China railway entered a new stage of development

The newly founded China Railway Corporation should pay more attention to improving its level of service and seeking more added value from good service and efficient management, says an article in 21st Century Business Herald. Excerpts:

The overall property of the former Ministry of Railway was 4.3 trillion yuan ($683 billion) by the third quarter of last year and its debt was 2.66 trillion yuan. The real liability may hit 3 trillion yuan now given its new investment this year.

Yet, it is estimated the real property of MOR is about 20 trillion yuan. The return on investment for the MOR is quite low.

It is understandable that CRC intends to increase railway ticket prices. But the room for increases is quite limited, as high prices may make more travelers turn to highways or airplanes.

The property of CRC is, by its nature, a State-owned asset. Ticket pricing will take this point into consideration.

CRC should gradually stop increasing debts to build railways, which was common in the MOR era. By decreasing its borrowing it will begin the process of absorbing its historical debts.

CRC has the largest market in its field in the world, and is one of the largest railway networks in the world.

It should seek more added value from good service and cooperation with the other partners to make a thorough use of its assets. The low efficiency of the former MOR must be reformed to allow a more flexible use of its huge properties.