China ditches Maglev project

[Anonymous]

Industry ponders why China canned Maglev project

"BEIJING (AFP) - Shanghai's apparent decision to shelve a planned extension of its high-tech train system left industry insiders puzzled Monday, underlining the dilemma China faces in balancing progress with public concern.

Citing unnamed officials, the official Xinhua news agency said Saturday the 4.3-billion-dollar extension of the magnetic levitation train line, or Maglev, had been suspended amid worries the German technology could pose a radiation risk to communities along the new line."

More at.....

http://news.yahoo.com/s/afp/20070528/wl_asia_afp/chinagermanyrail_070528170818;_ylt=Au5YWXH4Z5LHUdDgzU.W2j.oOrgF

 

[solzrules]

Or could it be they couldn't print enough money fast enough?

[AntonioFP45]

Or could it be that that expenditures on military build up is a top priority?

[Anonymous]

Hmmmm,

Ya'll sure it ain't that maglev has some practical problems in large scale applications?

[Anonymous]

Returned from Beijing ten days ago.  There's a big building boom going on, the 2008 Olympics are on the horizon.  If money is scarce, you couldn't tell it from all the activity.

Maglev seems to me a bit like hovercraft.  If you don't ever need to stop, it's great.

ART

[solzrules]

Actually I have been reading that the Chinese economy is inching its way towards a 'Great Depression' style crash.  The Chinese have been keeping a tight lid on their money (I think they try to keep it artificially low to make their exports cheap).  The next couple o' years could be intersting.  It could be that the higher ups are putting money towards proven technology and good PR, like spraypainting the grass green for the Olympics, for example.

In any event if there is any major deviation in the Chinese money markets get ready for the herd to go running off the cliff. 

[Anonymous]

Actually I have been reading that the Chinese economy is inching its way towards a 'Great Depression' style crash. 

That sound you just heard was the collective panic attack from BNSF headquarters.......

[nanaimo73]

Actually I have been reading that the Chinese economy is inching its way towards a 'Great Depression' style crash. 

That sound you just heard was the collective panic attack from BNSF headquarters.......

With a trillion American dollars in the bank, and 200 billion more coming in each year ? Can't see it.

A crash in the Chinese economy would mean only 3 or 4% growth.

[Modelcar]

 

.....And their economy being so mammoth in size, I'd think it would really make waves all over the World's finanancial status....Including ours.

Why can't we bring to their attention of our large status of probably their largest consumer, hence a major force building their economy....and....do a bit of arm twisting to let more of our export products into their country....

[vsmith]

Could also be that given they are also monkeying with an HST rail system, that after analysing the given costs/benifits, that they finally realized the HST is almost as fast, moves the same amount of people and costs a hellova lot less, using more or less 'off the shelf' technology, just makes better economic sense?

Besides its easier to backengineer an electric locomotive than it is a mag-lev...

[Convicted One]

Besides its easier to backengineer an electric locomotive than it is a mag-lev...

THAT is the explanation on which I'd bet my money.

[solzrules]

Actually I have been reading that the Chinese economy is inching its way towards a 'Great Depression' style crash. 

That sound you just heard was the collective panic attack from BNSF headquarters.......

With a trillion American dollars in the bank, and 200 billion more coming in each year ? Can't see it.

A crash in the Chinese economy would mean only 3 or 4% growth.

The biggest problem with the Chinese economy is that the government doesn't allow the Chinese currency to be priced according to market - they keep it low in order to insure that Chinese exports are cheap.  If the Chinese currency was allowed to 'price itself' so to speak, the result could be a major correction, at the very least.  This has been a big bone of contention that we have had with China for years.  The problem may compound itself if it isn't allowed to fix itself.  This is the basic theory behind a lot of the stuff I have been reading, the details an economist would have to explain (or someone who knows the stuff a little better). 

IF the Chinese economy corrected in the best case scenario or crashed in the worst case scenario then you can bet it will affect us in a big way.  Unlike the Japan mess (remember, we were marveling at their economy at one time too) the Chinese are MAJOR trading partners.  If the exports from China suddenly got expensive you can bet that would affect our economy since China has become a huge component.  Naturally, BNSF and most other rail carriers would also suffer as a result. 

[Anonymous]

Actually I have been reading that the Chinese economy is inching its way towards a 'Great Depression' style crash. 

That sound you just heard was the collective panic attack from BNSF headquarters.......

With a trillion American dollars in the bank, and 200 billion more coming in each year ? Can't see it.

A crash in the Chinese economy would mean only 3 or 4% growth.

Maybe it will cheapen those expensive DCC and SOund equipted engines to 100 dollars apeice or even less.

[cordon]

Actually I have been reading that the Chinese economy is inching its way towards a 'Great Depression' style crash. 

That sound you just heard was the collective panic attack from BNSF headquarters.......

With a trillion American dollars in the bank, and 200 billion more coming in each year ? Can't see it.

A crash in the Chinese economy would mean only 3 or 4% growth.

The biggest problem with the Chinese economy is that the government doesn't allow the Chinese currency to be priced according to market - they keep it low in order to insure that Chinese exports are cheap.  If the Chinese currency was allowed to 'price itself' so to speak, the result could be a major correction, at the very least.  This has been a big bone of contention that we have had with China for years.  The problem may compound itself if it isn't allowed to fix itself.  This is the basic theory behind a lot of the stuff I have been reading, the details an economist would have to explain (or someone who knows the stuff a little better). 

IF the Chinese economy corrected in the best case scenario or crashed in the worst case scenario then you can bet it will affect us in a big way.  Unlike the Japan mess (remember, we were marveling at their economy at one time too) the Chinese are MAJOR trading partners.  If the exports from China suddenly got expensive you can bet that would affect our economy since China has become a huge component.  Naturally, BNSF and most other rail carriers would also suffer as a result. 

Personally, I think the Chinese are doing the right thing with their currency, pegging it to the U.S. dollar.  The costs of their goods will go up soon enough, as they run into resource problems and as their people demand a higher standard of living.

I think currency pricing to market introduces an unnecessary variable into international trade that serves only to make it harder for companies and government to make good decisions on trade. 

I think currency pricing to market introduces, even encourages, currency speculation, which is just another way for some people to take some of your and my money without providing any product or service.

As a counterexample, we don't have any trading between "New York dollars" and, say, "Alabama dollars," and everything runs just fine.

 

[Anonymous]

 

Personally, I think the Chinese are doing the right thing with their currency, pegging it to the U.S. dollar.  The costs of their goods will go up soon enough, as they run into resource problems and as their people demand a higher standard of living.

And what happens to those who actually make the demands?  Clue:  Tiennamen Square.

I think currency pricing to market introduces, even encourages, currency speculation, which is just another way for some people to take some of your and my money without providing any product or service.

Wow!  You've just described Democrat Party controller George Soros to a "T"

As a counterexample, we don't have any trading between "New York dollars" and, say, "Alabama dollars," and everything runs just fine.

Is that anything like carbon trading?

[Tulyar15]

Could also be that given they are also monkeying with an HST rail system, that after analysing the given costs/benifits, that they finally realized the HST is almost as fast, moves the same amount of people and costs a hellova lot less, using more or less 'off the shelf' technology, just makes better economic sense?

Besides its easier to backengineer an electric locomotive than it is a mag-lev...

In a recent issue of "Modern Railways" (a British magazine) , the technical editor, Roger Ford, debunked most of the popular myths surrounding maglev. He showed that it's not likely be economically viable any time soon and anticipated that the Chinese would ditch it for conventional high speed rail. Apparrently there was a bit of a tussle within the Chinese govt. The Technology Ministry wanted to push Maglev, but the Transport Ministry wanted to go for conventional high speed rail. Mr. Ford predicted the Transport Ministry would win in the end.

Talking of China, one of the Open Access operators here, Grand Central, is talking about buying 140mph trains from China. But given it would be a new design, it would take them a while to get approved by Network Rail, the infrastructure owner. Furthermore if they want a diesel train capable of 140 mph, the only engines up to the job are made in Britain or Germany!

[snagletooth]

 i believe Ford, along with Carter and Nixon, on China. I know their hated in this country, but they have ALWAYS been dead on with what's going on there.

[beaulieu]

Personally, I think the Chinese are doing the right thing with their currency, pegging it to the U.S. dollar.  The costs of their goods will go up soon enough, as they run into resource problems and as their people demand a higher standard of living.

I think currency pricing to market introduces an unnecessary variable into international trade that serves only to make it harder for companies and government to make good decisions on trade. 

I think currency pricing to market introduces, even encourages, currency speculation, which is just another way for some people to take some of your and my money without providing any product or service.

As a counterexample, we don't have any trading between "New York dollars" and, say, "Alabama dollars," and everything runs just fine.

 

Cordon, what the Chinese are doing, is effectively waging economic warfare against us. By pegging their currency against ours, they ensure that their cost of production will be lower than ours. Second they do not allow the export of significant amounts of their currency, they don't need to, they have plenty of ours. This depresses the value of the US Dollar, which drives up our cost to purchase anything from anyone other than China. It also drives up our cost of oil and fuels inflation in the US. The only way to counter this inflation is to drive up interest rates, unfortunately since China is our biggest lender this perversely helps the Chinese government even more. The Chinese have studied the way that we won the Cold War against the Soviet Union, and are using a variation of that strategy against us.

[cordon]

Personally, I think the Chinese are doing the right thing with their currency, pegging it to the U.S. dollar.  The costs of their goods will go up soon enough, as they run into resource problems and as their people demand a higher standard of living.

I think currency pricing to market introduces an unnecessary variable into international trade that serves only to make it harder for companies and government to make good decisions on trade. 

I think currency pricing to market introduces, even encourages, currency speculation, which is just another way for some people to take some of your and my money without providing any product or service.

As a counterexample, we don't have any trading between "New York dollars" and, say, "Alabama dollars," and everything runs just fine.

 

Cordon, what the Chinese are doing, is effectively waging economic warfare against us. By pegging their currency against ours, they ensure that their cost of production will be lower than ours. Second they do not allow the export of significant amounts of their currency, they don't need to, they have plenty of ours. This depresses the value of the US Dollar, which drives up our cost to purchase anything from anyone other than China. It also drives up our cost of oil and fuels inflation in the US. The only way to counter this inflation is to drive up interest rates, unfortunately since China is our biggest lender this perversely helps the Chinese government even more. The Chinese have studied the way that we won the Cold War against the Soviet Union, and are using a variation of that strategy against us.

Thanks for the feedback.

My point was more about fixed exchange rates than China itself.  I believe that's the correct course, not only for China and the U.S., but overall.  I believe market exchange rates lead to currency speculation, and I believe that currency speculation is good only for the speculators and brokers and bad for everyone else.  Every dollar or peso or Euro that goes to a broker or speculator comes in the end from you and me.  They are profit-takers with no product.

On China, however, I believe China has seen the light of world trade and decided to participate.  They have carefully permitted several capitalistic principles in their country and seen huge advances in quality of life and world respect as a result.  Mary Kay, McDonalds, Ford, and other American companies are going to China to both help and earn money.  I don't think it's warfare at all; they just want to catch up after 50 years of Communist failures.

Because the Chinese own so many dollars, it would not make sense for them to encourage devaluation of the dollar.

The real problem is that we need to produce more stuff that the Chinese want.  If we don't, they will come here with their dollars and buy up our properties.  Railroads (that puts it on topic, I hope), hotels, banks, mortgages, factories, entertainment, you name it.  I believe the dollars have to come back here eventually.  We need to produce more here, better and more efficiently, and stop the insane practice of giving up, closing down, and ceding business to foreigners.  Here in Texas the state came perilously close to selling a major highway to a Spanish company to operate as a toll road!  I think the legislature shut it off, but it may not be over yet.

 

 

[Anonymous]

  

The real problem is that we need to produce more stuff that the Chinese want.  If we don't, they will come here with their dollars and buy up our properties.  Railroads (that puts it on topic, I hope).....

It's my understanding that the Chinese may already have significant indirect stake in BNSF, and the fact that BNSF (1) cross-subsidizes Chinese imports on the backs of domestic rail shippers, and (2) went balls to the walls to get the LA-Chicago transcon double tracked while nickel and diming the primary domestic shipping routes, such would seem to bear out this perception of de facto Chinese control over BNSF's corporate decisions.

[beaulieu]

  

The real problem is that we need to produce more stuff that the Chinese want.  If we don't, they will come here with their dollars and buy up our properties.  Railroads (that puts it on topic, I hope).....

It's my understanding that the Chinese may already have significant indirect stake in BNSF, and the fact that BNSF (1) cross-subsidizes Chinese imports on the backs of domestic rail shippers, and (2) went balls to the walls to get the LA-Chicago transcon double tracked while nickel and diming the primary domestic shipping routes, such would seem to bear out this perception of de facto Chinese control over BNSF's corporate decisions.

Do you believe that if you keep saying that long enough, more than a handful of people will believe you? BTW a majority of the Domestic traffic out of California is just resorted and repackage import goods, except for agricultural products. 

[CSSHEGEWISCH]

  

The real problem is that we need to produce more stuff that the Chinese want.  If we don't, they will come here with their dollars and buy up our properties.  Railroads (that puts it on topic, I hope).....

It's my understanding that the Chinese may already have significant indirect stake in BNSF, and the fact that BNSF (1) cross-subsidizes Chinese imports on the backs of domestic rail shippers, and (2) went balls to the walls to get the LA-Chicago transcon double tracked while nickel and diming the primary domestic shipping routes, such would seem to bear out this perception of de facto Chinese control over BNSF's corporate decisions.

Proof please, at least of a nature that would satisfy gabe and the other attorneys on this forum.

[Anonymous]

  

The real problem is that we need to produce more stuff that the Chinese want.  If we don't, they will come here with their dollars and buy up our properties.  Railroads (that puts it on topic, I hope).....

It's my understanding that the Chinese may already have significant indirect stake in BNSF, and the fact that BNSF (1) cross-subsidizes Chinese imports on the backs of domestic rail shippers, and (2) went balls to the walls to get the LA-Chicago transcon double tracked while nickel and diming the primary domestic shipping routes, such would seem to bear out this perception of de facto Chinese control over BNSF's corporate decisions.

Proof please, at least of a nature that would satisfy gabe and the other attorneys on this forum.

You mean proof of the perception?  It's all right there in #1 and #2.  BNSF's own financial statements show that import intermodal only brings in half the revenue per carload compared to everything else, including domestic intermodal.  And BNSF has done nothing but trumpet it's desire to double track the entire LA-Chicago transcon, despite the fact that the real high margin stuff like grain and coal is moving over the northern transcon and the midwest core, which is still bottlenecked to the hilt.

We've discussed this ad nauseum, and there's no contradiction being provided by you and other BNSF defenders.  One can only conclude that a US corporation that irrationally favors low margin importers over high margin domestic shippers is being controlled by the low margin shippers.

[nanaimo73]

 You mean proof of the perception?  It's all right there in #1 and #2.  BNSF's own financial statements show that import intermodal only brings in half the revenue per carload compared to everything else, including domestic intermodal.  And BNSF has done nothing but trumpet it's desire to double track the entire LA-Chicago transcon, despite the fact that the real high margin stuff like grain and coal is moving over the northern transcon and the midwest core, which is still bottlenecked to the hilt.

Dave, are you saying BNSF spent more on increasing capacity on the Transcon than on the PRB during 2005 and 2006 ?

Does anyone have those numbers at hand ? 

[CSSHEGEWISCH]

To FM:  I'm asking you to provide concrete proof that Chinese investors (of any type) have a controlling interest in BNSF.

[beaulieu]

You mean proof of the perception?  It's all right there in #1 and #2.  BNSF's own financial statements show that import intermodal only brings in half the revenue per carload compared to everything else, including domestic intermodal.  And BNSF has done nothing but trumpet it's desire to double track the entire LA-Chicago transcon, despite the fact that the real high margin stuff like grain and coal is moving over the northern transcon and the midwest core, which is still bottlenecked to the hilt.

There's your problem FM, you have trouble reading, the 2006 Financial Statement clearly states that Intermodal is per unit not per carload, since a doublestack car can handle at least 2 units, the revenue is at least twice per car, unless BNSF can't load both positions. BNSF revenues for International Intermodal was approx  $2,582million last year which is more than Agricultural Products, and not a lot less than Coal.

We've discussed this ad nauseum, and there's no contradiction being provided by you and other BNSF defenders.  One can only conclude that a US corporation that irrationally favors low margin importers over high margin domestic shippers is being controlled by the low margin shippers.

[Anonymous]

You mean proof of the perception?  It's all right there in #1 and #2.  BNSF's own financial statements show that import intermodal only brings in half the revenue per carload compared to everything else, including domestic intermodal.  And BNSF has done nothing but trumpet it's desire to double track the entire LA-Chicago transcon, despite the fact that the real high margin stuff like grain and coal is moving over the northern transcon and the midwest core, which is still bottlenecked to the hilt.

There's your problem FM, you have trouble reading, the 2006 Financial Statement clearly states that Intermodal is per unit not per carload, since a doublestack car can handle at least 2 units, the revenue is at least twice per car, unless BNSF can't load both positions. BNSF revenues for International Intermodal was approx  $2,582million last year which is more than Agricultural Products, and not a lot less than Coal.

Well John, I'm suprised you've made a bit of an error in defining "unit".  There is a difference between a unit and a platform, and for a single well car the proper definition is 1 unit and 2 platforms - a bottom platform and a top platform.  Therefore, if BNSF's FS for intermodal lists revenues per unit, that would include both platforms (aka, two containers) as one unit.

The revenues for import intermodal is the volume number, not the revenue per unit number which is more descriptive of rate comparisons.  For example, you'll see the revenues per import intermodal unit is half that for domestic intermodal per unit.

Also, the R/VC ratios (from a few years ago - the STB no longer requires that information to be made public, for obvious reasons) clearly show the bulk of import intermodal in the low range, aka <180%, while domestic traffic has a healthy share sitting above that 180% threshhold.  If that isn't cross-subsidization......

Again, old news, been hashed and rehashed ad nauseum.

What I would question is why you and Paul would even be upset by the prospect of significant foriegn control over US railroads.  You're previous posts in this thread seem amicable to the idea that China is exerting some negative influence over US economic interests.  Why would the idea of non-US influence over US railroads either shock you or offend you?

[Anonymous]

To FM:  I'm asking you to provide concrete proof that Chinese investors (of any type) have a controlling interest in BNSF.

Paul, I made it perfectly clear in my previous post that the "proof" is circumstantial, based on the perceptions provided by BNSF's own financial statements and infrastructure investment expenditures.  What I would ask you is why you would think BNSF doesn't give favorable treatment to it's Asian importers - import intermodal revenues per unit are half the domestic intermodal revenues per unit - so what does that tell you?

Also, take a look at the R/VC ratio's, and show me evidence that an equal percentage of import traffic is charged at the so-called "captive rate" as is charged for domestic traffic.  Or, I can just save you the time and tell you flat out - no ocean import traffic is subjected to the captive rates.

[cordon]

I'm not going to try to verify this statement, "Import intermodal revenues per unit are half the domestic intermodal revenues per unit."  Assuming it is true and there is no logical explanation that I can interpret as "fair and reasonable," I take great offense at the practice.

Similarly, before I retired I traveled frequently between Washington, DC, and Syracuse, NY.  The government rate fare for round trip air was about $600, while the roundtrip fare for Washington, DC, to Los Angeles was about $375.  The Syracuse flights were usually nearly full.  There is no way that can be fair and reasonable.  I took great offense at that kind of pricing, again assuming no logical explanation.

If the RR unfair (unfair IMHO) pricing comes from Chinese (government or industry) ownership of the RR, then I take great offense again.

This is why in my previous post I mentioned that Chinese will buy our properties with the dollars we give them if we don't offer them products/services that they want to buy.  To me, that is a very negative outcome of letting our industry deteriorate.  I'm OK with selling them products/services; I'm not OK with selling them pieces of the U. S. A.

 

 

[beaulieu]

Well John, I'm suprised you've made a bit of an error in defining "unit".  There is a difference between a unit and a platform, and for a single well car the proper definition is 1 unit and 2 platforms - a bottom platform and a top platform.  Therefore, if BNSF's FS for intermodal lists revenues per unit, that would include both platforms (aka, two containers) as one unit.

So your saying that a well with only one box in it is 1/2 a unit? or is it one unit at only half the revenue. What about a well with 2 20 ft. in the bottom and a 40 ft on top, Still just one unit? How would you figure cost/price if one was empty? Big revenue difference. Also what you are in effect saying is that there is no difference between a unit and a car. The other interesting thing is that Consumer Products is nearly equal to coal in revenues per car/unit in 2006.

 

The revenues for import intermodal is the volume number, not the revenue per unit number which is more descriptive of rate comparisons.  For example, you'll see the revenues per import intermodal unit is half that for domestic intermodal per unit.

BNSF 2006 Annual Report gives the total revenues for the category Consumer Products as $5,613 million, this is on page 18. On page 19 it lists the split as 46 percent of the total revenue for International Intermodal and 46 percent for Domestic Intermodal, the balance is Automotive. Please cite the report where you find the different per unit rates. 

Also, the R/VC ratios (from a few years ago - the STB no longer requires that information to be made public, for obvious reasons) clearly show the bulk of import intermodal in the low range, aka <180%, while domestic traffic has a healthy share sitting above that 180% threshhold.  If that isn't cross-subsidization......

Again, old news, been hashed and rehashed ad nauseum.

What I would question is why you and Paul would even be upset by the prospect of significant foriegn control over US railroads.  You're previous posts in this thread seem amicable to the idea that China is exerting some negative influence over US economic interests.  Why would the idea of non-US influence over US railroads either shock you or offend you?

Actually, it doesn't bother me at all. Does it bother you? I just wish they would invest some of their cash in the railroad.