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Old July 25th, 2013, 06:56 PM   #6241
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Quote:
Originally Posted by chornedsnorkack View Post
How much of these 100 milliard go to building new high speed railways, and how much go to building new high speed trains?

Do the existing high speed railways have any space left for more high speed trains, and are there any plans to increase frequencies on existing high speed rail lines?
Er... you should be asking this the Chinese MOR, not me
I was just countering a funny claim by Sopomon.
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Old July 25th, 2013, 08:46 PM   #6242
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Originally Posted by gdolniak View Post
Welcome to the club, Pansori ;-)



Not that stupid, Pansori. Read this recent article, from no-one else but the almighty China Daily quoting Xinhua:



This is about management though not related to investment.

This happens all the time with China HSR discussion. With each reply subject distort to smt else from the original point

Also, I am pretty sure if prices become like airline tickets it will create fluctuations which will result in higher prices and during holiday season it will affect the poor the most.
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Old July 25th, 2013, 11:01 PM   #6243
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Quote:
Originally Posted by xinxingren View Post
听说 gossip from other forums that the total number of seats available is divided into pools between outside agents, self-service machines, and the station ticket seller windows. At some short time (30 minutes?) before departure, any remaining tickets suddenly appear on the station clerks' machines. Might be urban legend ...
Not the case between Shanghai and Nanjing, if I arrive at the ticket kiosk half an hour earlier almost all tickets for the next couple of hours are gone.
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Old July 26th, 2013, 01:34 AM   #6244
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Quote:
Originally Posted by foxmulder View Post
This is about management though not related to investment.

This happens all the time with China HSR discussion. With each reply subject distort to smt else from the original point

Also, I am pretty sure if prices become like airline tickets it will create fluctuations which will result in higher prices and during holiday season it will affect the poor the most.

Not sure if you've flown very often, but there's a simple workaround to that: buying your tickets in advance.

Flying between London and Australia, you know that it's going to be busy in December, so you book your tickets in March to get the best prices.

This can easily be applied to the ticket vending system for CHSR.

Although, there are many other issues that need to be fixed, such as the requirement of government ID (not too bad for Chinese citizens, terrible for foreigners, adds much unnecessary complexity to proceedings). The ticket allocation methods which seem to leave 6/8 carriages on the train packed and the others entirely empty are problematic too, not least that the government allocates set amounts to travel agencies etc. which reduces flexibility, meaning that demand can't be adequately met.

In time the ticketing issues can easily be sorted out.

In terms of investment, it's less a case of over-investment as it is poorly managed projects and the build timeframes being far too short. Corners have been cut and some of the viaducts may need some serious repairs in a shorter time than expected. This will add a large cost later on in the period, especially with the size and scale of the network.
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Old July 26th, 2013, 06:11 AM   #6245
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Quote:
Originally Posted by foxmulder View Post
This is about management though not related to investment.[...]
The management needs to get some extra kuai to pay off the debt, right? So, if they could not do it, any future railway investment will be affected by that, because who will want to lent money for project that transports air 300km/h?

The article I quoted, is the response to The Economist article. In the China Daily article, Chinese government in the mean of Railway authorities, have concluded that: (1) the price tickets are too high for ordinary people, (2) on some lines the trains run empty, while on some there simply isn't enough for them, and (3) "liberalize" (in some way) prices for the 1st class and above. So The Economist was in some way right in their article. It wasn't negative about CHR.

In a way, this is very interesting. China has now redesigned Railways (get rid off the Ministry of Railways) and by the means of a massive debt over their head (railway construction, etc.) they are forced now to reform themselves. Small steps with the tickets, but let's wait and see how it will turn out on the global scale.
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Old July 26th, 2013, 06:56 AM   #6246
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Some serious commitment from the Chinese government toward the railways:

Quote:
China Unveils "Mini Stimulus" Targeting Small Companies
07-25 14:41 Caijing

China's State Council on late Wednesday unveiled a tax break plan for small companies in the country, as part of a broader plan to inject momentum into the world's second-largest economy.

The State Council, the cabinet, said it will scrap all value-added and operating taxes on businesses with monthly sales of less than CNY20, 000 ($3,250). It said the tax cut, which takes effect on August 1, would benefit over 6 million small companies, which employ tens of millions of people.

The announcement did not give a time span that the new measure will last, but analysts are expecting it to become a norm.
Some 12 billion yuan of revenue will be exempted for the companies in the rest months this year, according to a calculation by the Ministry of Finance.

"The policy shift will benefit the small and micro-sized companies directly, encouraging business start-ups, and reviving confidence on the development of such companies," the Ministry of Finance said in a statement published on its website, "It can also make the companies function better in stabilizing growth and creating jobs."

Yang Zhiyong, a researcher with the Chinese Academy of Sciences, applauded the move for its role in supporting a "comprehensive" development in the economy, and expected that it could be a long-standing policy.

A "healthy" development of China's economy and society should "never rely solely on big companies," he added, referring to mostly the state-owned enterprise.

Although more than 90 percent of companies in China are SMEs (small and medium-sized enterprises), the economy is still dominated by state-owned enterprises (SOEs), which are typically large in scale, low in efficiency and lavish in spending due to easy credit.

But it seems that the government has become more aware of the importance of SEMs in rejuvenating the world's second-largest economy, especially that in the job market.

While contributing 60 percent of GDP and half of tax revenue, SMEs in China provide jobs to over 90 percent of employees in the country, government data showed.

That echoes a concern of Li Keqiang, the premier, that a slowdown in the economy below 7.0 percent could deal a heavy blow to the employment, a potential source of social unrest.

Addressing a series of economic meetings in recent days, the premier said the government still maintained an official target of 7.5 percent in growth, but a growth of below 7.0 percent will be intolerable.

China's slowdown is still deepening with manufacturing activity shrinking to an 11-month low in July, according to a preliminary survey conducted by HSBC. Growth in the country sank further to 7.5 percent in the second quarter.

While hailed by some economists, the tax cut is "not big enough" in the eyes of company owners. The number of businesses is quite limited falling within the range of below 20,000 yuan in monthly sales, especially in the manufacturing sector, the Beijing News reported, quoting one of the business owners.

Tax cut could be more fined tuned targeting different kinds of companies, the state-run newspaper said.
"The tax cut is slightly small in terms of scale," said Yang Zhiyong, "Authorities should continuing hiking the threshold of related taxes to make more taxpayers involved."

His argument was also based on the fact that tax burden for business in China is higher than its peers, with tax rate at roughly 40 percent, compared with an average of 24-27 percent in the OECD countries in the past 30 years, according to a report issued by the Ministry of Finance.

Wednesday's tax cut was the most important part of a three-pronged program nailed at that meeting to support the economy. Others include a reduction of costs for exporters and guarantee of funds for the construction of railways.

Also on Wednesday, the National Development and Reform Commission, the top economic planning agency, announced plans allowing easier access to financing by small companies. Measures published in a statement on the NDRC's website including the expansion of a pilot program for small companies to issue collective corporate bonds.

http://english.caijing.com.cn/2013-07-25/113087394.html
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Old July 26th, 2013, 07:17 PM   #6247
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Old July 26th, 2013, 08:03 PM   #6248
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Quote:
Originally Posted by Sopomon View Post
Not sure if you've flown very often, but there's a simple workaround to that: buying your tickets in advance.

Flying between London and Australia, you know that it's going to be busy in December, so you book your tickets in March to get the best prices.

This can easily be applied to the ticket vending system for CHSR.
Yeah... That's why I don't like flying.


Quote:
Originally Posted by Sopomon View Post

In terms of investment, it's less a case of over-investment as it is poorly managed projects and the build timeframes being far too short. Corners have been cut and some of the viaducts may need some serious repairs in a shorter time than expected. This will add a large cost later on in the period, especially with the size and scale of the network.
We will see that.
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Old July 26th, 2013, 09:06 PM   #6249
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Fellows :

What do you think about this article???? Especially the point on the price/cost of HSR which has been the major negative sentiments of a lot of western articles regarding the Chinese HSR network and investment.

-----------------------------------------------------------------------


China's New Bullet Trains Won't Eat Up Airline Profits
Beth Gardiner, Journalist 18.07.2013
China is already home to the world's longest high-speed rail line and some of its fastest bullet trains, and the government is pouring billions of yuan into building new capacity. In fact, China plans to add more than 3,100 miles of high-speed rail track by 2015, bringing the total length of the system to about 9,000 miles. Meanwhile, China's airlines are also growing rapidly, with nearly 100 new airports planned by 2020.


"Can Airlines Beat High-Speed Rail?"
The turbocharged expansion of ultra-fast train networks has led some investors to question whether bullet trains could poach passengers and profits from airlines, Credit Suisse transportation analysts Davin Wu and Timothy Ross explained in a report called "Can Airlines Beat High-Speed Rail?" "The major concern of the market is that the airlines will cut airfare to protect their market shares, and that load factors (a measure of how full flights are) could be substantially lower than the levels before the launch of high-speed rail," they wrote. However, the analysts go on to say that such fears are probably unfounded. China's fast-growing middle class is more mobile than ever, and should do enough traveling in the future to keep both sectors healthy. In addition, the competition will be most heated on short routes, a realm in which airlines have already shown a willingness to cut their losses early and avoid costly price wars.

Travel Increasing Despite Economic Slowdown
Current data suggest the possibility that the growth of the middle class doesn't have to result in a zero-sum fight-to-the-death between the two forms of transport. According to the International Air Transport Association, China's domestic passenger travel rose by 13.4 percent in May, the healthiest growth rate of any country despite a continuing slowdown in the Chinese economy. Meanwhile, more than 1.7 billion passengers rode the train last year, up nearly 5 percent from the year before, according to Bloomberg. "There is enough room in that internal market for everybody to have a piece of the pie," said Amir Sharif, an operations management professor at Brunel Business School in London, calling the threat of airlines losing out to rail "a red herring." That's not to say that high-speed rail won't have a marked effect on certain parts of domestic airline's business. Credit Suisse analysts concluded that airlines stand to lose about 6 percent of their passenger traffic on 25 key domestic travel routes between 2013 and 2015 due to competition with the railroads. The highest attrition rates will occur on routes of less than 310 miles, where train travel tends to be faster, more convenient and cheaper.

Airlines Adapting Rapidly
Chinese airlines have already showed a canny knack for maintaining profit margins by quickly responding to increased competition. Last December, when China's newest high-speed rail line opened – a 572-mile high-speed line connecting the northeastern cities of Harbin and Dalian – most airlines simply left the market, cutting routes that overlapped with the rail corridor and shifting planes to other, less competitive routes. "We see this swift capacity adjustment, instead of cutting their airfares and profit, as a good sign that airlines can be nimble in competing [with bullet trains]," Credit Suisse analysts wrote. "While rail will remain a major competitor in the domestic market, its impact has largely been reflected in airline fleet planning strategies."

Service Expansion Will Boost Capacity
Air China, which does most of its business on international and long-haul domestic routes, is likely to be the airline least affected by high-speed rail competition, Credit Suisse analysts said. China Southern Airlines, the country's largest carrier, will suffer a greater loss of passengers, particularly along the new Beijing-Guangzhou train line, but should be able to adapt quickly. The airline's high-growth western hubs of Urumqi and Chongqing, along with an expansion of service to the United States, Europe and Australia, will help boost capacity by about 9 percent annually over the next three years, Credit Suisse said, offsetting losses in domestic routes competing with high-speed rail. Assuming that western China and international travel continue to grow quickly enough to fill the new seats, profit growth should rise steadily too.

Taiwan Setting a Precedent
The caveat: Chinese consumers have shown themselves to be very price-sensitive, and a high-speed rail fare cut could pose a serious risk to airlines, Credit Suisse warned. Taiwan offers an interesting precedent. In 2007, the year high-speed rail lines opened for business in Taiwan, air carriers pared back capacity on the critical route from Taiwan city to Kaohsiung, the territory's second-largest city, by nearly 44 percent. In an effort to undercut train prices that were 15 to 32 percent lower than airplane tickets, airlines cut fares by an average of 36 percent. Not to be outdone, high-speed train operators responded by slashing their prices an additional 20 percent. At that point, the airlines cried mercy: By the end of 2008, every airline with the exception of Mandarin Airlines had stopped flying the route. And Mandarin eventually conceded defeat in 2012.

Lowest Rates in the World
For now, a major move to cut rail ticket prices doesn't seem likely, the analysts said. For one thing, though bullet trains are significantly more expensive than China's highly subsidized "slow trains," the rates are still relatively affordable – an average worker's monthly income buys 24 tickets on a fast train in China, higher than the 23-ticket global average. In fact, Chinese high-speed rail fares are the lowest in the world, with an average price that is 36 percent lower than the cost of an airline ticket. What's more, the Chinese government has no interest in allowing a hard-fought price war and officials will be able to keep a closer eye on price competition now that officials have dissolved the Ministry of Railways and merged railway regulation into the Ministry of Transportation, which also regulates airlines, shipping and road travel.

In the longer-term, says Sharif of Brunel Business School, airline carriers need to understand the segmentation of the market and try to serve both the wealthy business passengers who likely already prefer flying and draw in the less affluent customers who might otherwise choose to save money by taking the train, even on longer trips. And how can they do that without having to resort to margin-destroying price cuts? The same way that every service business retains its customers, whether it's an airline or a bank: by providing the best customer service possible. "Those airlines that have tight relationships with customers will continue to hold them," he said.

https://www.credit-suisse.com/ch/en/...e-profits.html

Last edited by stoneybee; July 26th, 2013 at 09:16 PM.
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Old July 27th, 2013, 03:37 AM   #6250
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Quote:
Originally Posted by foxmulder View Post
Yeah... That's why I don't like flying.
Well it's a choice between paying higher prices, or the chanec of having no available tickets at all.
I'd prefer to pay more if I really needed to get somewhere, as opposed to the knowledge that I could be paying less, but that all the tickets have sold out.


Stoneybee, the important thing to consider is that, due to the fact that the PLA controls most of China's airspace, China has the worst incidence of air travel delays in the world. This is mainly due to the fact that there are only a few narrow corridors that commercial flights are allowed to fly on through these PLA zones.

Until some kind of negotiation is made with the PLA, air travel is at a fundamental disadvantage.
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Last edited by Sopomon; July 27th, 2013 at 12:20 PM. Reason: hurrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
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Old July 27th, 2013, 04:01 AM   #6251
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@stoneybee

In my opinion, It is a solid article.

Segmentation between HSR and airlines will be at ~900km, in my opinion as Harbin to Dalian line shows. And if speed increases, naturally it will be a longer distance. For example if speed to be 380km/h in Beijing-Shanghai line, I think train will win even at there at ~1300km.
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Old July 27th, 2013, 05:35 AM   #6252
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Quote:
Originally Posted by Pansori View Post
Oh wow it's TE's readers club here. I happen to be one too... For the past 10 years at least


OK, take this for example.
http://www.economist.com/node/21542420

I mean cooooooome oooon. They do try to put some points there but are they really giving us any detail or insight? No. Jut general, vague and 'fits anything' kind of arguments that you could use for absolutely anything. Is that how a well written article should look like? The author clearly has zero knowledge on the topic yet 'hat to write something'. Its almost literally blah blah blah blah it's kinda bad what China is doing blah blah blah.

The article is clearly negative yet it doesn't provide any concrete and strong points besides the vague and repetitive ideas of safety (Wenzhou accident.... By that time it had been discussed like a million times and concrete measures taken).

Or this
http://www.economist.com/node/18488554

One article claims that fares are too high for 'ordinary people' yet another one says that fares need to be 'liberalized' to help cover costs (read increased).

OK that might not be such utter bullshit with five factual mistakes in one sentence as that Reuters article citing Roubini but the points made by TE are vague, provide no evidence or details, are uninsightful, unprofessional , cite unnamed 'experts' and are very much empty blah blah blah'ing and yet ALWAYS have a strong negative note to them.
TE was much better under Bill Emmott, then it is now. It was much more focus on economics content rather than politics, and it does do on the ground journalism rather than Standard Form* when reporting on China.

I found this as the most insightful article written on China by any western media. It's from Economist's old day, when is gone forever with the wind.
http://www.economist.com/node/5660833


* Copy the first 2 paragraph from other Chinese news sources (and for some reason they all like to use "Chinese State Media" rather than cite specific source), then write the body of the article as the author's reaction and opinion to that news, and finished article with references of all recent bad events/statics in China, relevant or not.
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Old July 27th, 2013, 11:04 AM   #6253
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"The [subprime] economist" and other anglo-pornographic newspapers are not just pathetic,
but sometimes a true cancer for us, westerners, first.

Last edited by Norge78; July 27th, 2013 at 05:25 PM. Reason: "Libor" journalism
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Old July 27th, 2013, 05:33 PM   #6254
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Quote:
Originally Posted by Sopomon View Post


Stoneybee, the important thing to consider is that, due to the fact that the PLA controls most of China's airspace, China has the worst incidence of air travel delays in the world. This is mainly due to the fact that there are only a few narrow corridors that commercial flights are allowed to fly on through these PLA zones.

Until some kind of negotiation is made with the PLA, air travel is at a fundamental disadvantage.
It was true in the good old days, but do we have firm evidence that this is still the case? I am not sure. Do share if you have more evidence.

My understanding of the cause of frequent delay has more to do with basic management effectiveness and the lack of an integrated air traffic control network that China is still in the process of building.
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Old July 27th, 2013, 06:18 PM   #6255
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Quote:
Originally Posted by stoneybee View Post
It was true in the good old days, but do we have firm evidence that this is still the case? I am not sure. Do share if you have more evidence.

My understanding of the cause of frequent delay has more to do with basic management effectiveness and the lack of an integrated air traffic control network that China is still in the process of building.
This news was on recently. Check out here.
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Old July 27th, 2013, 07:35 PM   #6256
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Originally Posted by Norge78 View Post
"The [subprime] economist" and other anglo-pornographic newspapers are not just pathetic
Not that it has relevance to this thread, but TE was critical to the US housing market early on. At least that was where I heard of it first, well before the crisis.
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Old July 27th, 2013, 08:47 PM   #6257
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TE is a good magazine, but they aren't Gods and can't always predict the future.
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Old July 28th, 2013, 10:50 AM   #6258
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TE is a good magazine, but they aren't Gods and can't always predict the future.
Nope, good toilet paper. Anyway, you can find easily these "gods" () drunk in phuket (reports from asia)


"TE was critical to the US"

what a joke
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Old July 29th, 2013, 03:19 AM   #6259
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"It feels like a time warp"

Nice take on the project.



Quote:
"High-speed Silk Road" to enliven NW China

July 28, 2013


A high-speed railway that will enable passengers to travel the 1,900 km between the northwest Chinese cities of Lanzhou and Urumqi in eight hours upon completion in 2014 has been hailed for the trade boost it will bring.

The line has been dubbed a "high-speed Silk Road" for the role it will play in transporting goods and people along the historical network of trade routes which still play such a huge part in local commerce. In ancient times, it would have taken two months on camel-back to traverse the branch between the cities now known as Lanzhou and Urumqi.

"It feels like a time warp," says Wu Hanfei, an engineer with the high-speed railway construction project.

Wu came to the construction site at Gaotai County in Zhangye City, Gansu Province, in June 2010 to join thousands of workers.

In his spare time, Wu would look at a nearby railway track which opened to traffic in 1962. The track immediately became important for its ability to shuttle passengers from Lanzhou to Urumqi in 20 hours, and it will continue to operate.

When the new railway opens to traffic in October next year, however, the high-speed line will mostly serve passenger trains while the old one will serve cargo trains. At that point, the old railway will be freed up to transport 424 million tonnes of goods annually, twice as many as at present.

"This will significantly improve the transport capacity in northwest China," says Wu Tianyun, head of the Lanzhou Railway Bureau.

In ancient times, the tough travel conditions made journeying west a painful decision. It was often a one-way trip, with many people finding it impractical to return to the Central Plains.

The new railway will be linked to the country's railway network from Lanzhou after operation. Traveling from Beijing to Urumqi, which are more than 3,000 km apart, will take less than one day.

"By then, traveling west will be enjoyable for people living in central and eastern China, once the ancient Central Plains, because they will get to see historical relics, beautiful scenery, and exotic tradition without fearing they can never come back," says Wu Tianyun.

Cutting the journey time from months to hours, the high-speed Silk Road will change not only people's ways of traveling, but also northwest China's economic structure.

Starting from the ancient city of Chang'an, now known as Xi'an, the Silk Road extends to the Mediterranean region in the west and the Indian subcontinent in the south. Its total length is over 10,000 km, with 4,000 km located within China.

The cities now known as Lanzhou, Dunhuang, and Urumqi are all important stops on the route.

While silk continues to be the key trade good, agriculture, tourism, and the new energy and logistics industries have all boomed along the present-day Silk Road.

In the first four months of 2013, Dunhuang, which holds historical relics relating to the early Silk Road, received 750,000 tourists and a total revenue of 690 million yuan (112.5 million U.S. dollars).

And Wei Zhizhong, director of the Dunhuang Tourism Bureau, predicts, "After the operation of the high-speed railway, we'll see skyrocketing numbers of tourists."

While tourists are an important commodity traveling predominantly east to west along this route, grapes are a big deal going in the other direction.

The fruit used to be restricted largely to west China, with only wealthy families in the Central Plains able to afford it. Nowadays, more than 100,000 tonnes of grapes are transported each year from Dunhuang to central and east China. Some 120,000 mu (8,000 hectares) of land in Dunhuang are dedicated to growing the juicy orbs, and this is expected to expand.

"In ancient times, it would take 5,000 camels walking nearly two months to transport 100,000 tonnes of grapes from the west to central and eastern China," explains Niu Xinjun, a farmer in Qili County of Dunhuang.

In fact, wherever one looks along the Silk Road there are foundations for healthy growth that the new railway will surely build upon. While the Gobi Desert used to mean toil and death, everything seems lively today.

In the suburbs of Yumen City in Gansu, 1,100 wind towers stand along 40 km of desert. Enterprises are transporting steel and iron through railways to Yumen and building bases for new energy and manufacturing industries.

"By 2015, annual sales for these industries will reach 15 billion yuan," beams Yumen mayor Song Cheng.
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Old July 29th, 2013, 04:07 AM   #6260
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The Xinjiang Autonomous Region has tremendous economic potential because there are known mineral riches and is very productive agricultural region anywhere near a water oasis. Small wonder why they are building that high-speed line from Urumqi to Lanzhou.
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