China is taking the rare step of sharply increasing fares for riders on four major bullet train lines, in its broadest move to address rising costs and heavy debts since construction of the system began nearly two decades ago.
The higher prices for train tickets are part of a push to raise prices for public services. Earlier this year, water and natural gas bills started going up in some cities.
Public services in China are heavily subsidized by local governments. But huge municipal debts mean that these governments have less money on hand to keep prices down.
Increasing prices can stem losses at some giant state-owned enterprises that provide these services. And making consumers pay more helps offset the falling prices that are widespread in China’s economy as growth slows.
China has already pushed up electricity charges considerably since 2021 for many factories, although residential customers continue to pay low, subsidized electricity rates.
“Large factories should all be paying a market rate now,” said David Fishman, senior manager in Shanghai for the Lantau Group, a Singapore-based power consulting firm.
Raising rail fares is a fraught political issue in China. The bullet trains are a symbol of the country’s capacity to build infrastructure, often even before there is consumer demand for it. But that infrastructure has been paid for with enormous borrowing, which has reached $870 billion just for China State Railway Group, the state-owned enterprise that runs the rail network.
