EMU rear-end collision accident will hit China's economic growth rate

The impact of the rear-end accident on economic psychology is hard to diminish in the short term.

In 2010, China’s railway investment reached an unprecedented 842.6 billion yuan, and the huge investment has also given birth to the impressive high-speed rail segment in the stock market. The “Twelfth Five-Year Plan” high-speed rail plan will control the total production scale of the 2015 new high-speed rail line to be controlled within 30,000 kilometers, and will arrange infrastructure investment of 2.8 trillion yuan, and will reach 45,000 kilometers of national fast-track railway by 2015. Faced with such a huge investment, behind it is a huge industrial chain.

The high-speed rail incident not only caused the entire stock market to fluctuate greatly yesterday, but also had a huge impact on the entire high-speed rail industry chain. If the construction of high-speed rails slows, the demand for related equipment will also slow down. From large-scale equipment such as railway construction, locomotive manufacturing, electrical equipment, and communication systems, to small brake pads, shock absorbing rubber, and high-speed train rear-end collisions, the heartbeats of many upstream and downstream companies are hit.

Implicated in the slowdown of the high-speed rail construction industry chain In the past six months, the former railway minister Liu Zhijun was dismissed for "serious violations of discipline." The new railway minister, Sheng Guangzu, announced that he had significantly lowered the maximum speed of high-speed train operations because of safety concerns. The newly built Beijing-Shanghai high-speed rail has been repeatedly plagued by suspension. The rear-end collision and the frequent Beijing-Shanghai high-speed rail failure alarmed the entire high-speed rail industry.

It is an indisputable fact that the high debt of the railway and the high cost of debt issuance. Data show that the debt of the Ministry of Railways has tripled in two years to 1.98 trillion yuan. Last Thursday, the Ministry of Railways had just suffered a rare "lost" in tenders for the third period of this year's short-term financing bills. After the rear-end collision accident, the Ministry of Railways was once again questioned by many parties in the market and it was tantamount to worsening the issue of the Ministry of Railways bonds.

Dagong International mentioned the unfavorable factors faced by the Ministry of Railways in the rating report of the bonds: “With the expansion of the railway construction scale, the scale of debt of the Ministry of Railways will continue to expand; at the same time, the overall level of railway freight rates is not high and the cost is rising. Under the influence of other factors, the profitability of the Ministry of Railways is subject to certain restrictions."

Guotai Junan published a research report and pointed out that high-speed rail operators will be severely hit. It is expected that the Ministry of Railways will pay more attention to the safety of railway operations, the pace of railway construction will further slow down, and the growth of related railway equipment companies will be affected.

Like the falling dominoes, the rear-end accident has caused a huge high-speed rail industry chain. Some analysts said that the current cause of the rear-end accident has not been implemented, resulting in every aspect of the high-speed rail industry chain being questioned.

According to reports, there are 32 listed companies participating in the high-speed rail chain in China. The three companies listed on the GEM, Terrell, Century Reale, and Jiaxun Feihong, were temporarily suspended by the Shenzhen Stock Exchange before their opening yesterday due to the system and equipment suppliers serving as the accident route. After trespassing on the company’s products, the company falsified the accident in the afternoon, but it still fell 8.93% in the afternoon.

The high-speed rail concept stocks all shocked yesterday and fell sharply. The overall drop was 6.67%, ranking the first in all sectors. The decline in China CNR and CSR was also around 9%. The data shows that the fund has long been withdrawn from the concept of high-speed rail in the second quarter.

The high-speed rail industry has severely damaged the rear-end accident, which has fallen from the sky and spread across China's high-speed rail exports.

According to the statistics of the International Railway Federation, in addition to China, more than 10 countries are currently building high-speed railways, and the new mileage is expected to reach around 10,000 kilometers in the next 10 years. If the infrastructure cost of overseas high-speed rail units is equivalent to RMB 300 million/km, the overseas high-speed rail infrastructure market will reach RMB 3 trillion in the next 10 years.

According to the original forecast, China's high-speed rail influence can be gradually extended to all countries in the world, especially the developing countries whose infrastructure is relatively backward. CSR hopes to compete with Alstom and Siemens, the originators of high-speed rail, for the world market through 10 years of development. In early July, CSR intercity EMUs were exported to Malaysia for the first time and became a breakthrough. However, in a few days time, there was a rear-end event that shocked the world. Competition for the world market is bound to be affected. Today, it is only a question of the quality of motor vehicles. Even if there is no definite evidence, it is enough to bring about the fear of canceling orders.

“The real disclosure of the expected problem,” Sun Lijian said, the current market is in fear, the market will continue to wait and see in the short term, and then according to the cause of the accident, the market will have a rational direction, and the short-term impact will disappear.

Accidents questioned the impact of economic quality taking off In addition to the imminent impact of the industry, the high-speed train's rear-end incident may also have a certain impact on the entire macro economy. "Let China's economy slow down and shift to a more quality-oriented approach." A report yesterday by foreign media sparked the call of countless people. The Chinese economy may really need to achieve a change from speed to quality.

Yesterday, when interviewed by this reporter, Sun Lijian, deputy dean of the School of Economics at Fudan University, believed that whether the high-speed rail accident represented a turning point, it was necessary to look at the disclosure of information and whether it could be completely transparent to expose the cause of the incident. The later the information was disclosed, the public's skepticism about the high-speed rail industry began to spread until it became suspicious to every aspect, leading to a bearish outlook across the board.

"We must pursue not only the quality problems of economic development but also the problems of management." Sun Lijian said that once the problems arise in quality, the impact on the high-speed rail industry may be greater. It reflects great joy, not focusing on quality but on speed. In the long-term development, we must slow down and focus on quality. If it is a matter of management, it is necessary to fully recognize the major lethality of high-tech and low-probability events, attach importance to management, and reduce the possibility of accidents.

“Small-probability events can easily lead to disasters.” Sun Lijian believes that the problem reflected by the motor vehicle incident is that the rapid development of the economy is only a matter of keeping up with the hardware. The management system is not well improved. “The vigorous development of hardware has made people too superstitious. And relying on high technology, and people's initiative has not been well started."

Sun Lijian said that the healthy development of the economy requires a complete dual insurance system. Once the automation fails, the artificial high speed festival can alleviate the crisis.

From an industrial point of view, the high-speed rail construction itself is a huge industrial chain. As far as the construction process is concerned, it covers many stages such as infrastructure construction, track laying, vehicle production acquisition and operation management. Huge investment and concentrated large-scale construction will benefit the entire industrial chain. Long-term radiation involves a wide range of stakeholders and a large number of industries and people.

From a strategic point of view, China’s high-speed rail has a decisive role in the adjustment of industrial structure. Sun Lijian also said that this time the high-speed rail is set to create weight, and its impact on the economy is still a short-term behavior. Sun Lijian believes that the market will return to normal conditions. "I am still optimistic about the development of high-speed rail, especially with the trend of urbanization. The high-speed rail industry has potential and development significance." Source Nanfang Daily