Market-creating states: rethinking China’s high-speed rail development

Abstract

Railway development holds special importance in every major industrialized country. Despite its significance, the wholesale modernization of China’s railway sector only began after the mid-2000s. Against this backdrop, this paper poses three research questions: First, why did China’s high-speed railway (HSR) revolution start in the mid-2000s? Second, which domestic and international factors most decisively shaped the rapid development of China’s HSR industry? Third, can other states replicate the Chinese model? This paper advances the perspective of ‘market-creating states’. Through administrative centralization, the Chinese state created a national HSR market in which state-owned firms and sub- national governments collaborated with the central government to pursue rapid development. In doing so, the Chinese state successfully leapfrogged into the age of HSR, fostered indigenous innovation, and escaped dependency. High-speed rail development serves as a fruitful starting point for understanding the role of a ‘market-creating state’ in managing development in a globalized economy.

Keywords:

• States and markets
• developmental state
• dependent development
• high-speed railway

Disclosure statement

No potential conflict of interest was reported by the author.

Acknowledgement

An earlier version of the paper was presented at the RIPE 30^th Anniversary Special Feature Workshop: Looking Back and Looking Forward in IPE, as well as at Zhejiang University’s Department of Sociology’s Qunxue Yiyan Young Scholars’ Forum. I am grateful for the comments and suggestions from participants at both workshops. Special thanks to Saori Katada, Xiao Ma, Hanzhi Yu, Tianbiao Zhu, and the two anonymous reviewers for their insightful comments and suggestions. All errors are my own.

Conflicts of Interest

None

Notes

1 They argue that successful policy implementation vests upon three important factors: inputs from affected parties, overcoming joint action problems and strong state capacity.

2 With administrative re-centralization, the MOR regained the capacity to make investment decisions in rolling stock equipment and railroad development.

3 Post-GFC fixed asset investments stayed above the 600 billion CNY threshold with the exception of 2011, when two high-speed trains crashed and caused a major backlash across the country.

4 The eventual name of the national brand that Huang and Zeng had emphasized was China Railway High-Speed (hexie hao).

Additional information

Notes on contributors

Karl Yan

Karl Yan is an assistant professor of public policy in the School of Humanities and Social Science at the Chinese University of Hong Kong, Shenzhen. Yan’s research sits at the intersection of international and comparative political economy with a particular focus on railway development and the transformation of China.