China Has A Debt Problem Three Times Larger Than Evergrande | Economics Explained
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- Опубликовано: 7 дек 2021
- Good infrastructure is one of the greatest investments a country can make. Unfortunately for China, you can have too much of a good thing.
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"If you run the ministry of hammers, every problem starts looking like a nail". I don't know why... but I really love this statement...
Just like this "Every machine is a smoke machine if operated the wrong way"
The Ministry of spanners disapproves, this is totally nuts
One could say that he really nailed it.
Love it!
@@yulu803 The Ministry of drivers also disapproves, clearly they have a few loose screws.
When the borrower owes the lender trillions of dollars, the borrower doesn’t have a problem, the lender does.
Unless the borrower wants to borrow some more money in the future.
Actually when we are talking about trillions dollars it’s not the lender that has a problem. The entire world has a problem.
they both do - and everyone else as well - that is the thing: if you make a risky decision it's never ever risky only for you
Hippity hoppity your country is now my property.
China actually owns America.
I would rather have a country lose $850 billion on an ambitious domestic infrastructure project rather than wasting $2 trillion on fighting cavemen in Afghanistan
Lol your right
More than double and Uncle Joe finally end it.
At least when China goes belly up they still have the infrastructure.
When America goes belly up we have… roads?
or spending 10 trillions dollars to help a group of slow runners better thier lifes but still they does not want stop killling and straling from every other group of not slow runners after all of that....
Good point
Public infrastructure doesn’t need to make direct profit, it also improves profitability and efficiency of the country as a whole. Imagine if we expected all the roads to be profitable with little tolls everywhere. And yet they exist and no one worries about profit.
That's only true for public infrastructure that is directly funded and maintained by the government, like roads. As described in the video, these rail lines are privately owned and were built using a combination of government stimulus, bonds, and private investment. As such, they ARE expected to make a profit to pay back their investors and bond-holders.
@@eboracum It is all state owned. Ridership increase is also well into the double digits as well
Except roads go everywhere. Trains don’t go to your house, but a road does. That’s like saying airlines shouldn’t be profitable
@@todoldtrafford 👍 I believe airlines/airports are supported by government when not profitable due to the economic benefits.
Do government in the world get profitable on every roads and bridges they built for the sakes of the people aka Tax Payers?
When Japan started its very first Shinkansen, it was a massive loss and people criticized nobody wanted a train that fast.
Half a century later, look how it turned out now.
But high speed railway is a commodity product. It can be calculated, planned and operated IF real and objective numbers are used.
Best train system in the world.
The distance to travel from a place to another is very different between China and Japan.
@God's Creature To link people, businesses and transport goods.
Japanese Shinkansen were privately funded and are run by private rail companies.
There’s one thing people keep skipping when they talk about this: the positive externalities of high-speed rail. Many governments choose to operate unprofitable rail lines, because the total value to the economy is higher than the cost…the economy benefits from that additional week of work that a worker used to spend riding busses, now that it only takes a day or two for the same trip on high-speed rail, and it’s easier to send someone to check on an new factory, so issues are more likely to be found, and it’s easier to decide to build one in an area where labor is cheaper, if you know you can get there fast to do the needed supervision and find issues the people on-site may be overlooking.
So, the losses to the Chinese economy as a whole from high-speed rail are smaller than they appear when you look just at the losses by the high-speed rail company itself, and I’d really like to see an economics channel acknowledge the existence of externalities , and that the question of whether high-speed rail is losing China money is more complicated than just whether the high-speed rail operator is losing money.
The system may well be overbuilt, but unless we first examine the externalities, we can’t actually say how big the losses really are to the economy of China.
This is true for public transport in general. A population too poor to buy/maintain a car is bound to a restricted area for a job, if they have no access to affordable public transportation. Connect a deprived area to a bus/Train line, and the average income increases significantly. Connect them via high speed rail to a boom center, and house prices increase significantly, as suddenly this area becomes in commuting range.
Exactly! This isn't designed to be a profitable capitalist railway - its meant to provide a service. We don't say "The US Military lost $750 Billion this year", we spend that money for specific government services.
@@Fastswimmer34 they are treating it like the interstate system in the us or ferry services in other places. But the trick is if its affordable to service loss losing routes. Otherwise they need to rationalize the system to prevent financial issues.
@@abcdedfg8340 It would seem developing the less profitable destinations would help. Converging on massive manufacturing centers rather than propagating centers scattered over China would have massive upsides in other areas. The nation could make the choice rather than glorifying mega centers.
woops i meant to say that developing outlying regions would have other benefits.
lol, it's amazing how certain people (generalized as americans) forgot what "investment" means nowadays, they forgot how their infrastructure was once built to nowhere too, just like their railways and country wide routes, it takes time for it to come to fruition.
Train station built, new town created. Capital flow in, businesses settled in, jobs created, factories built......these have far more impact than train tickets
As someone who works at the company that maintains the dutch railways I think you're missing out on a few very important points:
Railways shouldn't be counted upon as being profitable, the transport they provide (if they are well placed etc.) weighs far heavier then ticket sales ever could. The benefits of being able to transport non car owning citizens all across the country at high speed is incredibly important for a technologically developping country.
Also maintaining railways is far more complex then extually building one. It requires keeping tracks of a meriad of different properties that differ from every piece of metal, cable and cart.
Though I doubt that China looked far enough ahead to see these problems comming which is why the amount of time and money that has to be reinvested in the project will be far larger then they expected in the long run.
I was about to ask this in the comments, thanks for answering. If the alternative to infrastructure investment is fiscal stimulus, why does it matter how unprofitable the rail system is? The alternative is the debt without the benefits of the rail system. I'm curious why they halted additional rail investments. My only guess is that they underestimated the liability that is rail maintenance and are avoiding that future cost.
@@PoorlyThoughtOut It sounds like in terms of accounting, it is now becoming too difficult to maintain these semi-independent rail corporations. Remember, the purpose of these orgs is just to encapsulate controversy in a non-government entity. Something that is "corruption" for a state-owned rail company is just normal business for a private rail company. However, it's an unstable system, because the government wants cheap rail travel all over the country, but private corporations need to make money.
Ultimately, this problem is an illusion. In reality this project is an initiative of the Chinese government, and the government has much more than $1 trillion. The government wants trains, and they will pay for the trains.
@@PoorlyThoughtOut If you want to understand why it matters, then think about this: suppose you, personally, borrow $250,000 and treat yourself to some fiscal stimulus by spending it all consuming things frivolously. Overseas travel, 6 star hotels, top end restaurants, the odd kg of coke etc. When it comes to paying back the debt, you will understand the problem with fiscal stimulus. And if you then decide you would like a home loan, and find you can't get one because of the $250,000 you borrowed to consume, it will be even more apparent.
@@alexanderSydneyOz ahhh.. but that $250k which I frittered away is now being used to employ hotel staff, airline staff and Lamborghinis (for my Coke dealer). In short that money keeps other people employed.
I realise English may not be your mother tongue, so, not to be _too much_ of a stickler on English grammar, but *'than'* is the proper _comparative conjunction_ which should be used in your following statements:
• _"Railways shouldn't be counted upon as being profitable, the transport they provide (if they are well placed etc.) weighs far heavier_ [than] _ticket sales ever could."_
• _"Also maintaining railways is far more complex_ [than] [actually] _building one."_
• _"... which is why the amount of time and money that has to be reinvested in the project will be far larger_ [than] _they expected in the long run."_
*'Then'* is an _order adverb_ in English (or an adjective/noun when referring to a period in time): i.e. _'I'd rather take the train which is far more convenient_ *than* _driving or flying.'_ and _'Getting between Amsterdam and Rotterdam was easier back_ *then* _when trains were more frequent.'_
8:40 - factual error: There is no way that billboard is in mainland China :)
Yep I was just gonna comment on this
LOL you are right.😂
I think the billboard is some kind of message about a controversy about Peng Shuai
Thought this video was about highspeed rail?
dont understand why does everything have to be politicized
@@yiunam1 What do you mean the Chinese government made a famous tennis player disappear. After she accused a high up in the CCP of sexual assault. Of course it is political.
Another thing to account for is how much traffic HSR could displace, both on the roads and in the air. Anything which can reduce the time wasted in traffic jam and flight delays should be tried.
I am a Canadian that has spent over a decade in Canada and the US and over a decade in China (as I spend roughly half of my year in either of the two). This video is clearly done by someone who has never taken (or taken maybe one or two times) the Chinese highspeed rail. This is because the entire video is done with information that is found from news outlets or third party data, but for a lot of the infrastructure, YOU HAVE TO TAKE IT TO TRULY UNDERSTAND IT. An example of this is if I tell you that the New York Public transit faces a $2.5 billion budget deficit, you would think that the transportation department spent a lot of money on infrastructure such as subway and thus is under huge debt. Yet if you are a New Yorker, you know exactly how horrible the subway and MTA services are.
The Chinese highspeed rail makes traveling so convenient that I rarely go by plane. I will give you an example:
From Shanghai to Beijing, it takes 2 hours and 20 minutes to go by plane. However, going by plane means you have to be at the airport at least 1 hour before, and afterwards, about 1 hour after the plane lands to get your luggage and go out of the airport. This adds to roughly 4 hours and 30 minutes, and this ignores the fact that most planes take off at least 30 minutes later than their scheduled time (and when there is bad weather, this could mean hours).
For highspeed rail, it literally takes me less than 8 minutes after getting to the station before boarding, and the same for getting off. This is because the safety checks is no where near as strict as that of for air travel (many fluids and things such as batteries are not restricted). And the entire duration is 4 hours and 50 minutes. Furthermore, the seats are wider and it is also much more comfortable when you don't have cabin pressure. So nowadays in China, travel between the major cities have all resorted to highspeed rail rather than air travel. And I have not yet mentioned the fact that the ticket price is less than a third of the price for plane tickets.
There are actually many more reasons from the perspective of the government why developing the rail is so important. 1. All aircrafts are designed by companies from US and Europe, which means that these forms of transport are dependent upon good political relations. By building the railway, this makes China much less dependent on Boeing and Airbus, where each plane has to be imported from abroad. 2. Building trails is infrastructure which allows for jobs and for the "less profitable" routes mentioned in this video, they were built to stimulate the economies in second-tier and third-tier cities. I love how the capitalist point of view is always only about "profit" and "money".
They don't get it. Especially Americans. It's pointless to educate them because they truly truly do not get it.
Wow good analysis
Obviously because the channel is named "Economics Explained" and the video is about the debt aspect of the project. No one ever said that the highspeed train project in China is a failure because it's not useful or not accessible, we are speaking about the economics side of that.
"I am a Canadian that has spent over a decade in Canada and the US and over a decade in China"
Ok so then you know that there's a reason why USA, Canada and Australia don't use HSR: much lower population density and far greater distance between population centers. Basically a waste over here.
"There are actually many more reasons from the perspective of the government why developing the rail is so important. 1. All aircrafts are designed by companies from US and Europe, which means that these forms of transport are dependent upon good political relations. "
Gee China, maybe you should develop good airplanes.
It's not only that, it's also the fact that they have a lot of their airspace restricted to military aircraft, which means that in many cases an airplane can't fly a direct route.
We don't have this issue in USA, Canada and Australia.
@@neutrino78x 1. I never said USA, Canada should have HSR. 2. Countries specialize, regardless of culture and politics. This is why US only produces certain stages of a product (i.e. designing and assembly). Basic comparative advantage. Feel free to search it up and read up on it.
If all you’re thinking about is profit from the railway itself then this analysis makes some sense but as someone who has traveled across China by rail before and after the high speed rail was finished I think you can’t underestimate the important external benefits they give to a city’s economy and social life.
But who will pay for it?
@@jessieplexer the increased taxes generated by the external economic benefits of High Speed Rail
Much of the population of China can't afford to ride them.
@@jessieplexer In socialist state, like many other facilities - through government subsidies, paid through taxes. Right? Similar to housing, healthcare etc. Transportation is key for average persons.
@@cooper1819 you're missing the fact that increasing taxes while the economy is beginning to slow and go down accelerates an economic downtrend. Additionally, the CCP relies on the economic growth benefitting the average Chinese person to protect their status as an unelected government. If suddenly taxes go up and the economy is imploding then the people will start to blame the government.
is there any chance you would do a video comparison on the economics of Japan's highspeed rail? I think about the efficiency of Japan's infrastructure maintenance often. Like that sinkhole they fixed in 2 days a few years ago.
Lol japan actually aimed for a prc like density of hsr in the 80s. Then the financial reality of its cost hit home. They privatized jr rail, and the less economical routes never got built. So japan still has a mix of normal and high speed trains. Thats what i read. Prc is already aware of the hsr cost though...they might cut back if it turns out to be a grey elephant for mid size towns and cities.
@@abcdedfg8340 part of the reason it ended up being a highspeed and normal mix is also they lost a entire decade from 1991 to 2001 and there now only moving at a snails pace.
Japans ecconomy has been just as stagnant as europes since the eurozone crisis for even longer
@@Newbmann True, but even before there were probably questions around its viability when there were already trains, highways, and planes. If the hsr just moves traffic and saves maybe 30 minutes or and hour top, seems abit over the top, for a town or small city. Besides, hsr is only part of a wider system, so it needs to be rational.
Sink hole was caused by construction nearby and it actually took a week to reopen. Also closed later when it began sinking again after a week or two
The thing with japan is that environment and circumstances are always against them like tsunamis, nuclear meltdowns, and earthquakes. Heck, imagine that japan didn't have those like heck they could beat Europe if not america but for now, they're a mess.
I am always surprised when channels like this are looking into rail systems profit only by selling tickets. But c'mon, - what about the regions which are getting more developers better than ever before? What about money which are getting attracted to those more rural areas? People are moving, money are moving. Even if you cannot get your money back from the tickets, -you will always get them back with the taxes. Railway will always be there and despite it's gonna change many owners or will go through multiple restructurations, - it still will be there.
However, I think the question raised in the video, namely that high speed railways would have been always the better option, remains. Conventional trains are cheaper and allow to transport cargo, which would be more important for regions which didn't have any connection to infrastructure before.
@@stefanreiterer6152 The issue about conventional trains, - that cargo trains are killing tracks. They do require a huge amount of maintenance, not sure why they cannot build another track next to high-speed rail for cargo trains? extra track on the existing path would not add a significant amount to a budget. Plus again, - trains are "saving" plant from car exhaust. People would travel anyway no matter what, - and if we don't have trains, - they will use the bus or car. I live here in Houston, - I would love to drive to train station and the use the train to come to my work. But here no trains, no buses no nothing.
Spoken like marx would wish
What is this BS argument about the costs of building conventional vs High speed trains? There is no significant cost difference. The land, the rolling stock, the rails, the infrastructure to make it all work; it doesn’t matter if a train is traveling at 80mph vs 220mph, the vast majority of the construction costs of building a new train line from scratch aren’t that different. What is the basis for this myth that a new low speed train line would cost significantly less to construct from scratch than a high speed line? This entire video is fake news.
@@boyziggy I believe also that to keep passenger/freight lines next to each other would have better repair experience and less maintenance for the passenger trains. because freight trains are killing rails super fast.
The Peng Shaui billboard!! Love it!
That accent and the inconsistencies when using 'routes' and 'rail lines', btw in Australia, we pronounce it as 'root'.
Infrastructure is a public service. The public as a whole pays for it through taxes. It is OK to have losses as long as the economic output of the country as a whole benefits from this service.
Federal infrastructure protects are not paid for with taxes. The Central bank makes the money.
These neoliberals are just aching to see China fail. Their ideology cant explain how they grew the past 15 years and theyve been predicting a downfall ever since
@@Joaking91 well said...the video does actually show the whole picture and it only focuses on the cons... When China is doing something better... They need to trash it... Sadness
Excellent point, I'd love to see an in-depth analysis on the benefits of those unprofitable lines. For starters the avoided carbon footprint of not having the Chinese drive cars or even buses is significant.
@@ten_tego_teges almost no passenger train line anywhere turns a profit, including Europe, but it allows for the opportunity for value generation. Roads also cost money but a modern economy cant work without them. I suspec they know it but they have an agenda to push.
Small correction: Hoover Dam was build during the "Great Depression" not the "Great Recession". Depression was 1930's Recession 2008. Not trying to be a know-it-all, just trying to help you make a better product :)
The UK had a Tory Government, the Chancellor inflicted Austerity on the peasants while the elite enjoyed their off shore accounts. The British Way!
@@MorganMadej Just like Covid lockdowns now, government employees remain working, or receiving checks, during a depression and recession.
@@MorganMadej Canada recovered before the US.
came to the comments to find this one, thanks!
The silly thing is that Australians don’t even use the term “Great Recession” for 2008 - we call it the “Global Financial Crisis”. Possibly because Australia didn’t go into recession. 😎
Excellent information ! Thank you so much for putting out this video.
I love the poster at 8:50. Great job mate!
I feel you can justify the cost of unprofitable routes because it does help a lot of people move around, which you need. It is sort of like having a post office that delivers every where, which most people agree is helpful even if some mail routes are at a loss. That said, a normal rail line instead of a highspeed one, was probably fine for that.
Exactly! I felt like this video is sololy made for China bashing, so even if their government is doing something for the convenience of their people even if it's unprofitable, it is done for their people not for profit making.
I agree. People cannot make money if they can't easily access places to do business.
I agree,it sounded more like some propaganda video,which looked at all the negative things and few economic facts
do you even watch it? He mentioned this could be solved by building regular rail which is much cheaper.
@@geospliced This makes sense, PROVIDED you can show that HSR allows this to occur, when it wouldn't otherwise occur. I don't think there's any justification for this argument. Chinese have no problem making money, as evidenced by the greatest increase in GDP over the last several decades. So you can't use this generic argument here. Keep in mind that Chinese debt is already the biggest debt in history by far, much greater than US debt. This has come about by the influence of two things: 1) poorly thought-through decisions on things that are big-ticket items (like HSR); and 2) massive corruption, so that everybody profits when China builds anything, at the expense of the national debt and the people of China.
However, it sounds like almost all their debt lies with themselves - local Chinese governments, Chinese State Banks and Chinese citizens. That's quite a stable debt situation, no matter the amount almost.
Also, losses on infrastructure is fine. Roads are not expected to generate money as well. Each train ride generates a surplus of economic benefits outweighing the costs.
Private companies want everything generate revenue, even a stone, rock or whatever. You better make money!
Roads are far more flexible and abundant than railways, are used way more, cost way less to maintain and in 99% of cases are not owned by a private company.
Also, road tax, fuel tax and any tax paid on the purchase of vehicles, will make its way back to the government.
@@bigfudge2031 They are more abundant because they are built more.
Rail networks are in almost every nation not owned by private companies either.
Road / fuel tax etc do not cover the costs of roads maintenance in the slightest - even in tax-heavy countries like Germany. They are maintained purely by them enabling other economic activitiy and thus increasing general taxiation.
But roads are flexible and of course needed. But simply not as much as we currently use them. Trains are and will for basic physics reasons always be vastly superior in terms of efficiency and are great to connect cities/towns for majority of traffic.
Look at all the railway companies that went bankrupt in America during the various rail booms here in the 19th century. Debt is only as stable as the revenue it relies on.
@@TacticusPrime For private companies that is true. For state owned companies less so.
Two things I think you've missed.
First, in the both the US and Australia, there exist free-to-use roads. It's quite reasonable for railways to be similarly subsidised, because they are a policy vehicle. Indeed, it's an obvious distortion to subsidise road and not rail.
Second, it is not the no-brainer you seem to imagine to use passenger lines for freight. Canada and the US have few truly viable passenger routes, not because the demand does not (at least in principle-I'm setting aside cultural factors since they are in large part a consequence of earlier policy) exist, but because of a supply problem: if your lines are filled with massive freight trains running at 30 MPH / 50 km/hr, there is no longer any opportunity to run passenger services that are competitive with buses, let alone aircraft. And, to be blunt, that's how the bus companies, car manufacturers and airlines like it. And then there's track maintenance. You've already noted that this is a financial burden, but freight trains are a _lot_ heavier than passenger trains, and passenger train derailments typically (not always-there have been some truly horrifying incidents with flammable cargo) have far higher costs than freight, owing to both higher speeds and the fact that the trains are packed with fragile and irreplaceable humans.
@B J don't be too serious with an anarcho-radicalmutualistic-communist
The roads in the US are not free. Taxes are applied at a Federal and State level to gasoline/diesel. Further local taxes are applied to trucks that tranport goods based on the value of the goods and the distance travelled
In the Netherlands freight trains go by night, passenger trains by day (apart from 1 dedicated cargo line to Germany).
@@raul0ca They are free in the moment you are using them. Unlike for trains and other public transit, you don't need to buy a ticket to use most road infrastructure. Trains are not payed for through taxes.
I almost believed in u and ignored the corruptions, forgot about ordinary rail roads that achieve the same goal, forgot that many sections in Chinese HSR don't even travel at high speed due to landscapes or proximity to residential areas.... HK spent USD 10Billion for a section that saves ppl's travelling time from 45 mins to 35mins from an existing rail system...... btw... those were tax payers money to build and to MAINTAIN for millions EACH MONTH!!!
But like I said, I almost believed in what u said... almost
So I strongly suggest u do take closer look at things before u accuse this video 'China bashing'!! I sincerely hope woke folks like you will live long and taste what CCP do to their Countrymen aka Slaves...
Top video mate.
Nice to see Australian contents on you tube.
Who says railways have to be profitable? The value they provide is in economic opportunity to the places they connect. Roads cost nothing to use, yet are expensive to maintain. Most of them are funded through taxes. But nobody is suggesting to close down roads because they are not profitable. That's not their purpose. Same applies to railways.
So, the issue here isn't profit per se, it's ballooning debts and ballooning maintenance cost. Essentially, the company is currently in a death spiral, and thus in order to cover its already existing obligations, it will require more and more tax money each year just to keep things as they are. And if you don't know what that looks like long-term, allow me to introduce you to a little story called Robin Hood.
while true... that doesn't change the fact that someone will still have to sign those paychecks
I don't know about elsewhere but in Australia we have a road use tax in the form of a fuel levy.
@@aaronwinegar9724 The state owes the debt to itself. It can cancel its own debts.
@@somethinglikethat2176 - The same in New Zealand but the fuels taxes and heavy transport road user charges don't cover the real costs of road maintenance when the indirect costs on roading are factored. Rail does cover the direct and indirect costs.
Incredible insight as always
The analysis in this video is highly simplistic. High speed rail is rarely "profitable" in conventional financial terms. Instead, there are a number of direct economic benefits including travel time savings, improved reliability and modal shift from cars/air travel that have environmental benefits. These benefits can be quantified but do not appear in the revenues of transit authorities. Additional benefits include improvements in economic productivity through the expansion of labour markets and agglomeration (cities/people being closer together). What matters is whether the totality of economic benefits outweigh the construction and operating costs. It is clear that the first few phases of high speed rail (not just connecting the core cities but even the 2nd tier cities) achieved many of these benefits given the sheer size and scale of the populations being connected. However, subsequent phases have built high speed rail lines to very far flung areas in the West and it is obvious the economic rationale for these schemes are flawed.
When he brought up how we shouldn't look at China's efficiency and implied that we should be thankful for governments taking forever to accomplish public projects, I just rolled my eyes.
@@markcarls1896 Coz it is not an efficiency. That's the point of the video. BTW, the fact, Hi Speed Trains do not have a chimney and a trail of smoke over the roof does not mean, it has no enviromantal costs.
Rohit Rai, funny how important you claim these externalities to be yet you claim they can't be measured. They can. It rarely adds up all too much.
@@tomfu9909
Ability to build 40,000 km+ rail in 20 years is efficiency, efficiency in ability to make rail lines across extremely different terrains, climates, regions
@@markcarls1896
Taking forever to complete any project is muhhhh democracy!!!! Hes not wrong
Feels like a very American way to look at thing: public services have to be profitable
problem with just closing unprofitable lines: not just the jobs get lost, but also the ability of the people to move around gets severely impacted. it‘s the best option financially, but public transport shouldn‘t work like a normal company, it should serve the people, not investors or owners. that‘s why i think the best option is to have public transport nationalized
"bUt fReE mArKeT"
Exactly lol, these economists don't think about the people, only the artificial numbers.
And where does that money come from?
@@NocturneNox1 that's a good point, and one i am fully aware of. this might be a bit radical, but my solution for this stuff is to let the beloved "free market" do it's thing and cut over the top subsidies for industries like traditional combustion engine car manufacturing, stop bailing out companies that refuse to pay their taxes in the countries where they make business, and make companies like amazon pay normal taxes. and no, the last point won't impact the companies, amazon made so much money the last years while everyone else was holding on for dear life that they could keep the money and pay their investors more.
basically what i am proposing for a solution is very radical and socialist, but would probably hopefully solve multiple problems at once. however, we can't be sure until we try it, and i am willing to take the risk that giant companies that exploit workers around the globe fail for the sake of making life better (now that i think about it it's gonna be positive in the long run either way).
@@NocturneNox1 same place money for highways and roads comes from
Its like building a power line to a village of 100 people in the mountain.
Its not profitable but its your obligation as a state that serves its citizens to build it. Cause you just made 100 people lives much better. Not only that but these 100 people will go and start buing electrical appliances, putting money back to the economy.
Same with running water, same with telephone/Internet lines, same with cellural networks and of course same with Public transportation.
Mate I love your videos, hit the nail on the head with this one!
There's a city country in the world with an insanely well designed metro train system.
Prior to the development of the metro there was an evaluation by the transport ministry whether they should go ahead with either bus or train system for the generation.
They decide the train system to be build and the bus complement it.
Even though the train broke down often due to over-usage, in retrospective, the benefits sure outweighs it's costs, because everyone now have the ability to reach another part of the country at a fairly affordable price.
Can't say it's the most comfortable but still beats staying at home or paying a super high price for private transport.
Economics of scale here, if everyone started taking public transport instead of private transport, it makes the world cleaner and greener
Singapore turned me into a transport enthusiast for good reason.
I am now 50. I remember riding with my parents, on the Interstate, through Sioux City IA and amazed at all the road construction. I was also amazed when they finished that stretch last year.
Lol
I'm 40, I-29 has been under construction my entire life.
Lol, well i guess no rush...the highway is already there. Different for developing countries trying to link with remote regions properly for the first time, its abit more urgent.
Lol well the interstate system itself is done already, at this point expansions on it are just luxury.
Same as in Australia Sydney they started a road upgrade across the mountains outside of Sydney they started about 39 years ago. They finished about a couple of years back now. They just started on another end of the road so I should be be dead by the time they finish. Absolutely Useless
Toronto has been building a single LRT line for the last 10 years.
North America is so terrible at this... And everything is car based
Public transport is so important in letting people from poor neighbourhoods work themselves out of there
Neighbourhood A that has a public transport station nearby has something around 50% more chance of making it out of there compared to neighbourhood B that doesnt have station (dont quote me on that percentage but I know its really high)
Ask us Germans. Hey we finaly opend our Airport in Berlin. But it has become a Meme by now.
Where to? I mean, is it to Vancouver or Ottawa?
@@Kumpelblase397Like the new Tesla factory will become when the ICE car Unions get their way in a dying economy with high unemployment?
Seriously. When we finally built the subway extensions in Toronto, my father was like "They were talking about this when I was in high-school, but in more depth." And to be clear. That was 50 years ago.
Keenly interesting all the way through. And meaningful!
It's not about profit. It's an expense to bring more life to the areas that get less traffic, boosting industry, populations, and economy long term. Not to mention genuine convenience for the people using it. Less is workable, sure, but not beneficial.
This whole video is based off the assumption railways need to make a profit, but why would we assume that?
Railways (like all public transit) can be an incredible public good, same as schools, parks, and fire departments.
A LOT of his videos are full of opinions formulated as facts.
Edit (the irony is I've lived and studied in Australia, and even worked there for a while. The RAIL/TRAIN is what connects and moves most of their goods, and allows most of the poor people to travel all around the country. The hypocrisy is too much here mate, way too much.
Because profits are a signal that things are actually wanted by people.
@@Falcon16Fighter lol no it's not. Post offices don't make a dime, does that men's nobody wants them?
I mean, shutting them down is only one solution. They shouldn't do that. The issue is the massive debt that needs to be paid to maintain them, which is fair, it's high speed rail, but it doesn't need to be high speed rail everywhere. It's a bit late for that though.
@John Arsebuckle Lol this man has the southern drawl of Australian accents.
I'd rather be in an economic crisis with good infrastructure than in an economic crisis with bad infrastructure.
Economic crisis means you cant have good infrastructure as if you have too much of it it cant be maintained.
@@baltulielkungsgunarsmiezis9714 if you have bad infrastructure you cant maintain it either and it gets worse. At least with good legacy infrastructure it gives you a ladder to get out of your pit.
@@JAT985 So we are in agreement, no paving roads in economic crisis.
@@baltulielkungsgunarsmiezis9714 I mean, the stimulus is useful, which was covered in this video
It has pros and cons for sure.
What if that "good infrastructure" is the cause of the economic crisis?
I am surprised that almost nobody talks about 1). environmental benefits because railways transportation has far lower emissions than flight in long run; also reducing vehicles on the roads 2). Social benefits- enhanced mobility allows everyone to travel within one country quickly and cheaply is difficult to measure but immensely beneficial for everyone; 3) increasing domestic tourism industry 4) military mobilization - HSR allows the China government to send their troops to every corner of the country quicker and in bigger numbers ; 5) Better build now whilst the Chinese labor costs are still low than later
The only problem with the infrastructure bill is that a good portion of that money will inevitably go 'missing'.
That comes with the territory (of doing business in China)
2:18 this is just a flat out incorrect characterization of trams. They don't have the "same traffic problems as buses". Usually only part of a tram route is on a road shared with cars. When they have their own designated rail, they are much faster and smoother than buses, they have a much higher carrying capacity, and they're electric powered. I've taken many buses and trams, and trams are always a much better traveling experience.
And about route flexibility- city buses travel on fixed routes just the same as trams, so why exactly do you need your public transit to be "flexible"?
Maybe in Australia the city planners don't know what they're doing, but here in the Netherlands the trams are fantastic.
Love EE videos, I just also love Not Just Bikes videos :)
Well, on the flexibility front, you can't change a tram route without laying new rail. You can't take detours to avoid construction, and it's harder to keep a line going if a tram breaks down versus a bus.
They're also far more efficient than even an electric bus. Trams are dope.
I'd say even if they share the road with cars, they are still better, because the traffic lights are optimised for them. And most of the times they won't share the whole length of a track, so they are even faster. I commute every day with tram and it's the best transport mode in a small city. (Not possible in the US because the footprint of a 50k city would be way bigger than the European equivalent?
They really should be trolley busses not trams
loved the billboard on the train station! very subtle, but strong
says alot about the video Anti-China propaganda.
@@leihtory7423 Go and ask your employer a raise to get better monitor and earphones 'cause certainly you need them. I guess 50 cents isn't enough for you, huh?
@@hermdude Why are you behaving this way?
@@leihtory7423 I would not call this video anti-China propaganda, but it is definitely produced through a more narrow view of the benefits of large infrastructure projects or, in other words, from the conventional perspective of an economist. The benefits of large infrastructures shouldn’t be measured merely by costs and profits on the balance sheets of the operating companies or by the short to medium term benefits as the stimulus for the current economic cycle. High speed-rails changed the way of life of billions of people in China, accelerated the urbanisation process and have many other long-term social benefits that are not easily quantifiable. I despise many things CCP does, but high speed-rail is not one of them.
@@tyan_ldn I guess he was abused by his family at early age. Left a big scar and made him mentally unstable forever.
Watch this every day I wake up. Love it, keep it coming. :) 😊Australian here. :)
hey,Australian
Rail networks should be considered as public amenities not exactly a profit making endeavor, governments doesn't exist to make profit. So for the greater good of the people it's better to maintain connectivity even if it doesn't return a profit. Having said that a normal rail infrastructure with a mixed use of cargo and passenger trains would make more sense.
Yes, but they shouldn't lose money trying to go to nowhere. Products can be transported with regular rails.
@@gold9994 I don't think they are going nowhere, the lines are built between places for people to travel and it's long term vision. But I do agree that it should be available for multiple purpose, people and cargo.
I misread the titel as "...higher than Everest" and did some math. If you stack 100 dollar bills accounting for the 850b debt it would be 100x heigher than the tallest mountain on earth.
*If you are interested in the math*
100 dollar bill: 0,109mm
Debt of China: 850'000'000'000 USD
Mount Everest: 8849m
Debt stack: 926'500m
(debt/100USD*0.109/1000)
So 104,7x taller to be exact.
Or 41,8x taller than the tallest mountain in the entire SOLAR SYSTEM (Olympus Mons - Mars)!
edit: Or 92'650t of paper
(2'200x Boeing 737, 20% of ALL Boeing 737 ever build)
edit2: Or 8'797km2
(covering all of New Jersey)
Did you allow for the X-Rate?
easy solution just print billion dollars bills. now you debt is not so high
@@JoelFeila 😂😂😂😂😂 that's how economy works[sarkasm]
@@JoelFeila Zimbabwe has entered the chat
As a Chinese I can tell you the high speed railway was one of the most criticized project at the time, along with the Olympics. The major reason was the existing railways worked just fine. The high speed train tickets cost triple compared to the regular train tickets and it doesn’t even goes to the city centers since most stations were completely built ground up and it was cost inhibiting to purchase land in the cities so most of them were built on the outskirts like airports. Factor in commute time to the actual destination, for most popular 2-3 hours routes, it was not even that much faster than a regular train. Of course most people still opted to take regular trains. And guess what? Of course the government just started to cut down the numbers of regular trains offered. Between the popular routes in Yangtze River delta area, you were able to get on a regular train every 10-15 minutes. With the high speed rail, the density of the trains didn’t change that much but only like 5 of them in are whole day were regular trains, not to mention they pretty much removed all faster (trains with less stops) regular trains, and all regular trains had to stop at every single station no matter how tiny they are to make things painful for regular train takers. But well propaganda worked good enough and apparently it was easier to let people digest this fiesta as long as you make it a “national pride” just like the Olympics 🤷♂️
So you are secretly using RUclips?
The same happened here in Spain
"Look people! We built this amazing new thing for you! It's so good that we're going to force you to use it by deliberately making all similar but much cheaper services crappy!"
I am not sure if you are a real Chinese or not since from what I can see today. The route between Yangtze delta for example from nanjing to Shanghai have around 200 fast train per day. Regular train will take around 4 hours where fast train will take 2 hours, the fastest one will only take 1 hour. All your information are somehow wrong that’s why I want to know how did you get all the informations.
@@demoncloud6147 nobody cares that u got a vpn in China bruh
8:50 Nice Peng Shuai billboard there, thank you
One important thing to understand is that not everything in a country should be for profit. Education, transportation, health care and housing should be affordable and available for everyone and it’s the responsibility of the government to make sure of that. That’s why we pay taxes
I don’t understand why people believe that passenger railways should be profitable, while highways should be a government expense. Will your next video be on how unprofitable the US interstate highways are?
Highway profitability is sort of considered. In QLD Australia the state highway projects are subject to cost to benefit studies. If the transport efficiency gains don’t stack up, the project doesn’t leave the drawing board.
The US subsidizes low profit airline routes too. Mostly to smaller cities and towns because... politics.
@@brendonpurnell2564 The problem is that it's incredibly difficult to quantify benefits. Transportation infrastructure has an enormous ability to encourage development. How much of that development would have happened anyway without the infrastructure is unknowable. Demand is also impossible to predict. Whether a project will be thought of as forward-looking or an expensive road to nowhere won't be known for decades.
Workers don't move freely on the High Speed Rail, they take the regular trains. That being said, I sat on the HSR, I'm impressed, and based on my interactions as well as friends who live over there, the middle class in the cities ride it. And well, in the long term as Japan has shown, this is the quality supply side economics China needs and the US needs.
Infrastructure projects do very little for very few as an economic stimulus. A company gets a few projects and split up their existing crews to handle all three projects. They work on each site just a couple of days per week and no work the next four/five days. The company with the projects rake in the cash but very minimal impact for anyone else. It also takes decades to start a project
It’s such wonderful of China to spend on infrastructure & increase living standards of its people instead of wars. Well done! 👏
"Where is Peng Shuai"
I love that subtlety. Good on you!
I still don't get why we shouldn't expect our governments to complete their infrastructure projects quicker. Are you saying that it should be done slowly to not overspend in good times and have it come crashing down in bad times?
It shouldn't take a bagillion years to make a bus line but it shouldnt take days either. People want the projects more efficiently.
It should be done slowly so you don't get a train accident that kills people. Making things fail in a safe manner involves figuring out all the potential ways a system can fail and that takes a lot of time.
@@immanuelaj One Chinese HSR accident in its 13 years history. I'm sure many times more people have died in normal train accidents in western countries since then.
That's a very good point. No China BS can be an excuse for the inefficiency that the bureaucracy and lobbyist bring.
Great point. In the end every government with a large country population is corrupt. It is all about the money.
Great Video with good insights! Thanks.
Public services don’t have to be profitable!
As someone who works in the rail industry and has done high speed rail projects, the different forms of rail transport are like a set of differing tools. You use the right one in the right place. By the way, Spain is doing exactly the same, expanding a good limited system in unprofitability. High speed rail is very high cost, both to build and maintain and should only be used for very passenger routes. Unfortunately, as you made clear it is often enmeshed in politics. For lower passenger routes, normal rail is fine.
I see China now has a "Maglev" train capable of over 340kph. How does the maintenance of a Maglev line compare to a traditional one do you know?
The problem is using high speed for everything. It's the same problem that people run into in city builder games. Becoming inefficient through efficiency. Road and highway systems are designed the way they are for a reason. Main arteries, high speed roads between major points of interest. Secondaries, 4 lane roads and avenues branching off of arteries and often moving between them. Then your basic roads, the 2 lane jobbers everyone with low traffic. Rail networks need to be seen the same way. High speed between the biggest population centers, NY, Chicago, LA, Seattle, Phoenix, Atlanta, Dallas, ect. This gets you across the country fast and reducing burdon on airlines. Then low speed rail from major cities to minor cities. Finally, within a city you have busses, trams and metro. That's an effective public transit system for America. And if it's competitive with air travel and at least equally as comfortable, and given pilot and atc shortages it will be, it should be popular
Replying to my own comment, if we were to build a high speed rail from NY to LA and charge china's per mile rate plus 20% for profits, it would still be roughly 30% cheaper than an airline ticket. Adding airline check in requirements ect, it's also only 2 or 3 hours tacked onto the trip as well. You can't say it wouldn't be an attractive option for families and economy travelers
Your comment is false… Biggest Spanish high speed projects are Corredor Mediteraneo and Pajares tunnel, both of which will operate mixed traffic. Besides the study that is used to make this claim only counts AVE services, even though Alvia and Avant make up a huge portion of the ridership especially in the north. It also states that the only profitable routes are Madrid-Levante, Madrid-Catalunya and Madrid-Andalusia which seems very little but it’s actually like 75% of the system’s lenght
I rode the high speed train from Wuxi to Shanghai in 2019, it was like 72miles in about 35minutes. Quite impressive. You could put you water bottle on the ledge below the window and it would just sit there. Anyway, don’t know about financials, but the trains, subways, I was on, were very nice.
Yup. I took high speed trains all over in 2018 and it was quite impressive
@@Dan16673it’s so convenient to travel between cities in China
Key infrastructure should always be govt owned to ensure the services reach to every citizen- it is not always about profits/ govt has to serve public needs
Didn't finish all this video. I'm living in China now, and I have to say the High Speed Railway changed Chinese live a lot. You may not imagine how the train station looked like before HSR during Chinese New Year, and how hard for a person to get back hometown for the festival.
Chinese HSR system is way from good enough. Japan may be better, at less the trains are easier to take and connected to every city.
We just finished 1/10 or less to build a HSR system to connect every city in this huge country with a huge number of population. Even you may think we got a debt problem, we take it.
You'll be the ones paying for it. The citizens pay for the corruption of the CCP.
@@aliensinmyass7867 I've already paid for it, that's called tax. And I believe it worths.
Well, Japanese high speed trains has never had accidents, chinese for the other part...
1. These bullet trains are part of broader city planning. Further urban landscaping projects are made possible because of these trains.
2. Compare of aviation, bullet train saves carbon footprint. And it saves people's time in commute when compared to regular train. I believe infrastrutures like this need not to make profit on its own, the same way fire stations dont need to make a profit. Think of it as a utility service.
I completely disagree with your video. A little more research and you’d see they are connecting small towns so they can have access to the big cities for work. We in the west forget one way to reduce housing cost is to provide faster connections between smaller towns and cities. that way people decongest cities thereby in turn lowering living cost in cities. During the pandemic a lot of people migrated out of Toronto to the smaller towns and provinces and this in turn caused rent to drop because demand was dwindling. So if China is connecting small towns we shouldn’t look at it as a lose rather as a gain cause the market gets more exposure as more people get involved. Moreover, govt corporations shouldn’t worry about making profit on transportation for the public because the human and economic gains far out way the loss, I mean the uk transportation system is famous for not making profit but still lives on because of what it brings to the economy.
if it does not make a profit where does the money come from to build it, and later to maintain it?
@@toddknode752 public spending, overall, this dude is practically nitpicking on ants to say china bad.
Well yes and no. The main problem is was hsr the most cost effective solution? How about regular rail (it is cheaper and more environmentaly friendly due to less energy). Japan shows that we can achieve both (profitable hsr and connecting small towns with regular train).
@@Jack-he8jv you are right
Your comment made more sense than the video
At the begining of your video you called the great depression in the U.S. the great rescession. It was not a a recession and there is very clear difference.
Has the US highway system ever made profit? Who said public infrastructure was supposed to be profitable?
"If you run the ministry of hammers, every problem starts looking like a nail". Someone's a fan of Charlie Munger~
That quote came from Maslow not Munger
@@helicocktor didn't know, my bad
@@nosquirrels6229 nah no problem bro
you should come to China and get a ride on high speed trains and see how full they are, even for lines connecting second tier cities. makes a lot more economic sense than interstate highway, counting the costs of maintaining and running cars and the emissions they produce.
does it tho? that implys you dont want to bring your car with you which many amricans very much so do becuase there is no metro in the suburbs and no person that isnt poor wants to use a bus simply driving is cheaper than taking the train and hiring a car on the other end
@@leojohn1615 yup, compare to mass transit. that's a costly design in the first place.
@@leojohn1615 bringing your car with you entails issues with parking and traffic.
8:40 The billboard is a nice touch.
but how big is the problem compared to the American debt problem?
but how big is the problem compared to Xinjiang internment camps
Er…. Masses of rural Chinese travelled into the cities via trains, particularly the industrious south to work, and they return home over Chinese New Year in what have been one of the biggest annual shift in population in the world, and that started in the late 80s, not 2000s.
It certainly wasn’t a recent phenomenon that people started travelling for work. If anything, that has been at a much smaller scale as labour intensity reduces and workers gradually stopped travelling as they no longer need to work in the cities.
agenda 2030
You never wake those tend not to be woke up. Go on guys. Leave that fella rotts.
Government: Privatise the trains.
Government: Buys the trains with a company they just set up...
It's mainly done to remove politicians from the decision making process, and to allow more flexibility in the form of a technically 'privately owned' company.
@@Tuppoo94 Perhaps in the West but let's be honest they're all one and the same in China.
@@Tuppoo94 Who does decide the composure of the company's board? The owners which mean the government, which means politicians.
@@lajya01 Yes, but the company executives can also exercise authority independently without having to consult the government on everything. Also, the debt of the company is no longer on the government's balance sheet.
wait, thats what people here in eastern europe do as well.
Too many comments criticize having profit in mind. Profit is simply an indicator that good/service provided is worth the time and resources invested in it.
It doesn't mean that high speed is not worth it. It could simply mean that these companies didn't allocate resources efficiently.
They are criticizing that the whole analysis in the video was made on the operational profit alone.
Always fantastic updates
Let's not forget the ability of the PRC government to "acquire" land for cheap compare to the cost of land acquisition in CA or here in NY/NJ. Great video as always.
Let's not forget Western Europe and Japan still manages to overcome that said "problem" that seems to be used as a excuse for US not being able to build the infrastructure.
All land in China is state owned.
I’m sure it didnt cost more than a few marbles, blankets with small pox and firearms to the native's head to acquire NY and other lands in the US.
@@iHaveGrudgeAgainstUT Beads not marbles
Still wonder why land acquisition is always a problem in infrastructure project
I love the China economics video, I used to live there and it's a fascinating country. It is bizarre, and more like another planet than another country, and because it's so strange and different makes it an amazing place to travel and have a experience you couldn't get anywhere else in the world
@Sea Gull ZHANGJIAJIE is good place 👍🏻
Facts... I miss that place. Specially Sichuan province
Idk about living in china especially since the rule of law is non-existent and tofu buildings,
@@tacomonkey222 Yeah, you see... the rule of law is basically built by the US and forces other countries to comply with US interests, otherwise the US will use all its means to regime change the government. On the other hand, China has its own laws that defy the US, which is exactly why the US are so frustrated and is spending $300m a year to launch anti China campaigns that weaponises the notion of "human rights" and "rule of law".
@@tacomonkey222 Stereotypes driven by an anti-China political agenda... every enemy of the west gets the same treatment. We did it to the Russians. We did it to the Japanese. We did it to the entire Islamic world. At some point, don't you have to stop and ask yourself if what you're being told is true?
hah that billboard on the trainstation in 8:50, nice touch :)
Love the content and knowledge you have shared, feel more connected to my fellow humans all over ❤😊the world
One thing that's misunderstood about infrastructure. The big benefits from infrastructure is only on the new stuff. That controversial omnibus bill has a ton of money but the vast majority of the infrastructure spending is for replacement. Replacing infrastructure is necessary, even vital, but it already has most of the benefits grandfathered in. That doesn't bring votes.
Not to mention only a fraction of that omnibus bill was actually infrastructure. Calling expanded unemployment benefits 'infrastructure' does not make it infrastructure, just exasperates the current employment crisis which is in turn exasperating the supply chain collapse. Unfortunately, the politicians will just keep passing 5000 page documents none of them have read, just getting em written by a lobbyist who tells them what talking points to say. Most of that "infrastructure" money is going to K Street not Main St. All of it going to the National Debt Mountain.
Building a new bridge creates a ton of well-paid engineering and construction jobs. Replacing an existing bridge creates a ton of well-paid engineering and construction jobs. Are you saying that creating a ton of well-paid jobs doesn't bring votes?
@@tangsakun Not really. Everyone that's not working on the project will only thinking of the mess, the delays and inconvenience. And, sadly, replacements are fraught with opportunities to screwup spectacularly, over run with the budget and have a ton of delays just to *replace* something.
That's only true if you're refurbishing a road that is in stellar condition. A road full of potholes creates costs by wearing out the trucks and cars that drive on it faster. So your money does create immediate benefits.
@@Lusa_Iceheart Idk how better unemployment benefits would in turn benefit K Street whatsoever. And to be frank; nobody cares about the National Debt. Tell me when the National Debt reaches 300% of the US' GDP-to-Debt ratio, then I'll start caring. If Japan can handle that, then the US can do far more.
Rail infrastructure is an investment that takes decades to _start_ paying off. Those trains to nowhere will become trains to somewhere in due time, because easy rail commuting will make it more practical for people to live in those areas.
Using all my savings to buy an investment will eventually pay off...if I don't die first from becoming homeless...
@@luisgutierrez8047 good thing governments and nations are not like you...
@@TsLeng not all governments are the same. The CCP is built on top of a house of cards. It spends an INORDINATE amount of money in securing social stability... (Money which if we're actually used to improved people's lives....they wouldn't have such problem)
So ye, lets see if the CCP is alive long enough for the trains to pay off lol
@@luisgutierrez8047 good thing managing a government is not the same as managing a household lol. These 🤡 takes from armchair "economist's" are just ridiculous.
@@luisgutierrez8047 sorry to see you have been brainwashed. If spending money on infrastructure is a house of cards, what do you call spending on 'defence' and war?
No need to reply because you can't see clearly. Tip: look at Spain and all the crazy things they spent on. And it's one example amongst many
In the UK we have what is far higher cost per capita in the ludicrous HS2 project, a train route neither wanted nor, more importantly, needed. A vanity project, no more no less, fatally flawed in so many ways.
The "Where is Peng Shuai?" sign in the railway station animation was a nice touch. lol.
10 years ago, when the Shanghai government asked the "Western experts" about what did they think of the new train networks that the Shanghai government was going to build. The experts said out loud that it would be a waste of money and an unrealistic goal.
10 years later, Shanghai train networks are now one of the busiest train networks in the world. Thank God they didn't listen to those Western experts.
The chinese railway system is so much subsidized that we can effectively call it a waste of money. Like many other railway systems in the world. And what do you mean by "western" experts ?
@@shakya00 In the beginning China asked western rail corporation to help build their first high speed railway but was mocked, ended up building their own rail system and the rest is history. It's not waste of money if the rail system brought in more investments and help businesses. The increase of tax revenue can cover the cost of running these rail. Western politicians are very short sighted and can't plan beyond their term.
@@leezhieng Who mocked them? Do you have some sources?
In Wisconsin here in the US, construction work never ends like ever lol and the worst part about it is that when they do finish a road the rent seems to go up to everyone who lives on that road.
Winter destroys roads. Infrastructure might be the last thing in the US that taxes actually fund. All other spending is done by printing money.
“Rent goes up” means real estate prices increase due to the properties being more attractive to buyers. That is a good thing.
@@TravelwithMark Short sighted people can't see that, by definition
@@m2heavyindustries378 were you actually going to make a point, or just give an opinion?
@@TravelwithMark But Covid KILL Cats
No more travel next year
ruclips.net/video/bpQFCcSI0pU/видео.html
Yeah infrastructure spending is great. Here in Spain the government built airports on almost all provinces that didn't have one (lots of them of 100k population or less) and nowadays most of them are empty with 0 flights. Such a waste of resources.
@ 0:38 where did you get this stock footage please ? I need to have the whole version of that (don't Ask me, i'm a model maker and i look for ANY kind of stuff showing old trucks as visuals for my hobby)
Honestly whats the problem with operating the rail system at a loss? Services generally to not make money anyway. See: the USPS and militaries around the world. Rail systems provide huge benefits to the society by reducing pollution, reducing traffic, reducing traffic fatalities and increasing mobility (which increases commerce and development long term).
There's probably something I don't know but genuinely, whats wrong with just writing off the loss as the cost of improving society? Governments should be improving society whether its profitable or not anyhow (and long term I'd still bet it'll pay itself off in less obvious ways like I mentioned above).
Watch and don't learn.
ruclips.net/video/XEL65gywwHQ/видео.html
Exactly. Exactly economists often forget that Taxmoney is supost to create better living conditions for people and not just to help cooperations.
In some countries (including China), the energy used in high-speed rail costs more than the revenue from tickets/cargo. Where does energy come from? Some countries are net energy exporters, but China is a net energy importer, which means, the energy used in high-speed rail must be purchased/imported from foreign countries. Those foreign countries require/demand payment in hard currency or in commodities. Foreign countries do not accept "write-offs" as payment.
Socialism always ends in either hyper-inflation (money printing and shortages) or in hyper-deflation (no money and no jobs).
@@ReeseL4D
The solution long term I would say (say, over the next 500 years or so) is to ramp up globalization to the point where citizens of all countries start to feel less and less tied to their nationality, until you can erase all country borders and set up a World Government.
Then, the energy production facilities all over the world will be able to "accept write-offs as payment" instead of hard currency or commodities.
Debt. Countries don't have unlimited amounts of resources and if something is unprofitable that indicates it requires more resources to run/maintain than it creates.
In an ideal world money represents a voting share in how a country distributes it's resources, and so if something is unprofitable in this system it means that something requires more resources than people are willing to allocate to it
Obviously there are a variety of reasons these doesn't quite cache out as being true in reality but money is still the best way we have of tracking "do we need more of something or less of something"
2:03 this shot of a high speed train passing is actually filmed in the Netherlands. You can see a reflection of the NS logo and the classic white sprinter design as the train gets passed.
I'm not sure how relevant that is, since it's probably just a random bit of stock footage, but now you know.
good points well made. regulation is a hassle but less hassle than the colossal f-ups that happen when people who are sure of themselves just go ahead without doing enough background research and testing.
It's a balancing act. In the usa we have so much regulation thwt we cant afford or actually perform any real infrastructure improvements
Stimulus tends to only have very short term gains
While infrastructure projects tend to create more GDP/value over a longer period of time
@@satorudo generally yes but not always. many countries such as japan are a good example of how infrastructure projects can either bring great value or just be massive cash holes. japan has great roads and especially rail, but also a ton of bridges to nowhere, hotels funded by the government that have very few visitors, and even the good infrastructure projects are padded to over 4x their true cost because companies know the government will always pay.
in any case, UBI is in no way similar to stimulus spending.
Thank you for this video
To start a meaningful conversation on infrastructure investments, everyone on the table has to reach a consensus on the purpose of which infrastructures serve. To people including the Chinese (and me), the infrastructure should be a form of public service that provides more opportunities to society even at a direct loss. To others including EE, the infrastructure should be a business that could run itself without external aids. Obviously, they don't agree with each other, and I do believe it is futile to argue over such disagreement.
The thing is that everyone has to contribute towards a taxpayer-funded transportation system, even if the person doesn't benefit from it directly and the system runs at a loss. A for-profit system has to strike a balance between affordability and profitability, which theoretically leads to the least waste and maximum welfare. Of course, things aren't this simple in real life.
There's a limit to how much of a loss a public service should incur into, because good acounting must be made of all externalities, both possitive and negative. A high speed railway linking Beijing and Shanhai makes all the sense in the world. Now, if a politician decided to create one between, let's say, ürümqi and Lhasa, what net benefit would that make? Zero, it would just be a massive waste of money, when the few people that would take such a route would be better served by a regular train asking for a much cheaper price, and constructing such a line would also cost less to the taxpayer. France does a more or less job at getting this calculation right, Spain does a terrible one because politicians like to brag about creating high speed rail lines to every little city... and then these trains barely get used, and are a massive drain on taxpayers money.
Serving isnt cheap my man. Money has to come from somewhere and seeing as how China likes to mingle between capitalist and socialist policies it was bound to happen.
you are not wrong, but the reality is that someone will still have to sign up those paychecks
if the company itself can cover their costs, then it obvious that their service is useful to people, else they wouldn't use it.
if is the government footing the bill (ie, everyone is paying for the service regardless if it is used or not) it becomes very difficult to know if the service is useful for people or just a white elephant serving political interests.
Same in Japan. There are numerouse projects that made no economic snese ike a tunnell under Tokyo Bay going to Kisarasu a city of 135,000. Still impressive though.
"if they sell it, companies would only want to buy the high profit railways"
Tell that to the Australian government. Make them purchase both high traffic and low traffic rails.
Those low traffic lines are most likely unprofitable, so the train operating company will want government subsidies to at least break even, which defeats the point of privatizing the railway in the first place. No company is going to agree to run a railway at a loss.
Problem is that if you do that, you'll end up in a similar situation as some lines in the UK. A trains drives to a station once a week so that it is still "officially" in use...
Rail is a steel highway/road network/s and why should they have to make a 'profit' when roads don't make a 'profit'
@@chrismckellar9350 **cough** Tollbooths **coough**
@@chrismckellar9350 it needs a profit because it's owned and operated by an enterprise.
Has anybody ever noticed that in the Belt and Road initiative, China provides all parts and labor and although the country gets what's built yet it has to pay for all parts and Labor and then China charges interest for money it already has back in labor and supplies?
your information is behind. Chinese labors is only a quarter which consist of experts, engineers, team leader. They employ locals also.
yup making Tofu Hospital in 20 days by using LEGO Toys
As I watch more videos on this channel, it reinforces my view that most videos are very shallow and dont dig deep enough nor expand on other things that actually show the whole picture.
Take this video, when almost every daily necessity(electricity, water, busses, trains, etc.) are subsidized and not profitable you cant just say it failed. All profitable state owned companies like Mobile, Bank, Steel, Oil, Agriculture, etc. are paying for it. In China less than half of taxes are used for Country wide spending, most is spent on the county/city/province it comes from.
It does fail if the costs outweigh the benefit as is the case with this high speed rail (which isn't a necessity)
In the US, water and electricity aren't subsidized for regular people.
@@divinecomedian2 It definitely is a necessity in China. 80% of workers in Tier 1 cities like Beijing are from the outside.
Google Beijing on Lunar New Year, looks like a ghost town.
Filial piety is huge deal over there so people would rather own houses near their families(usually oustide cities cause their parents would usually be poor in the 1980s, as such live in the countryside) and rent aparments in the cities.
Indeed there are shortages of all the thing you mentioned are subsidized in China
@@divinecomedian2 China is way pass the peasant phase of necessity bring food and shelter.
HSR is absolutely a need now because they have all the other stuff already.
is the high speed rail in china’s context a century/multi-decade project for ROI? like the profit loss is made up by the increased profits from better economic situation from being better connected?
The profitability of the rail is an indicator of that factor. Similarly, the US paves more roads than it needs to.
Sounds like the operating costs are barely breaking even, even accounting for COVID. So, the income from them long term will not cover the interest on the debt, let alone providing a return on the initial investment. If true, the ROI won't get better no matter how far out you take the model. (OBV, this all goes away if China just writes off the debt.)
It is a fools errand. Completely subjective. Free people will get by without everything being micromanaged.
@@Josh-ks7co This is utter nonsense. The US interstate system is funded by federal fuel taxes which more than cover the costs.
@@91Durktheturk NOPE. US highways do NOT pay for themselves. People gotta pay for fuel whether they take a highway or a backroad. Highways are not generating any more money than would otherwise be collected.
Another solution is to use HSR rail as "boosted" regular railways. They do it in the Netherlands : running regular trains between low-frequency HSR trains, to better use the capacity of it and boost regular trains without the major upkeep cost of fully HSR trains. Those regular trains are slower but can still run up to 200km/h while being cheaper to maintain. It would add revenue and link smaller cities together. Which means they could eventually run fast freight trains, but still cheaper than hauling everything in trucks.
Seriously, they just built too much HSR. Their profitable routes need more tracks, but they ran out of money to build them while there is empty useless tracks.
That bill board in the terminal, I see what you did there :)
It’s good to see huge infrastructures made, but the maintenance would be a nightmare
Indeed, it ain't always, "Oh let's just build it, it'll last for 10-20 years" without maintenance ? nah it won't.
@@Oblivion889 nature's laws at work...either u will pay before or at runtime or afterwards...but u will pay since escape & bailouts dont exist in nature's dictionary 😑
Indeed that’s the issue that no one takes into account. Just like all those emptybuilding structures that remain empty today. By the time they get filled it’s gonna be time for a renovation And nothing will be working right. Just a nightmare in the making and you know for a fact it’s not maintained.
FYI the empty buildings in China are giving away to low income and poverty classes in their country, hence nowadays you don't see their homeless people sleeping in the streets like US.
You see their government actually give away housing to the poor and education along with job preparation while US just toss their vulnerable citizens under the bridge (literally!)
You should look into the recent follow up of the "ghost" cities in China. They are now full of people, it's all part of their poverty alleviation project.
@@inkbold8511 delete this, no, let people believe that China will collapse. Let them underestimate.
In Norway, we had a piece of "highway" going from Kristiansand (region capital, and 5th largest city) to the capital where the speed limits were 50 km/h (about 31 mph). There was also no passing lanes or zones for several miles either direction. Got stuck behind a caravan? Sucks to be you.
Since 1960s, the local government had one task. Figure out where the new 2 lane highway should be built, and the government would build it. There really isn't anything there except a few houses, and a village the "highway" went through.
A few years ago, the state took over and plotted a route and now we have a brand new road.
The local government had tried to figure this out for 60 years! 60! That's a lifetime! Several generations! I'm sure the over-reaching cruel goverment squashed some mosquito swamps and a farmer lost a field.. but I'm so happy we finally got a high speed highway all the way. It was the last missing piece in over 500 km of road.
Do we? I still remember there are still some kilometers of one lane road before Kragerø on when I drived on E18 from Kristinsand to Oslo.
And the speed limit is probably now only 80kph. Themaximum speed on a Norwegian motorway is only 90 kph, the slowest in the world. Why is this ?
@@huilv6270 I was pretty sure the whole distance was covered now.. but maybe sundrebru is left.. at least the speedbump of Feset is gone!
The maximum speed limit is 110 km/h. And why do you have go to blazing on the motorway? You might arrive earlier.. but your milage gets worse, your accidents are more fatal, the wear and tear on your vehicles are higher.
I don't advocate for lower (or higher) speed limits, but looking down on someone for having a maximum speed limit is odd.. Also, plenty of countries stop and 90 or 100 (with some even lower). So can't be slowest in the world.
@@AFAndersen Yes, you are right. There are still one lane road, but one can drive 80 km/h there.
Infrastructure is NOT an 'investment'. It's a 'luxury' and starts depreciating in value from the moment it's constructed. That DEFIES the definition of 'investment'.
Has Amtrak generated a profit? Infrastructure projects have so many benefits for the public good. This is where the PRC has a primary (BIG PICTURE) focus as opposed to America which struggles to even maintain its crumbling infrastructure. Even though many of these capital intensive projects do not appear to make a profit on paper, that argument fails to acknowledge the job creation in both construction and maintenance. By facilitating transportation of people and goods, GDP is enhanced. I am no economist but it would seem the "long term" benefits in a country which is so densely populated would completely exceed the initial investment.
Would've Been a great idea, assuming east china was actually growing, but it isn't