China May Help Finance California High-Speed Rail

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Originally published on EV Obsession.

In a rather interesting turn of events, it appears that China Railway International is working with the Chinese Export-Import Bank to potentially finance a portion of the proposed Californian high-speed rail line between Los Angeles and San Francisco, according to reports.

The Chinese organizations responded to the California High-Speed Rail Authority’s “expressions of interest” — apparently, shortly after a deal was reached with XpressWest Enterprises to partly fund the Victorville (California) to Las Vegas private high-speed rail line.

california high-speed rail

So, China is now looking to fund Californian high-speed commuter rail projects, huh? Hmm, who would have predicted that 50 years ago?

Reuters provides more:

China Railway International, the Chinese team proposed it could provide big elements of the project, including design expertise, construction, equipment procurement, and rolling stock. It also proposed financing from the Export-Import Bank of China.

By packaging large pieces of the high-speed rail line together, for delivery by a single contractor, the project’s cost and construction timeline would be greatly reduced, the team proposed.

The United States is a key target for China’s rail industry, even though policymakers have been split over the need for high-speed rail and some have taken a dim view of Chinese involvement. Last month, a unit of China’s CRRC Corp, the world’s biggest train maker by revenue, agreed to a deal to help build a high-speed link between Las Vegas and Los Angeles.

California still needs a large amount of funding to complete its rail line. About $13.2 billion of the estimated $68 billion has been raised through state and federal funds, plus a pledge of cap-and-trade proceeds, or funds paid by companies to offset carbon emissions. The Chinese team proposed that under “appropriate loan conditions,” the Export-Import Bank of China could “satisfy the financing needs of the project.” But the Chinese also warned that California should provide additional public financing and guarantee future project debt to appease uneasy investors.

This news follows news that Chinese firms have been winning a number of major rail contracts in Russia lately.

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James Ayre

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

James Ayre has 4830 posts and counting. See all posts by James Ayre

18 thoughts on “China May Help Finance California High-Speed Rail

  • The Las Vegas to whatever part of Southern California is a pipe dream and will never get built PERIOD.

    • I thought we were talking about LA-SF, not a link to Las Vegas.

  • $64 Billion would pay for a lot of solar panels and wind turbines doing a lot more for the environment than a high speed rail which will only serve business customers and always need a subsidy.

    Families drive LA-SF since it is so much cheaper and they have to rent a car when they get there anyway. More state subsidies for business is NOT what we need.

    • I rarely use a car when visiting San Francisco. The real cost of driving is 3x the cost of the fuel.

  • Sounds dangerous. I just heard a building collapsed in China killing many construction workers. I don’t think it would be safe to ride on this project that is being delivered in large packages to reduce the cost.

  • The Hyperloop could make HSR obsolete. We might know inside of two years.

    • But will it pan out?

      • That’s what we will have to wait to see.

        Every critique I’ve read that said it won’t work (2 or 3) – “engineers” finding fatal flaws – obviously hadn’t read the details. One said the tube would need to be larger in order to stop air from being compressed ahead of the pod and causing pistoning. A quick read would have told him that the pod sucks in the air ahead and squirts it out to create forward movement.

        At this point I figure all the engineers at Tesla, SpaceX and the other companies involved, plus hundreds/thousands of engineers have given it a good read and a hard thought. I’m putting the probability of success higher than 50%.

        We’ll see….

    • Agreed. Why are the Chinese not talking with Musk about this? I attended VERGE last week and one of the guests was Dirk Ahlborn, CEO of Hyperloop Transportation Technologies. He said that they plan to start building the first segment of the Hyperloop in 2016. Seems to me that is would be cheaper and less risky to have Musk build the Hyperloop, than government building HSR.

      • I imagine Chinese Railway International, who have produced HSR trains in China, would like to build those same trains in the US rather than throw their money at Musk to build a technology they have no experience with. Hyperloop may eventually destroy CRI’s whole business or at least force them to retool/re-educate in order to build hyperloops themselves. Maybe they’re even pushing for the HSR project to move faster in order to “derail” the hyperloop. Ha ha.

        • dont really see why they need to have the train made in the states since the locomotives are jointely build by a bombardier sub company im figuring they could just assemble some in their plants in canada with final assembly in platsburg new york that would most likely be nafta kosher. so you get to have trains named bombardier Zefiro 380 instead of china railway crh380a just a name tag really ;p dont thing they have to invest much money to get that done.

          the elevated railways / tunneling tech is what makes china stand appart from the rest

          but i dont have much hope for this project as a whole the efficient chinese railroad making machine is going to meet the bureaucratic north american behemoth and they will discover why you cant get anything done in NA.

      • Musk isn’t directly involved in the Hyperloop. His plate is full. I think Tesla/SpaceX are doing some assistance with building one of the two test tracks, but not planning on being involved in large scale applications.
        Apparently construction starts on the five mile test loop in the next week or two. It might be 2017 before we see full speed tests being run. If initial test results look good we may see some HSR projects put on hold and perhaps switched to HLoop.

  • “By packaging large pieces of the high-speed rail line together, for delivery by a single contractor, the project’s cost and construction timeline would be greatly reduced, the team proposed.”

    Sounds dangerous. There are often construction shortcuts taken in China that result in catastrophic failure.

    • Projects built in the US will have to be built to US standards.

      • Hmmm. US standards… Except the Chinese are traditional bribe payers in addition to cutting corners. The combination is the Chinese “business plan” on construction projects.

        • OK, you’ve demonstrated your anti-China feelings. Time to move on.

          • Capitalist Clowns who put profit over safety and national interests should be opposed by all. It is not so much anti-China feeling as much as a survival instinct.

            The capitalist clowns who want to make money without regard to higher political concerns are a problem the world over. Osborne of Britain is a good example of how capitalist clowns have gotten the politicians to follow along. But the capitalist clown does not have full sway over the situation and politicians will act against business when they think they must for their political career. For instance on climate change. So Let’s vote (when allowed), participate in political discussion and protest.

            Now China has to live in this world. The entire world has looked on while China builds sand islands and dreams of becoming a war criminal. China lives in a community and that community does business together. But at the core of that are the individual people, who form bonds beyond nations. And we all can make a choice to support or reject the behavior of China. The only people that are interested in supporting Chinese aggression are Chinese. The business man will preference to make a profit but can be overruled.
            1). Boycot Chinese merchandise. I have heard the suggestion that we should just buy only food. A boycott against anything except consumables WOULD be effective.
            2). Hold signs outside of Walmart or other stores that have profited from Chinese low cost sales
            3). Call or write your representatives and tell them to support the TPP trade agreement.
            4). Do not travel to China for any reason.
            5). Organize marches demanding that human rights be respected and the ecology of the reefs be restored and economic reparations be given for loss of fishing.

  • This might be helpful. If the U.S./China economic ties are strong enough through cooperation on various projects, we might be able to quell the military forces on both sides that seem to only want confrontation.

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