When the first bullet train roared along a new high-speed rail line in eastern China’s Zhejiang province in September, the project’s investors were ecstatic.
The 350km/h railway would not only slash travel times between two of Zhejiang’s biggest cities; it had also broken new ground for private capital in China.
The 218-kilometre line, which links the coastal city of Wenzhou and the provincial capital Hangzhou, is one of the first Chinese high-speed rail projects to be funded, built and controlled by a private consortium, rather than the state.
It is part of a broader push in China to open up more parts of the economy to private investment, as the government seeks to restore confidence in the private sector and tap new funding sources to sustain its infrastructure-building drive.
As an early test case for the new model, the stakes of the project are high. Investors across China have been watching every twist and turn closely, to see if the line can succeed in generating positive returns for the consortium.
So far, it has been a bumpy ride. Six months after going into operation, the line is still firmly in the red and the consortium has found it has limited powers to turn things around.
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