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

Figure 7(b) presents the regional impacts of the capital investment effect as a result of rail
infrastructure development in China. The general trend of impact is increasing during 20022013, but
there are also two major drops in the middle of the period. The decline in 2008 may be explained
by the investment cut in that year due to the economic recession, whereas the fall starting in
2011 is likely due to the disinvestment as a result of the HSR accident in 2011 . In terms of the
5
regional differences of impact, regions in the less developed southwest and northwest experienced
relatively larger growth during the period given the stimulus from capital investment in rail sector.
The regional impacts of the transportation cost change effect as a result of rail infrastructure
development were illustrated in Figure 7(c). Although there were some fluctuations in the
initial development period, the impacts on GRP are modest with a minor increasing trend over
time. The fluctuation of contribution in during 2003 – 2008 may be caused by the change of the
regulatory policies on rail operating speed management, whereas modest increasing trend after
2008 may reflect the fact that transportation costs did not experience a substantial change
during this period of time as most rail systems were still under construction.

The regional impacts of productivity change effect from rail infrastructure development are
illustrated in Figure 7(d). Generally speaking, a productivity increase in rail transport sector
is associated with around a positive impact on GRP during the investigation period with an
average magnitude at around 0.7 percent. However, there were also two major declines in 2009
and 2012, which is likely due to the following two reasons: First, since the productivity variable
is essentially a labor productivity which reflects a ratio changes in both passenger-km (PKM)
and the number of employees, the major decline of impact in 2009 is most likely caused by the
drop of passenger rail demand due to the effect of recession, whereas the decline in 2011 is
likely to be caused by the increase in the number of rail sector related jobs due to the openings
of new HSR services. Last but not the least, the results of the simultaneous simulation that
incorporated the four effects are illustrated in Figure 7(e). It is clear that although the economic
contributions from rail infrastructure development tend to decline given the influences from
economic recession, the overall economic impacts are positive.

a. Billions of 2014 dollars.
b. Millions of jobs.

c. The results reflect a simultaneous effects of land use, capital investment, changes of transport
cost and change of productivity.

5 A HSR accident occurred on July 23 2011 caused 40 deaths and 172 injuries, which was later identified caused by equipment
defects under an extreme weather condition. As a result, the pace of the massive rail development was slowed down given the
safety concern (Chen and Haynes, 2015).

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