Wednesday, January 19, 2011

The Extent of the China HSR Equation in California

What Matier and Ross describe in the San Francisco Chronicle, below, is the kind of politics I have come to expect in California.

It's the kind of politics that constitutes the background for the CHSRA and it's founders.  Conflicts of interest abound among CHSRA Board members.  Pringle, re-appointed as Chairman of the Board, has been accused of personal profiting through one of the consulting/contracting companies with which he is affiliated.  Several bills are now in the state legislature pipeline that seek to eliminate such conflicts of interest.  Good luck with that. 

Assemblywoman Fiona Ma has been a highly visible promoter of HSR in California and the inferences described below come as no surprise.

Richard Trainor's writings, articles and book discuss in great detail the deal-making and back-room politics that has permeated California for decades, including the high-speed rail project.

It should be a basic assumption that what we are told in public about the political processes regarding this rail project in California are in the spirit of what the Wizard of Oz said in the Emerald City, "Pay no attention to the man behind the screen."

A number of my colleagues, for whom I have enormous respect, disagree with me about the importance of what I call the China threat.  Having just listened to President Hu Jintao's statement in the two-President press conference this morning, I believe that China does have intentions of pro-active closer 'cooperation' with the US in such areas as infrastructure.  It is certainly possible that they may offer to build and equip California's HSR project, perhaps as a loss-leader, foot-in-the-door proposition.  Despite the reluctance of the Republicans to support Obama's HSR Vision, this deal may find support among both state and national Democrats eager for HSR to be developed. Such a contractual relationship may find considerable support among state and national politicians since it's borrowed, OPM, other peoples' money.

Since we're on the subject of China we learn that they intend to build more highway miles in China than we have with our Interstate Highway System here in the US.

You may be interested to understand China's infrastructure ambitions which involve a great deal more than high-speed, or even regular rail.   The US and China's land mass are each about 3.7 million sq. miles. However, for each person in the US, there are four people in China.  OK, fifth graders, which country has the higher population density?  As we've said previously, China is now in the throes of its Industrial Revolution, and expanding all its infrastructure, including transportation, is paramount.

What's the lesson for us?  Those HSR promoters who persist in saying that if we don't build HSR in California, we will have to build lots more freeways and airport runways (which they say will be even more expensive) don't know what they are talking about (to put it kindly).  We will have to build highways and air travel capacity as our demands increase, regardless of whether we build HSR or not. It's not a zero sum game.

The Chinese, with all their HSR capacity, still suffer traffic gridlock, require thousands of miles more of highway capacity, have huge air pollution problems, and are becoming a much bigger car market than the US.  So, let's hear no more of that fallacious either/or argument from the California rail authority or their acolytes.
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MATIER AND ROSS, SF Chron. Jan. 19, 2011

China connection: Even before Chinese President Hu Jintao landed in Washington for a visit with President Obama, a Chinese delegation toured the Central Valley over the weekend with an eye toward competing to develop the state's high-speed rail line.

Representatives from China's Ministry of Railways and China Railway Construction Corp. visited Fresno with Assemblywoman Fiona Ma, D-San Francisco, one of the $43 billion project's strongest advocates in the Legislature.

Also in the group was Jeffrey Chang, a San Francisco lawyer working for Prometheus Investment Group, which is hoping to partner up with the Chinese on the high-speed rail deal.

The company's co-founder is Alexis Wong, a San Francisco housing developer who spends most of her time these days in Hong Kong and Beijing.

Wong also happens to be a longtime supporter and close friend of Ma.

Ma insists she isn't playing favorites in the rail competition, and expects at least four teams - representing France, Germany, Japan and China - to be in the running when the bid process gets going in earnest later this year.

"I am not involved in any way with the High-Speed Rail Authority's contracting proposals," Ma said. "I'm just like a PR spokesperson to keep high-speed rail on track."

Her push for the rail line is one reason Ma will be in Washington today at a State Department luncheon for China's president, hosted by Secretary of State Hillary Rodham Clinton and Vice President Joe Biden.

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California News

China takes interest in Calif. speed rail

Sunday, January 16, 2011


FRESNO, Calif. (KABC) -- The Chinese are taking a serious interest in California's high-speed rail system.

A dozen officials from China on Saturday took a helicopter tour of what will be the first phase of the $45 billion project.

It will link Los Angeles to San Francisco through Fresno.

The Chinese reportedly want to build the trains, the tracks and possibly a manufacturing facility in Fresno.
A transportation investment group based in Beijing says China would bring money and expertise.

"(China) built more high-speed rail in the last 10 years than the entire world put together, so they do have the experience, they do have the expertise, they have the most modern technology," said Jeffrey Chang of Beijing.

China hasn't committed to investing yet.

Potential investors from other countries are set to visit Fresno over the next months.
Japan, Germany and France are all reportedly interested in the project.

(Copyright ©2011 KABC-TV/DT. All Rights Reserved.)

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http://www.canadianbusiness.com/markets/market_news/article.jsp?content=D9KRJOMO0

General Electric to sign 5 deals with China worth an estimated $2 billion in revenue

FAIRFIELD, Conn. (AP) - General Electric Co. has lined up five deals in China that will generate $2 billion in revenue, the company said Wednesday.

The agreements were part of a larger announcement in which the White House, seeking to build ties with an economic rival, said that China would purchase $45 billion in U.S. exports, including a highly sought-after $19 billion deal for 200 Boeing airplanes.

Chinese President Hu Jintao arrived at the White House on Wednesday for a state visit with President Barack Obama.

The U.S. government and business leaders have accused China of depressing the value of its currency, which prevented exporters from breaking into the growing Chinese market.

The joint ventures and partnerships announced by GE Wednesday span the clean energy, aviation and rail transportation sectors.

There will be more than $1 billion in exports from the U.S. and 4,500 U.S. jobs created, the company said.

GE Energy signed a joint venture with Shenhua Group Corp. Tuesday to develop coal gasification technologies in China. The subsidiary will also work with China Huadian Corp. to develop more natural gas power generation.

General Electric expects the sale of at least 50 gas-turbine generators in China over the next five years.
GE Aviation and Aviation Industry Corp. of China will develop and market avionics systems, including China's first large, homegrown passenger jet.

General Electric signed a letter of intent with China's Ministry of Railways to provide $350 million worth of U.S.-built locomotives, locomotive subassembly kits, service support and signaling systems for China's railway upgrade.

Some of the joint projects may be headed for the U.S., including a potential collaboration on high-speed rail projects in North America.

Last month, a Chinese passenger train hit a record speed of 302 miles per hour during a test run of a yet-to-be opened link between Beijing and Shanghai, state media said.