China Railway will raise ticket prices on four high-speed train routes by between 20-40 percent on June 15, even though their service routes are already profitable.
According to “Sina Finance”, China Railway Group’s 2023 financial data shows that the company’s net profit has changed from negative to positive, reaching RMB 3,304 or around IDR 7.35 trillion, and its operating performance is the best in history.
The announcement regarding the price increase issued on May 2 cited “operational costs such as track maintenance, vehicle purchases, equipment renewal and labor” as the reason for the ticket price increase.
The company also said the affected routes included the Wuguang section of the Beijing-Guangzhou high-speed train, and the Hangzhou-Changchun section of the Shanghai-Kunming line.
Some analysts believe that this price increase is caused by a lack of money in the central and local governments, as the real estate sector that drives China’s economy weakens.
Wang Kuo-Chen, a research assistant at the Chung-Hua Economic Research Institute in Taipei, told VOA that the impressive performance recorded last year was only “profit after deducting operating costs” and did not take into account debt caused by construction investments.
He said the increase in ticket prices could only cover general income, but would not help cover the deficit in fixed asset investment. Fixed assets must be filled by real estate. Unfortunately, China’s housing market is slow and cannot be used to support high-speed trains.
“Xi Jinping has ordered non-essential bullet train routes to be stopped. If the high-speed train is not completed, won’t house prices fall further? “This will become a vicious circle,” Wang said.
Chinese media “The Paper” reported on July 20, 2023, that due to heavy losses in the railway sector, more than 20 high-speed train stations in a number of locations have been completed but are not yet in use or have been decommissioned.
This price increase was criticized on social media platforms such as Douyin and Weibo. One netizen wrote “Prosperity has no impact on me, but I have to share the suffering.“
