That financing has already begun. In April this year, Taikang Asset Management Corp. was entrusted to issue 10 billion yuan ($1.33 billion) of three-year bonds used for construction of the railway with the MOR as the issuer. Twelve insurance companies purchased all of these bonds.

Established in May 2006 in Beijing, Taikang Asset Management Corp. is a state-owned insurance assets management corporation. During the construction period, insurance companies will invest in the Beijing-Shanghai high-speed railway with debt investment. After the project is completed, the debt may be changed into shares for the railway operating company.

Sources of capital

The money invested in the Beijing-Shanghai high-speed railway will mainly be used for creation of fixed and mobile facilities and the electronic control system. Of the three major investment fields, investment in fixed facilities will account for over 40 percent, while that in mobile facilities and electronic control systems will make up more than 50 percent.

Since fixed facilities involve construction of bridges, railway beds, tunnels and railway stations, suppliers of related construction materials such as cement, stone materials, iron and steel, non-ferrous metals and plastics, as well as equipment like tracklayers and grabs, will benefit greatly from the undertaking.

Mobile facilities, including trains and components, will bring large orders to the manufacturing industry and companies engaged in locomotive production. Iron and steel processing and related component processing will see abundant profits.

Construction of electronic control systems involves utilization of computer hardware and software technologies, high-end telecommunications equipment and a large amount of cables and fiber optics. Suppliers in these industries will also benefit.

In March this year, Klaus Kleinfeld, former chief executive officer of Siemens, disclosed that his company had secured a contract to supply signal technologies to the railway with a total value of several hundred million euros.

Suzhou Dafang Special Purpose Vehicle Manufacturing Co. Ltd., a private company in Jiangsu Province, also obtained a large order of over 10 million yuan to supply dual-use transporters (road and railway) for the project.

Positive impacts

The high-speed railway between Beijing and Shanghai, running through the municipalities of Beijing, Tianjin and Shanghai and the four provinces of Hebei, Shandong, Anhui and Jiangsu, connects two large economic areas of China: the Bohai rim economic sphere and the Yangtze River economic zone. As growing economic bases with rapid development, these areas are not only the driving force for China's economic development, but are also at the forefront of China's opening-up and participation in international economic competition.

When completed, the high-speed railway, to be devoted to passenger transport, will ease the traffic pressure between Beijing and Shanghai. The existing Beijing-Shanghai Railway will be converted to freight transport. After going into operation, the high-speed trains between the two cities are expected to transport more than 80 million passengers each year.

According to He Huawu, the high-speed railway will greatly enhance the handling capacity of the present Beijing-Shanghai Railway, allowing it to transport over 130 million tons of freight annually.

After completion, traveling time between Beijing and Shanghai will be shortened from nine hours to five hours. During the early period of operation, the interval between trains is set at four minutes, and it will be shortened to three minutes at the peak time. Each train will be able to carry 1,000-2,000 passengers, and there will be 110-120 round trains running each day. This development may create a threat to air carriers between the two cities, since train tickets are much cheaper than airfare. Plus, considering the time it takes to get to the airport and check in, traveling by air doesn't save much more time than a high-speed train.