China & / vs Russia

An uneasy neighbour chugging forward with massive railway network investment

This is a short morning clip about China steaming ahead, byoyed by available capital, to build more than 6 800 kilometers of new rail lines in 2019, a 40 per cent increase over 2018 and overall invest over USD 125 billion in new railway projects approved last month, as reported by FT.

FT from Monday, January 7th

It’s southern neighbour, Russian Federation in December approved infusion of capital into Russian Railways that is dwarfed by the China move: a meagre USD 800 million.

China will add 6,800km of rail lines this year, a 40 per cent increase on 2018, according to state-run China Railway. The plans include 3,200km of high-speed rail.

ING, the Dutch bank, predicts a Rmb4tn fiscal stimulus from Beijing this year, which will help cushion downward pressure on demand from the trade war with Washington.
“Though some fiscal money will be used for debt repayment and loan rollovers, the rest will go into infrastructure projects, which will support manufacturing activities, even if the trade war continues to escalate,” said Iris Pang, ING’s chief China economist.
Shanghai will add six subway lines and three inter-city rail lines priced at Rmb298bn, while the city of Wuhan in central China will add four subway lines and four inter-city lines costing Rmb147bn. Jiangsu province in east China will build Rmb218bn of inter-city lines as it seeks to connect its urban centres with populations above 200,000.

Where Russia is larger in size, the railway network of 87 000 kilometers is less than the Chinese network of over 130 000 kilometers, as the network also undergoes upgrades to support high-speed trains where China is a world-leader.

It also leverages its producing might, financial capacity and international status to launch international projects, building a link in Pakistan and several African countries.

China has established a foreign policy still backed by international capital, where Russian steps are mostly met with ignominy by the Western powers, cutting it hard from liquidity pools that the Russian southern neighbour enjoys. One would not comment on the means to achieve aims — yet the massive investment following China’ peaceful rise is in sharp contrast with sovereign steps of a former superpower — highliting its diminished status with spurs of rocket launch drills and expensive military operations, without the core component of values it brings to multi-dimensional and interconnected global community.

The soft expanse turns Sino-Russian cooperation in coopetition, with Far East, enfeebled by population flight, local corruption and capital stemming to major cities in the western part of the country and not to regional local hubs — becoming staging ground for economic immigration of Chinese merchants — where China is financing creation of new jobs to satisfy the equation of continuous economic growth and creation of new jobs it requires.