" approach. Neither approach is efficient. But if your goal is to create things that might improve quality of life, the former is at least effective.
Francis Fukuyama calls the American approach a vetocracy -- our government architecture has so many veto points within it that as a consequence, possessing veto power has become the propitious political outcome.
"Doing something" is anything that manages to run the veto (and judicial) gauntlet. The practical outcome is a piece of metal on a pole that should have been a bus shelter. That outcome in L.A., when scaled to every political decision and outcome, is America. We are a sombrita nation.
I wonder if folks understand the implications of China's manufacturing capabilities from both speed and quantity perspectives on defense. The West has struggled to ramp up production for Ukraine and is falling further and further behind China's naval production. Do not some of the same impediments to our inability to build things for the civilian economy mean we are and will struggle mightily vis a vis China if a conflict were to occur. Unlike WW2, we would be the Axis (Germans made the best stuff but not enough of it) and the Chinese the Allies from a production standpoint.
Noah has discussed this at length in other posts.
I have no doubt Mr. Smith gets it, just not sure most others do.
It was definitely a subtext of this post...
As you point out, rapid resource deployment is no guarantee of capital efficiency. Have you seen good analysis of over-building driven by “the madness of crowds” like 19th century UK and US railroad construction vs “the madness of elites” in overbuilding China’s high-speed rail network?
The madness you describe is something transit planning consultant Jarrett Walker describes as the ridership-coverage tradeoff. This is a basics post, and Walker is remarkably good in communicating a sophisticated concept into plain English.
https://humantransit.org/2018/02/basics-the-ridership-coverage-tradeoff.html
Ridership is any service with proven demand. Coverage is any service with low demand put in place for other goals, such as building out a network, fair share, or serving as feeders to the ridership lines.
Because budgets and other resources (labor, vehicles, fuel, etc.) will always be fixed regardless of scale, ridership and coverage services must compete for these resources in a classic tradeoff example (a vehicle on a ridership route cannot physically serve a coverage route simultaneously). Also, ridership and coverage represent extreme ends of a spectrum, and it's up to decision makers and riders to determine the appropriate share for each service. Thinking about it this way makes it clearer to see that ridership and coverage are symbiotic, working to support each other.
Every kind of network (transportation, utility, internet, etc.) will have divergent segments and nodes of productivity. It's not madness but the inherent laws of physics and economics that makes this so.
Rather than rational trade offs among various non-economic goals, I’m thinking of the allocation of economic resources in pursuit of economic gains that a dispassionate observer could have concluded were illusory. Charles Mackay, author of https://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds offers a footnote on the https://en.wikipedia.org/wiki/Railway_Mania in the 19th century UK as an illustration.
See also the US Panic of 1873. https://www.pbs.org/wgbh/americanexperience/features/grant-panic/
I haven't seen a comparison, but that's an interesting topic!
I’m reminded that much 19th century madness included public/private “partnerships.” https://www.cato.org/blog/150-years-boondoggles
Internally, for China, it's been a race against time, which so far they are winning handily. The CCP took a big chance in opening up some 30 years ago, and the bet has paid off in ensuring the safety of the party as the sole ruling party -- probably at least for the next generation -- because of this economic success.
Externally, for China, there are still significant challenges ahead, as it moves to establish a stable and secure position in the world. There has been a relatively stable world order since about 1990, which in effect sponsored China's advancement. It's notable, for instance, that China preceded Russia in being accepted into the WTO.
Although "the world order" is not a static "thing," the question for everyone is whether we see China as basically interested in preserving this highly favorable world order, whether we see ourselves (the developed "West") as trusting this continued order as suitable to ourselves, as well as whether the rest of the world also thinks it's a suitable mechanism for their advancement.
Is mostly everybody aware of just how good -- comparatively speaking -- the past 40 years or so have been?
The Chinese high speed train network reaches Vientiane, the capital of Laos and practically on the Thai border. Are there any other plans for high speed trains across the border? To Mongolia and Russia?
What impressed me in Japan was the frequency: every ten minutes from Tokyo southbound! (dense population, sure, but not so different from Italy where it’s once or twice per hour and where you need one line to cover Turin to Naples)
The elephant in the room is the CO2 produced by this Great Leap Forward. China is now the largest emitter with most of its power generated by coal. As EV numbers increase so will CO2. Show us the math and raw numbers in 10 years.
Very true, BUT, ultimately cheap solar and EVs are the only thing that will enable us to beat climate change. So if China can replace its coal industry, it will have basically saved the world.
Additionally, electricity generation from solar and wind is expanding much, much faster than from additional coal powered electricity. As the solar and wind generation increases China will be able to stop building coal plants and retire more of the legacy coal plants.
Yes. I'm worried that this will take way too long through. China needs to actively retire its coal industry.
That will take time, currently solar is 6% of China electricity generation vs 66% for coal. And of course it only works less than half of the time
That’s a large exaggeration, and unclear what is meant by beating climate change. Reducing atmospheric CO2 emissions will slow warming far in the future, but cars are responsible now for about 10% of global emissions, if all existing petroleum fueled cars were destroyed and replaced with EVs emissions would go down by less than that (depending on what percentage of electricity generation is zero emission, hardly making a dent in emissions and thus warming. Solar also cannot
Solar cannot be the only thing since it is inherently intermittent, nuclear or geothermal are better solutions, battery storage needed by solar will be unwieldy since EVs are generally charged overnight when solar output is zero.
Solar, nuclear, geothermal and fossil fuels can co-exist, though.
Better doesn't mean nuclear/geothermal/etc. can exist only in the absence of solar and wind. Solar, wind and geothermal are location-dependent and the conditions for their generation can't be created or relocated except naturally.
Nuclear is going to be one of those things, like working from home in the pandemic, where society will be dragged into it if the alternative means degrading their standard of living.
The path to sustainable energy is happening now. China plans to be free of petroleum transport with 1800 GW of power by 2030. They claim to be 2 years ahead of schedule.
There are other environmental toxins released with fossil fuels besides CO2. There is mercury and other heavy metals.
For certain fossil fuels will not be eliminated as air travel and cargo sea transportation will still require them.
Tesla megapack is the answer for storage.
https://en.m.wikipedia.org/wiki/Tesla_Megapack
And uranium, Noah. I know you love solar panels, but until we learn how to store electrons cheaply, you still need on-demand power sources, and that means coal, natural gas, or nuke plants.
EVs are a reduction of the problem, only a half-step. They're still cars, still inefficient at what they accomplish, and a negative for climate change and habitat loss when we build cities around them.
Meanwhile, China's coal is just one piece (albeit significant) of a much larger puzzle.
One of the bottle necks of wind and solar generation is battery storage of power to even the supply demand. China's massive strides in battery manufacturing and research combined with production capabilities of solar and wind devices can be the breakthrough needed for an untethering to carbon-based energy production not only for transportation but for the energy grid. All the components are there, China only needs to do its magic and bring the production to scale for 1.4 billion citizens.
a fantastic post, thank you!
Measuring the profitability of high speed trains makes as much sense as measuring the profitability of interstate highways. It’s just transportation infrastructure, a public good.
It's not clear that the public-goods component of high-speed rail is particularly large. Because the transportation is point-to-point over long distances, it's more like a turnpike than an interstate; since you can't stop and get off except at the terminals, it doesn't do much to increase economic activity along its route, like an interstate does. In addition, interstates form a very dense network with local roads, but since high-speed rail is point-to-point, the number of network nodes it adds is not very large. So I don't think the network externality is that big either. So I think high-speed trains are much more of a private good than a public good.
Time to refresh your memory on the definition of public goods: both non-rivalrous AND non-excludable, like clean air or national defense.
Having taken the Shinkansen between Tokyo and Kyoto recently, I can assure you the high speed rail fits neither of these: some trains are fully booked, and anyone who hasn’t bought a ticket is excluded from the service.
Economics of transportation don’t matter? Let’s all fly in private jets then.
"China got Japanese and European companies to hand over their technology in exchange for the unspoken (and ultimately unfulfilled) promise of big Chinese contracts." Translation: China conned Japan and Europe.
A joke among the older adherents to The Republic of China (now based on the island of Taiwan) was that Mau Dz Dung, was really Mau Dzei Dung, *Dzei being translated as *thief. Sidebar: The Yale system of Romanization was designed in part to allow American English speakers to quickly approximate the sounds of Mandarin.
An excellent review of China's development of specific industries. My first question is, "How reliable are the numbers you are quoting?" China has complete control over any numbers published, and it is hard to accept anything from a government that openly steals technology and intellectual property from others. Dictatorships can be very efficient in certain economic areas, but how much in the way of personal freedom are we willing to sacrifice to be more efficient?
You barely mentioned one of our most significant weaknesses - this obsession with quarterly results. Due to this short-sightedness, commercial R&D is down, and much R&D is done by the government. This leads to political in-fighting and a lack of dependable long-term financing. China's economic development has been remarkable, but at what cost to the lives of its citizens?
I agree that China’s development has been remarkable (so many people lifted out of poverty in such a short time frame) but would argue China needs to change its development approach: https://debunkingthedebunkers.substack.com/p/chinas-surging-auto-export-is-not
I almost threw-up in my mouth when I read this line...”China’s solar panel makers were unprofitable and subsidized a decade ago, but now make healthy profits.”
To write this and completely ignore the human rights abuses and slave labor of the ethnic minorities in Xinjiang where almost all of the solar panel supply chain exists is negligent to the nth degree.
In case you need a primer, here you go...https://www.sub-verses.com/p/the-woke-approved-genocide
Another good report here https://thebreakthrough.org/issues/energy/the-solar-industry-and-climate-advocates-cant-wish-chinese-human-rights-abuses-away
Yes, China still has a long way to go. Renewables are currently about 28% of electrical generation, and target is 33% by 2025. Over half of all new electrical capacity is renewable, in Q1 of this year, over 80% of new capacity was renewable. Noah is correct that they are installing a lot, and you're correct that they have a long way to go.
Thanks for the new China series. All good for us to know and consider. And thanks for the book recommendations! Keep them coming!
Spot on! For certain this is an article documenting government efficiency and organizational prowess. As beneficial as these factors are in mass manufacturing, it has been noted that these same characteristics can be disastrous when applied to other aspects under government control. The “just take it” attitude is what frightens the world. It’s sad that authoritarian type government goes through these cycles, as Dan previously described.
Very informative re China, but nostalgic comparisons with past accomplishments by the US and other democracies seem misplaced. The key to the Chinese high speed rail, alternative energy, and other accomplishments you document has been central direction and control without any need to create or satisfy market or social/political expectations. Efforts by democracies comparable in scale are only feasible and have only occurred in wartime. The one peacetime example in modern US history, the interstate highway system, was in fact largely motivated by military concerns -- our memory of transcontinental logistics struggles in World War II and our fears of impending war with the Soviet Union. (France's high speed rail system and nuclear energy network might qualify, but I don't know enough about them to judge.) Capitalism is inherently chaotic and often inefficient in the short term, but generally delivers greater value over time than centrally directed resource mobilizations that, in peacetime, are the exclusive domain of totalitarian states. This is especially true now that the market is increasingly held to account by social and political forces for its inconvenient "externalities." As you suggest, we should monitor China's direction and progress, but we shouldn't be overly impressed by their short term accomplishments. As you also suggested, at least some of their mobilizations comparable in scale and ambition to their energy and auto projects, such as their "Belt and Road" initiative, appear less impressive as time goes on. Until validated by history, I am skeptical about the long term future of all of their current mobilization "accomplishments" and their earlier chip industry "accomplishment" which is now being undercut by India and Southeast Asian nations and which, despite a concerted industrial espionage program, never made a dent in US dominance of high end chip design and production.
Good comment.
Capitalism tends to have the advantage in terms of resource allocation. Creative destruction, etc. In a planned or semi-planned economy, resource allocation is political. Failing projects are propped up if their architects need to save face. Politicians are entrusted to make the right bets on emerging technologies, etc.
A lot of the anxiety around China comes from the thinking that they will try to solve the same problems as the West, but will be more effective due to mass mobilization. I don't buy that. I suspect the CCP will waste untold trillions on worthless projects. I don't think the crucial next gen technologies are as obvious as the political class thinks they are.
Nowadays, you hear mostly about semiconductors, AI, etc. as the next big things. These are better described as the last big things. The next big thing is whatever the next class of Stanford grads is working on, not what Biden or Xi proclaims.
Moreover, technological advancement can come from unexpected places. The GPUs that power modern AI systems were developed exclusively for entertainment- video games- and repurposed a decade later for machine learning algos. In China, they have introduced laws in recent years to restrict video games, which are viewed as unwanted distractions that reduce Chinese power. This paternalistic and limitlessly self-confident disposition of the CCP is anathema to innovation.
Also, this is a consequence of China’s low consumption growth model: https://debunkingthedebunkers.substack.com/p/chinas-surging-auto-export-is-not
Excellent point.