China opened the world’s longest high-speed rail line between Beijing and Guangzhou last month. The country’s high-speed railway network is expected to reach 18,000km by 2015. China Daily / Reuters
China opened the world’s longest high-speed rail line between Beijing and Guangzhou last month. The country’s high-speed railway network is expected to reach 18,000km by 2015. China Daily / Reuters

High-speed trains on track in China



The silver engines gleam at their platforms, their sleek noses pointed towards their destinations. Inside they are well maintained, comfortable and a genuine alternative to flying between China's main cities. The ticket price is about the same in many cases.

The opening last month of the rail line between the capital, Beijing, and the southern commercial hub of Guangzhou means passengers can now cover the 2,298-kilometre route in just eight hours, a trip that used to take 22 hours.

The route includes the major cities Shijiazhuang, Wuhan and Changsha. The ministry of railways said more than 150 pairs of high-speed trains, one going in each direction, are running the new line daily.

Even though the high-speed rail network was established only in 2007, China now has the biggest in the world, with 9,356km of high-speed railways. Today, more people in China are travelling by high-speed rail than are flying.

This is set to continue as China sticks to its plans to increase urbanisation. In 2011, the number of Chinese living in cities passed 50 per cent, and by 2020, the government aims to have this figure at 60 per cent.

High-speed rail is increasingly regarded as the future of intercity travel in China, and the country's high-speed railway network will reach 18,000km by 2015, Sheng Guangzu, minister of railways, said during a recent rail conference.

That means more than 8,000km of high-speed railways will be put into service in three years.

The plan is to expand this to 50,000km by 2020, with four main lines running north and south and another four east and west.

The Guangzhou to Beijing high-speed train opened just in time for the world's greatest annual migration, the movement of hundreds of millions of people from the cities to their ancestral hometowns to mark China's Lunar New Year holiday period, which starts this year on February 9. The Chinese take two billion trips at this time of year, and already there is pressure on the ticketing system, although few migrant workers will be taking the high-speed rail home to see their families.

They tend to take the slow trains, and often stand the whole route. It is the emerging middle class and wealthy who take the high-speed train. Even though the Guangzhou to Beijing journey takes eight hours, versus about three hours flying, many travellers like that there are fewer interruptions, the view is pretty, you can walk around and it is easier to work from even if internet access seems a bit patchy and not all the seats have power points.

The reputation of the high-speed rail network seems to have largely recovered from the collision in Wenzhou in July 2011 that killed 40 people. The accident was China's worst rail disaster since 2008 and caused widespread public criticism, focused on the government, saying the rail authorities were rushing to expand the network without taking public safety into account.

The Beijing to Shanghai route covers 1,318km and runs 90 pairs of trains daily, with the trip taking four hours and 48 minutes, making one stop in Nanjing. It travels at a maximum speed of 300kph, down from the original average speed of 329kph, as the trains were made to go slower following the Wenzhou crash.

Investment in the high-speed rail network was a big part of China's infrastructure spending programme in 2008-09, when Beijing implemented a four trillion yuan (Dh2.36tn) stimulus to fight the financial crisis.

The rail ministry plans to invest 650 billion yuan in railway infrastructure, aiming to have 5,200km of new railways opened this year.

Wang Hui, the deputy dean of the school of economics and management at the Shijiazhuang Tiedao University in Hebei, told the China Daily about some of the opportunities the new train would bring.

"The Beijing-Guangzhou high-speed railway connects the economic region around Beijing with the Pearl River Delta," said Mr Wang. "Considering the population and levels of development of the two economic zones, they are undoubtedly important engines for China's economy. Therefore improving the transport system will definitely increase exchanges between the two in terms of investment, talent and information."

While the high-speed rail network will bring the usual direct economic benefits, such as time savings for travellers, cost savings for operators and reductions in air pollution and noise, the World Bank has urged China to also look at the wider economic benefits.

Look at the case of Zhengzhou on the Beijing to Guangzhou line. In the past, in a three-hour conventional train journey on this line, about three million people from Anyang, Xinxiang and Handan can reach Zhengzhou. Today, with the opening of the new high-speed line, this number will surge to 28 million people from eight cities, said Gerald Ollivier, the World Bank's senior transport specialist.

"These cities will start to work more closely together as a return trip within a day will be within reach. The impact in terms of economic exchanges, accessibility and productivity gains expected to be significant, and extend beyond traditional transport savings.

"The scale and scope of the Chinese high-speed rail programme offer a unique opportunity to try to measure such impacts," said Mr Ollivier.

According to a report released late last year, four of the country's high-speed rail lines achieved break-even financial status since the bullet trains started full-speed intercity service, with ticket revenues matching costs, including debt payments, on several routes.

However, some customers continue to complain that the price is too high. The top price for a ticket from Beijing to Guangzhou is more than 2,000 yuan.

The high-speed rail is central to China's efforts to become more than just a low-cost manufacturer, and China has been building high-speed rail networks in foreign countries such as Turkey and Venezuela, and has ambitions farther afield.

During the construction of the rail network, China relied on technology from a number of foreign companies, including France's Alstom, Germany's Siemens and Japan's Kawasaki Heavy Industries, which constructed the Shinkansen, Japan's bullet train.

Cao Jianlin, China's vice minister of science and technology, said he did not think intellectual property rights issues would have any impact on China's efforts to further develop its own high-speed system, and he described as "nonsense" copycat claims by Kawasaki Heavy Industries.

Mr Cao said it had taken years of innovation to come up with the technology, and he encouraged Chinese companies to file for patents overseas.

He said the high-speed rail industry "will further research patent strategy and the global [intellectual property rights] situation to better understand the laws and policies of countries they export to".

With construction of the network intensifying, the government is considering a national fund to encourage private capital to invest in China's high-speed railway development and to help ease the increasing financial burden stemming from construction.

Wang Mengshu, a member of the Chinese Academy of Engineering, a national body, figures about 600bn yuan is needed every year for the next three years to support the extension of the network.

"Considering the huge debt burden, the financial pressure weighing on the ministry will be very heavy," said Mr Wang.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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In numbers: PKK’s money network in Europe

Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010

Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille

Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm

Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year

Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”

Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners

TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013 

COMPANY PROFILE
Name: Kumulus Water
 
Started: 2021
 
Founders: Iheb Triki and Mohamed Ali Abid
 
Based: Tunisia 
 
Sector: Water technology 
 
Number of staff: 22 
 
Investment raised: $4 million 
Skewed figures

In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458. 

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MATCH INFO

Uefa Champions League, semi-final result:

Liverpool 4-0 Barcelona

Liverpool win 4-3 on aggregate

Champions Legaue final: June 1, Madrid

AUSTRALIA SQUAD

Aaron Finch, Matt Renshaw, Brendan Doggett, Michael Neser, Usman Khawaja, Shaun Marsh, Mitchell Marsh, Tim Paine (captain), Travis Head, Marnus Labuschagne, Nathan Lyon, Jon Holland, Ashton Agar, Mitchell Starc, Peter Siddle

Zidane's managerial achievements

La Liga: 2016/17
Spanish Super Cup: 2017
Uefa Champions League: 2015/16, 2016/17, 2017/18
Uefa Super Cup: 2016, 2017
Fifa Club World Cup: 2016, 2017

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Company Fact Box

Company name/date started: Abwaab Technologies / September 2019

Founders: Hamdi Tabbaa, co-founder and CEO. Hussein Alsarabi, co-founder and CTO

Based: Amman, Jordan

Sector: Education Technology

Size (employees/revenue): Total team size: 65. Full-time employees: 25. Revenue undisclosed

Stage: early-stage startup 

Investors: Adam Tech Ventures, Endure Capital, Equitrust, the World Bank-backed Innovative Startups SMEs Fund, a London investment fund, a number of former and current executives from Uber and Netflix, among others.

MATCH INFO

Champions League quarter-final, first leg

Tottenham Hotspur v Manchester City, Tuesday, 11pm (UAE)

Matches can be watched on BeIN Sports

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Engine: Dual-motor all-wheel-drive electric

Range: Up to 610km

Power: 905hp

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Director: Magizh Thirumeni

Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra

Rating: 4/5

 

Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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