China significantly increases high-speed rail fares, foreign media: highlighting local debt levels

Recently, the Chinese government has significantly increased fares on four major high-speed rail lines. The New York Times pointed out that this move reflects the rising cost of the Chinese government providing public services and the increasingly serious debt problem. In the past, China's public services relied heavily on local government subsidies. However, as the government's debt piles up, the authorities are no longer able to help share related costs. Starting from the beginning of this year, some cities in China have also experienced increases in water and natural gas charges.

Price hikes for China's popular high-speed rail lines have made life worse for the grassroots

The report pointed out that China's adjustment of the cost of public services can prevent large state-owned enterprises from losing money and going bankrupt, and can also offset the decline in prices due to economic stagnation and deflation. Since 2021, the Chinese government has begun to gradually and significantly increase electricity bills for many factories.

In the case of high-speed rail, China relied on huge loans during the construction process. Just to operate the railway network, China State Railway Group, a state-owned enterprise, borrowed 6.13 trillion yuan, and many local government joint ventures also shared the construction cost. cost. However, the report pointed out that as these companies are now less and less able to repay their debts, some old railways need to be renovated and maintained. Many factors have forced China's high-speed rail system to increase fares.

The report mentioned that the routes where fares have increased significantly include the sections from Hangzhou to Shanghai, Changsha, Ningbo, and Wuhan to Guangzhou. During peak hours, first-class and second-class fares have increased by nearly 20%, while business class fares have increased. 39%. Officials said that by increasing fares during peak periods, greater discounts can be provided on off-peak tickets and slow trains.

The routes where fares have increased significantly include the sections from Hangzhou to Shanghai, Changsha, Ningbo, and Wuhan to Guangzhou. During peak times, first-class and second-class fares have increased by nearly 20%. (Reuters)

Foreign media: China’s economy is weak and it is difficult to achieve the 5% growth target through consumption

At the same time, the U.S. Wall Street Journal's report on China's economy also pointed out that despite the Chinese government's recent introduction of a number of economic stimulus policies, industrial producer prices continued to fall in April this year. The relevant data dropped by 2.5% from the previous month, marking the 19th consecutive month of decline.

The report quoted relevant economists as pointing out that although China's consumer prices rose slightly in April, the weak data showed that China could not rely on minimal consumption growth to reach the official high economic growth target of 5%.

In addition, looking only at the consumption data of this year's May Day holiday, although the number of Chinese people traveling increased, average consumption dropped, and per capita tourism expenditure dropped by 11.5% compared to 2019. This phenomenon reflects that when the economic outlook is uncertain, people generally choose to downgrade their consumption and travel to smaller cities with lower prices. At the same time, China's car sales in April also dropped 5.7% from the previous month, showing that people still have reservations about large-scale consumption.