Don't know if this is true or not, but I heard through various grapevines over the past few years a lot of Chinese railroad men weren't too enthusiastic about dropping steam and going diesel or electric, with some exceptions.
"Steam's too labor intensive? So what? We've got LOTS of labor! Oil for diesels we've got to import, coal we've got lots of! We can fix steamers with a good machine shop and decent hand tools! How are you gonna do that with diesels and electrics way out in the boondocks?"
In Chinese, of course.
Is it true? I don't know, but if it ain't, it ought to be!
David Wardale weighed in on that in his book "The Red Devil and Other Tales From the Age of Steam." He spent an interval of some years in China working on an improved QJ class steam locomotive, a project that never came to fruition on account of factors discussed in the book.
The reasoning behind hiring him, a Westerner at considerable money (originally from England, worked on the Red Devil locomotive project in South Africa), was everything you say. Oil is an expensive import, coal is abundant and domestically produced (although Wardale said it was very crumbly, almost only dust, which is hard to fire effectively on a steam locomotive grate), and workers willing to work for low wages were numerous.
Modern China is prospering with their export-driven economy that I think they can buy oil or afford to electrify key lines, but Wardale was speaking of the 1980s when the conditions you speak of were closer to being met. But even in the 1980s, Wardale reported that it was the Energy Ministry pushing steam on the argument of expensive imported oil vs cheap domestic coal along with enough labor to have two firemen, taking turns between stoking and watching critical gauges and signals, on an engine crew. It was the railroad people, and especially engine crews subject to baking heat in summer and intense Northern China cold in winter in drafty steam engine cabs, who wanted Diesels or electrics.
Wardale attributed the collapse of the project to the economic transition from a central command economy to the newer economic system in China based on commercial enterprises making their own decisions. The Energy Ministry still wanted this but they lost the central planning authority to make the railroad keep steam locomotives going.
Wardale points to things the railroad in China was doing right with their steam. Their coal was awful from the standpoint of a locomotive fuel, but their crews somehow knew how to fire with it and maintain a clean stack. The QJ had a powered stoker, but the crews were paid coal-saving bonuses and did a lot of hand firing. Some crews wet that coal down to almost a coal-water slurry and then shoveled glops of it onto the grate, where owing to a low ash-fusion temperature, it was held together with slag that it didn't all get drafted off the grate and up the stack. The long delay on their butterfly fire doors was timed just right to supply enough excess air to prevent smoke, where the most smoke is typically generated when you are stoking. Somehow this setup worked without choking the fire with clinker -- solidfied slag.
Wardale was under contract to implement the Gas Producer Combustion System (GPCS) initially developed by Livio Dante Porta in Argentina and implemented on two locomotives in South Africa by Wardale. Wardale explains that he (or the crews following his instructions through a language interpreter) could never quite get the GPCS to work with Chinese coal. He explained that the GPCS required a thick firebed plus steam feed to the coal bed to suppress clinker formation, and with the fire that thick, you could never use the Chinese trick of allowing the fire to form molten slag to get the powdery coal to stick together -- the GPCS would form a clinkered mess. This technique that the Chinese crews came up with to get their bonuses has a name when it is engineered into stationary boilers -- "wet bottom" or "slag tap" combustion.
The QJ, based on the best Russian practices which in turn built upon American designs, had a lot going for it. The 2-10-2 wheel arrangment had considerably more adhesive weight than the 4-8-4 Wardale worked with in South Africa, and owing to an enormous superheater derived from Russian practices, it had really good thermal efficiency (a peak of over 8 percent was claimed) if not realized in operations owing mechanical limitations and inadequate crew training. Owing to inadequate bearings for the power and tractive effort it could produce, the crews operated it with inefficient long cutoffs and part throttle owing to the rod knock it would exhibit with short cutoffs and wide-open throttle. The locomotive was unstable at any speed, exhibiting severe "hunting" and the worst cab ride Wardale ever experienced, although this didn't bother crews who acquired their "sea legs" as much as the drafty baking-in-summer, freezing-in-winter working conditions.
Wardale blames not abandoning the GPCS on the Chinese officials who were dead set on it. The push for roller bearing axles and rods to solve the knock problem and related mechanical deficiencies of the type, however, was from Wardale and a point of contention with the Chinese, although Wardale's line was "how are you going to meet your thermal efficiency targets if the crews cannot employ full throttle and short cutoffs?"
Not only were these imported SKF roller bearings, they were special designs to meet the tight spaces in the QJ type, which kind of went against the concept of steam being low-tech and buildable and maintainable domestically. The Chinese also accused Wardale of corruption with respect to the Swedish firm SKF as a supplier, with Wardale satisfying his British appetite for sweets not available in China with a box of chocolates given to him by the SKF sales rep.
My chair-borne analysis of the Modified QJ fiasco is that Wardale should have not pushed the roller bearings so hard and looked for ways to improve the locomotive mechanically in other ways. He did propose, however, to attempt to treat the rough riding by putting more spring resistance in the lateral motion of the 2-wheel pilot truck, and maybe something short of roller bearings could have beefed up the bearings? The Chinese should have given up on the GPCS and worked more cooperatively with Wardale on a way to burn their domestic coal effectively, because what they were doing was a pretty good start, although Wardale complains that the peak power goals would have required a stoking rate that could not be shoveled by hand.
Maybe the Improved QJ was too ambitious and a more modest increase in power and thermal efficiency would have helped keep steam around? Wardale was of the opinion, however, that the "fix was in" to at least in mainline operations apart from mines and branchlines, steam was on the way out in the way that railroads all around the world resolved to replace it with Diesels and electrics.
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?