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Measuring The Long-Term Regional Economic Impacts of High-Speed Rail in China Using a Dynami

track length of HSR also experienced a significant increase during the past decade. By the
end of 2016, the total rail track in operation in China has reached 124 thousand kilometers,
which includes 22 thousand kilometers of HSR connecting more than 400 cities nationwide. As a
matter of fact, the pace of development is so rapid that it has exceeded the objectives outlined
in the 2004 and the 2008 planning strategies. It is clear that with more people begin to enjoy
the benefits of HSR for intercity travel, its regional economic impacts are likely to be even
more substantial. In fact, our earlier assessment at the national level already shows that the
deployment of HSR in China during 2002-2013 has contributed to a growth in GDP and welfare
by 10 percent and 8.5 percent, respectively (Chen et al., 2016).

Source: Author’s collection.

Figure 1. Evolution of High-Speed Rail Ridership and Track Length in China

Such a rapid expansion of HSR would not be achieved without a strong commitment and support
of the central government in China. As revealed in Chen et al. (2016), public investment in
rail sector, particularly in HSR development, grew rapidly, with an annual average rate of 20
percent since the implementation of the initial rail network development strategy in 2003.
The latest objective of total rail track length outlined in the 2016 planning strategy has been
expanded to 150 thousand kilometers, 30 thousand km of which will be HSR PDL. In particular,
the national HSR trunk networks have been expanded from the previous plan with a 4 east-west
bound and 4 north-south bound trunk lines to a system that consists of 8 east-west bound and
8 north-south bound HSR trunk lines, most of which will be designed as PDL with a speed of
250 km/h or above. The entire HSR system is expected to be completed by 2025. The ultimate
objective is that more than eighty percent of major urban areas in China will be served by HSR,
which is likely to significantly reduce the intercity travel time among contiguous provincial
capital cities to 1-4 hours and 0.5- 2 hours for a trip that is within a megalopolis.
Despite these facts, skepticism about the effectiveness and economic values of HSR investment
was also raised by some scholars. For instance, Button (2017) indicates that although politicians
and rail enthusiasts have widely supported HSR infrastructure investment as a catalyst for
economic development, their arguments on the anticipated economic growth effects from HSR
are generally overly optimistic because most of the conclusions were derived from ex ante
assessment in which the actual costs were often underestimated. In the case of China, Wu
et al. (2014) suggests that while a limited number of HSR developments in the richest and
most densely populated areas are reasonable due to the relative low value of time in China, a
massive approach to HSR infrastructure development is problematic as new conventional rail

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