China's High Speed Rail

High speed rail transportation technology has greatly enhanced market accessibility, reduced time costs thus expanding labor markets, and strengthened regional agglomeration.

HSR Timeline and Expansion

2007

2008

2009

2010

2011

2012

2013

2014

2015

2017

2018

2016

CFC Lab's Comprehensive HSR Database

To support our research we have consolidated data relating to HSR. This database includes variables for cities (nodes) and networks (edges) between these cities.

CFC Lab’s HSR research focuses on three main themes:

Can high-speed rail new towns survive?

Does high-speed rail greatly enhance knowledge diffusion, market accessibility and domestic trade flows?

HSR +

Value Creation

Do bullet trains facilitate the regional integration of mega cities and nearby secondary cities?

1.

HSR New Towns

Regional transportation networks increase inter-city connectivity and reshape the geographical distribution of economic activity across and within cities. In this context, many Chinese city leaders are competing for high-speed rail (HSR) to promote local economic growth.

HSR new town development from satellite imagery

Source: Google Earth

Empirical Strategy

 

City-level

Difference-in-difference estimator is used to assess the impact of market integration induced by the establishment of HSR connection on the local economy of the metropolitan area. We employ HSR traffic flow data and network measurements to construct better measures of the impact intensity of HSR station.

 

HSR new town level

Using satellite imagery and online archives of government documents, we identify over 200 HSR new towns with urban land use, and construct urban vibrancy measures with extensive data on firm formalization and consumer amenities at high spatial resolutions. We also collect county-level statistics, such as urban population, GDP, and fiscal revenue. These granular datasets help us measure the urban vibrancy performance of these HSR new towns and local fundamentals.

2.
HSR Networks

HSR has greatly enhanced knowledge diffusion and idea spillovers, market accessibility and regional agglomeration, and domestic trade flows.

Does China’s HSR encourage further knowledge diffusion and idea spillovers?


This paper uses the construction of China’s high speed rail (HSR) network as a natural experiment to test this claim. HSR connects major cities that feature the nation’s best universities to secondary cities. Since bullet trains reduce cross-city commute times, they reduce the cost of face-to-face interactions between skilled workers who work in different cities. 

Using a database listing research paper publication and citations, we document a complementary effect between knowledge production and the transportation network. 

Co-authors’ productivity rises and more new co-author pairs emerge when secondary cities are connected by bullet train to China’s major cities.

Spatial distribution of HSR and co-authored papers.

High-Speed Railway Connections and Industrial Upgrading

In Progress

Does China’s HSR influence industrial upgrading and stimulate economic development?


The perfection of transportation facilities, especially the popularity of HSR, motivates enterprises to relocate different sectors, leaving the main business and core office personnel in big cities to be closer to the market and stakeholders, while other back-office services and non-core employees are transferred to other small cities that can be reached by high-speed rail. Therefore, the operation of HSR may bring about industrial shifts and play a role in industrial upgrading.

This paper mainly takes China's railway infrastructure construction as the background and the operation of high-speed railways in each city is used as a quasi-experiment to study the impact of railway speed-ups on industrial upgrading. Cities under different development stages are affected through different channels. This paper has important practical guiding significance for the construction of transportation facilities, industrial transfer and upgrading, industrial division of labor and economic integration.

High-Speed Connections, Market Segmentation and Domestic Trade

In Progress

Will large-scale public investment in high-speed railway (HSR) undertaken in China during the last decade affect regional access to domestic markets? 

Using high quality data describing high-speed railway connections, domestic trade flows, and relevant covariates, we try to estimate the impact of HSR on the volume and composition of inter-province trade flows and market segmentation. 

 

The main findings show that the volume of goods traded increases and market segmentation becomes less severe with more HSR connections. Apart from benefiting from a more convenient exchange of production factors, the increased trade volume from HSR connections appears to be driven by information-based mechanism and suggest that the positive effect of HSR connection works through communication efficiency improvement and knowledge spillover. 

3.
HSR + Value Creation

Bullet trains in China facilitate access between secondary and mega cities while mitigating the cost of growing urban populations. This access stimulates the development of second- and third-tier cities by attracting people and firms out of megacities.

Do bullet trains facilitate the regional integration of mega cities and nearby secondary cities?

Methodology and data


To measure the effect of bullet trains on people's interest in secondary cities, we looked at real estate price changes in 262 cities and compared that to a city's change in market potential (due to bullet trains) from 2006 to 2010.

As China’s Ministry of Railway is unlikely to randomly choose which cities will be connected by bullet trains to the megacities, we use two instrumental variables in our analysis: the nation’s historical railway network, and military deployment.

These are two city-level instrumental variables that are correlated with the likelihood that a city is connected by bullet trains, but unlikely to be correlated with the unobserved determinants of a city’s real estate price growth.


Bullet trains attract people and firms to secondary cities.
The introduction of bullet trains is associated with rising real estate prices in nearby secondary cities.

On average, 59% of market potential increase in secondary cities with a bullet train stop is due to the introduction of bullet trains.

If market potential increased by 10% in a city, we would expect a 4.5% increase in its average housing price.


Policy implications


Through facilitating access between cities, bullet trains seem to stimulate the development of second- and third-tier cities by attracting people and firms out of megacities. This also helps to alleviate rising urban growth costs such as congestion and pollution. Bullet trains play an important role in integrating China’s cities into a system of open cities.

Kai Ying Lau

MIT CFC Lab

Lei Dong

MIT CFC Lab, Senseable City Lab


 

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