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July 31, 2014

Study shows China high speed rail boosts business productivity by 10% and boosts tourism

The World Bank has a 120 page study of the Regional Economic Impact Analysis of High Speed Rail in China.

There is also a 29 page step by step guide.

Recent research carried out by a World Bank team shows that at the current stage of development, transport projects such as high speed rail can trigger significant agglomeration benefits in China. For example, all being equal, halving the economic distance within the coastal region Guangdong was estimated to lead to a 10% rise in average business productivity. Given the current level of data and professional skills base, the report recommends that China broadly follow the UK model to assess the high-speed rail’s impacts on business productivity.

The existing data sources cannot yet support a robust quantification of the impact on jobs. However, as expected in the theoretical models, business operations in the service industries as well as the management and sales departments of other industries have been adapting rapidly to the significantly raised accessibility - in particular, trip frequencies of the existing travelers have increased sharply. Passenger surveys indicate a substantially higher percentage of business-related travelers on high speed rail than on conventional rail (e.g. 17% greater share for Changchun-Jilin and 11% for Beijing-Shanghai) and an overall high proportion of business travelers (e.g. 40% for Changchun-Jilin and 63% for Beijing-Shanghai of all HSR passengers). The report recommends that the evidence base be built up through business interviews using the methodology developed by the study team and tested in the two case study areas.

The tourism survey has shown that the tourism industry has experienced a rapid transformation: the tourist trips have been increasing rapidly at major attraction sites on the lines. On the other hand, improved accessibility by high speed rail enables some tourists to spend fewer nights. More surveys and data collection are required to understand the changes in trip-making, tourist expenditure, and over-night stay patterns.





In terms of the direct value added, the study estimated that during the preceding ten years of operation the Beijing-Kowloon Railway had created about 124.4 billion yuan, accounting for 4.33% of that of the railway transport industry of China and approximately 0.09% of national GDP based on this research. The impacts of railway on the value added of other industries, i.e. ripple effect, are not included in the table.




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