Chinese Railway Reform and Competition: Vertical or Horizontal Restructuring?

Russell Pittman

Development and Comp Systems from University Library of Munich, Germany

Abstract: One of the key determinants of China's ability to continue its economic growth into the 21stcentury and to distribute the benefits of that growth to a broad spectrum of the population will be the further development of its railroad system. This paper examines the possibilities for improving the performance and increasing the capacity of China's railroad system through the introduction of competition. Countries throughout the world are in the process of abandoning the centralized, monopoly, state-owned model of the railway in favor of models that create competition. However, different competitive models have been proposed and are being tried out. This paper discusses the reform experience with the two basic models and their variations, focusing especially on some of the operational and regulatory challenges that vertical separation is now better understood to impose. It seeks to apply the lessons of the experience to date to the situation of China, where -- unlike in many countries, developing and developed -- one important criteria for choosing a reform model is its ability to provide the incentives for appropriate levels of new investment to be undertaken at the appropriate locations. The paper closes with the presentation of one possible reform model for the Chinese rail system, a model that maintains vertical integration while creating competition for shippers at many important origin and destination points.

Keywords: China; railroad; infrastructure; reform; competition (search for similar items in EconPapers)
JEL-codes: L43 L92 O14 R48 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2002-04-24
New Economics Papers: this item is included in nep-sea
Note: Type of Document - ; prepared on PC; pages: 26 ; figures: 4 maps included at end of paper
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpdc:0204004

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