Lessons from China's bullet train

China indeed impresses us with its high-speed rail (HPR) network. With a total length of 42,000 kilometers (26,000 miles) by the end of 2022, China's HPR network operates newly built rail lines with a design speed of 200-350 km/h (120-220 mph). But not long ago, in 1993, commercial train service in China used to run at an average speed of only 48 km/h (30 mph). Hence, it's no wonder why Chinese leader Deng Xiaoping got deeply impressed by Japan's Shinkansen, the world's first high-speed rail system. Consequently, under the leadership of Deng Xiaoping, planning for China's current high-speed railway network began in the 1990s. What was in that plan? Did it focus on borrowing from Japan and giving contracts to Japanese companies to replicate Japan's Shinkansen in China?

It could have been an easy path for the Chinese government to show quick and proven results of development success through importing technology by spending proceeds of labour export and borrowing. But China did not opt for this easy path to show quick results. Instead, China embarked on an unproven and lengthy journey, initially expensive too. China overlooked the common saying-do not reinvent the wheel. It also did not pay heed to-if it is cheaper to buy, do not make. China also did not limit itself to replicating the world's best HPR; instead, China pursued the path of assimilation and advancement for having more than the state-of-the-art-opening the window of creating economic value out of locally produced knowledge and ideas.

Of course, having a $318 per capita GDP in 1990, China was a financially poor country. But the planning of HPR crafted the path of being rich by advancing HPR, as opposed to importing it. In December 1990, the plan of the Ministry of Railways (MOR) kicked off the HPR programme by submitting a proposal to build a high-speed railway between Beijing and Shanghai. Unlike other less-developed countries having similar income levels, China attempted to develop HPR by leveraging domestic engineering capacities. Consequently, using domestically produced DF-class diesel locomotives, in December 1994, China succeeded to offer sub-high-speed service of 160 km/h (99 mph). Subsequently, the line was electrified in 1998 to increase the service to 200 km/h with Swedish-made X 2000 trains.

But the initial success of high-speed trains was not sufficiently reliable for commercial operation. Hence, China opted to learn from Japan's Shinkansen and other HPR providers such as Germany's Siemens, French's Alstom, and Canada's Bombardier-by giving contracts to foreign suppliers to build only a small portion of the network. The purpose was not to abandon the home-grown capability. Instead, the underlying objective was to augment already developed capability through foreign technology assimilation to acquire the capability to make their HPR even better performing than Japan's Shinkansen. In retrospect, China's homegrown approach was a vital precursor for foreign technology assimilation (often, known as technology transfer), and subsequently improve it.

To facilitate technology transfer, China required foreign suppliers to adapt their HPR train sets to China's common standard, as opposed to just deploying what they had. It also required making parts and assembling units through local joint ventures (JV) and cooperating with Chinese manufacturers, instead of just importing proven finished units and deploying them in China. Through the process, Chinese entities succeeded to assimilate HPR technologies such as assembly, body, bogie, traction current transforming, traction transformers, traction motors, traction control, brake systems, and train control networks. After having a portion of the HPR network built by globally best-performing players, China developed its domestic version, which was better than the one rolled out in 1994. And China started graduating from replicating or imitating foreign HPR capacity to incrementally advancing. Subsequently, Chinese entities started filling patents on incremental innovation in key areas of HPR. Of course, this approach led to intellectual property infringement allegations with foreign suppliers, particularly with Japanese ones. But through the process, China succeeded to upgrade its domestic capacity from making poorer versions to replicating foreign HPR and incrementally advancing then. Consequently, China reached the state of deploying an advanced HPR network on its own, which claimed to be better than Japan's Shinkansen.

In comparison to per capita GDP, China was far poorer than the current economic status of many less developed countries. For example, Bangladesh's per capita GDP of USD 2688 in 2022 was almost 9 times higher than China's USD 318 per capita GDP in 1990. Despite the given poor economic status, unlike many less developed countries, China did not solely focus on borrowing from external sources and giving contracts to foreign suppliers to build its high-speed rail network and other infrastructure. Instead, China focused on developing the local capacity through learning from the best performers and succeeding in making their HPR better through the local production of knowledge and ideas. Such an approach has enabled China to go ahead of the competition and create a market for their knowledge and ideas in building their own infrastructure and exporting it to other countries. Such an approach has been at the core for empowering China to graduate to an idea economy, growing its per capita GDP five times higher than that of India in 2021;but in the 1980s, both these countries have similar levels of per capita GDP.

In retrospect, China has looked upon HPR as the avenue to assimilate the best-performing foreign technologies and advance them by themselves in creating economic value not only from labour and natural resources but also, more importantly, from a flow of knowledge and ideas. Yes, such a path has been unproven, risky, and long. But it's a far more scalable path than labour and natural resource exploitation to keep creating economic value for advancing the nation to reach the advanced economic status. Unfortunately, unlike China's HPR programme, most less developed countries have been after showing quick results by borrowing and giving contracts to foreign suppliers for developing infrastructure. In addition to accumulating debt, due to such borrowing and importing approaches, less developed countries have been failing to open the path of creating economic value out of the local production of knowledge and ideas, for both domestic consumption and export. Unless less developed countries take lessons from China's HPR and other sources, and change the course, they will likely never find a path of sustained growth to reach high-income status. Instead, they run the risk of being caught in debt and a premature growth trap.

M. Rokonuzzaman, Ph.D is academic and researcher on technology, innovation, and policy. zaman.rokon.bd@gmail.com