To be clear, the Wenzhou rail crash was truly a tragedy, and its aftermath indicated a strong need for reform of the existing system. But, even though it is taken as an article of blind faith among many in the Western press and expat community, it is highly unclear if privatisation will do anything to help prevent future accidents, or indeed anything at all, except the bloat of the state and the profit of the newly-created corporation (undoubtedly to be owned by a family member of someone on the State Council), at the particular expense of the migrant workers who depend on the rail to get to their jobs, and to get back home to their significant others and their children.
To this effect, two economics professors in the US and three graduate students have sent an open letter to the People’s Congress, expressing their concerns. The original has (perhaps unsurprisingly) been censored out of existence from the Sina blogs, but I have translated it in full, and provided the original here:
Open letter to the 12th National People’s Congress, regarding our views of the State Council reform plan
Esteemed delegates:
We are professors and doctoral students of economics; all of us are Chinese citizens. On the occasion of the first meeting of the Twelfth National People’s Congress, we wish to provide you, for your earnest consideration, some of our views on the issue of the railway management system.
According to news reports, the State Council’s institutional reform programme will be considered at the National People’s Congress; the content of which includes both the revocation of the Ministry of Railways and the chartering of new railway companies, to facilitate the introduction of private capital. We are deeply concerned about this reform programme, and must not be remiss in exercising our responsibilities as citizens to express our views.
The Ministry of Railways was founded in the early days of the People’s Republic. For the past 60 years, the employees of the Ministry of Railways have worked tirelessly to bring about socialist economic development and contribute to the national defence. Since reform-and-opening, railway construction has developed tremendously, has aided the development of each of the national economy’s various sectors, and has met the long-distance transportation needs of the vast majority of the Chinese populace (particularly those in the middle and working classes).
Currently, the volume of China’s rail business has reached second place in world rankings, with the volume of electric and high-speed rail business having reached first place. Looking at the statistics, from 2000 to 2010, China’s rail system transported thirteen billion passengers, with a death rate from serious accidents of only two passengers per hundred million. Contrast this with Japan’s death rate from serious accidents of nine passengers per hundred million over the same period, and India’s death rate of nine-hundred twenty passengers per hundred million; it is clear that China’s rail system is comparatively safe when compared with the performance of other systems internationally.
It is common knowledge that our nation’s ordinary passenger rail service is affordable, and in the 18 years since 1995, to meet the transportation needs of China’s many struggling labourers, the rail prices have never risen. For the high-speed rail services which cater primarily to middle- and upper-class passengers, the average high-speed rail fare per kilometre is equivalent to 4 euro cents. By contrast, the average high-speed rail fare per kilometre in Germany is 27 euro cents; in Japan, it is 22.
These facts demonstrate that the current rail management system basically aligns with the actual goals of China’s economic and social development. Our nation’s railway growth and operational conditions are the pinnacle of those in the developing world, and even surpass those of some developed nations.
Based on these facts, we believe that the State Council, having failed to account for the full range of views on the topic and particularly having failed to consult the broadly-held views of the vast majority of the Chinese people, and lightly advocating the repeal and privatisation of the Ministry of Railways under their institutional reform plan, are being completely careless and irresponsible.
Firstly, the full argument must be set out publicly: what important, tangible benefits (as opposed to benefits supposed by academic conjecture) the repeal of the Ministry of Railways, establishment of a private rail corporation and introduction of private capital will have for the vast majority of the Chinese people, should be clearly stated to them. The opposing view should also be accorded the full opportunity to be published and to be heard.
Conversely, will the repeal of the Ministry of Railways, establishment of a private rail corporation and introduction of private capital have any great risks and heavy costs? Rail is hardly a cutting-edge industry; every country on earth has plenty of historical experience with rail to draw upon. In comparing our railways with those of capitalist nations - which experiences were successful, and which failures we can take lessons from - there is a great wealth of empirical data for each. And the lessons of the failures of rail privatisation in many other nations of the world are painful. Do we wish to learn from these painful lessons? Is the State Council prepared to avoid these failures? If these preparations haven’t been made; if institutions are lightly changed; if the fundamental well-being of 1.3 billion people is made into a plaything; how is this not careless and irresponsible behaviour?
The [proposed] railway corporation will be organised according to market principles, with the acquisition of profit as its goal. Train tickets will no longer be affordable. Undoubtedly there will be grave consequences for the middle and working classes, particularly for the vital well-being of migrant workers. Also, in order to develop new railways in remote middle and western regions of China, the railway corporation must receive state subsidies. With the introduction of private capital into this railway corporation, state subsidies are no longer used to meet the needs of the public, but rather become a disguised instrument of corporate welfare. Take the United Kingdom for example. After private capital was introduced into the railway system, UK train fares have become the highest of any country in the world. Simultaneously, the government of the UK is forced to acquire vast amounts of funding to subsidise private capital, ten times what was required before privatisation. Since privatisation, not only has the quality of rail transport not improved, but indeed has become Europe’s most crowded. Also, the UK rail transport system’s has suffered one accident after another, including the disastrous Hatfield accident in 2000 due to inadequate maintenance.
Even though we are unable to understand the decision-making process of the relevant departments of the State Council, from all available news reports we were still able to learn that those members advocating the dissolution of the Ministry of Railways hope to thereby clear away all obstacles to full privatisation and marketisation of the rail system. On the topic of planning and markets, Comrade Deng Xiaoping said, ‘Planning and market forces are not the essential difference between socialism and capitalism. A planned economy is not the definition of socialism, because there is planning under capitalism; the market economy happens under socialism, too. Planning and market forces are both ways of controlling economic activity’. Obviously Comrade Xiaoping wanted to use the market as only one of many methods of economic development, not as the only method, and certainly not as the only form of a socialist economic system! If capitalism can use [certain elements of state-directed] planning, socialism certainly can also; further, Comrade Deng never advocated full privatisation, and never believed that the people could be served only by the introduction of private capital.
Over the past period [of reform-and-opening], although China’s economic reforms brought great achievements, they also incurred heavy costs in many areas. In these areas, the one-sided emphasis on marketisation by the leaders of the reform caused de facto privatisation for a large number of state-owned enterprises; the results were an unprecedented wealth gap, a massive drain of state assets, a deluge of political corruption, exacerbated environmental pollution; on top of that, many people could no longer afford housing, medical care, education, or even secure food for themselves - such were the ill effects. Thus can the enormous social and environmental costs to this point in history be summarised.
The ill effects of the blind marketisation of the past have not yet been fully accounted for or diagnosed, let alone corrected one at a time, but [the government is] already eager to launch new marketisations, especially in the domain of the national and popular welfare (as the rail system is). When one day this causes massive problems, who shall be held accountable, and how shall they exercise their accountability? In front of the entire nation, who can possibly take this level of responsibility?
Naturally, the rail system and its management as they stand indeed have many shortcomings and defects. Inside the Ministry of Railways there are problems of political corruption, insufficient supervision, and so forth. Nowadays these problems exist in varying degrees in every branch and every level of China’s government. If our country’s leadership truly has the will and the ability, they should strive to end or at least constrain political corruption and make the government more efficient. In this way, even if we retain the Ministry of Railways, the problems the Ministry of Railways has will naturally follow suit. The Ministry will become better as the other branches of government do, thus becoming transparent, honest and effective.
If the government has no means of resolving the problems of political corruption and inept supervision, please inform us: what problems will reorganising the Ministry of Railways into a railway corporation solve? Can the government really simply discard its responsibilities to supervise the railways by selling the Ministry of Railways to private investors? If we cannot expect the government to resolve the problems of the Ministry of Railways, what basis do we have to believe that the government is capable of solving the problems associated with establishing a new railway corporate office? Or those of the Ministry of Communications? Or those of the State Council?
Of course the existing railway system certainly has problems, but more important are the results it has achieved. It has embodied the excellence of socialism, and its vast staff have proven their merits. Whatever considerations ultimately led the relevant authorities to this recommendation, it is inconceivable that a system our nation uses, which has proven superior, should be discontinued; it is inconceivable that we should not strive to improve on the basis of this system; and it is inconceivable that we should not learn the lessons of systems which have no advantage over ours and which have no shortage of failures.
Esteemed delegates, you are the National People’s Congress: under our nation’s Constitution, you wield the supreme powers of the state on behalf of the people. As ordinary citizens, we earnestly hope that you are capable of taking seriously your powers of representation, seriously consider the State Council’s reform plan, approve those sections which are in the interest of the nation and her people, and reject those sections which do not conform to those interests.
The eyes of the entire nation are upon you.
Li Minqi - Associate Professor, Economics Department, University of Utah
Xu Zhun - PhD, Economics Department, University of Massachusetts-Amherst; Lecturer, School of Economics, Renmin University
Li Zhongjin - PhD, Economics Department, University of Massachusetts-Amherst
Chen Ying - PhD, Economics Department, University of Massachusetts-Amherst
Qi Hao - PhD, Economics Department, University of Massachusetts-Amherst
致第十二届全国人民代表大会的公开 信
——关于国务院机构改革方案的意见
各位代表：
我们分别是经济学领域的大学教师、 博士 研究生。我们都是中国公民。值此第十二届全国人民代表大会第一次会议召开之际，就铁路管理体制问题向你们提供一些意见，望得 到你们认真考虑。
据新闻报道，此次全国人大会议，将 要审 议国务院提出的机构改革方案，其中一项内容是要撤销铁道部，另成立铁路总公司，为引进私人资本提供方便。对于这个改革方案， 我们深感忧虑，不能不行使公民的职责、表达我们的意见。
铁道部成立于建国初期。铁道部的广 大职 工为六十多年的社会主义经济建设、国防事业立下了汗马功劳。改革开放以来，铁路建设大发展，很好地配合并且促进了国民经济各 行业的发展，并且满足了广大人民群众（特别是广大中下层群众）在长途交通运输方面的需要。
目前，我国铁路营业里程已经达到世 界第 二位，电气化铁路里程和高速铁路里程均达到世界第一位。据统计，2000年至2010年，我国铁路系统累计运送旅客130亿人次，每亿人次重大事故死亡人数2人。相比之下，同期，日本铁路每亿 人次 重大事故死亡人数9人；印度每亿人次重大事故死亡人数920人。可见，我国的铁路系统与世界其 它国 家相比，是比较安全的。
众所周知，我国的普通旅客铁路是经 济实 惠的，1995年以来18年没有涨价，在困难的情况下满足了 亿万普通劳动者的需要。就主要以中高层收入者为服务对象的高速 铁路来说，我国高铁每公里平均票价仅0.04欧元。相比之下，德国高铁的平均票 价为 每公里0.27欧元，日本为每公里0.22欧元。
这些事实说明，我国目前的铁路管理 体制 基本上符合我国经济和社会发展的实际需要。我国的铁路发展和运营状况在所有发展中国家中是领先的，有些方面甚至超过了发达国 家。
根据这些事实，我们认为，国务院有 关部 门，在没有充分听取各方面意见特别是征求广大人民群众意见的情况下，轻易推出撤销铁道部的机构改革方案，是十分草率的，是不 够负责的。
首先，撤销铁道部，另成立铁路总公 司并 引进私人资本，对于广大人民群众来说，有哪些重大的、实实在在的好处（而不仅仅是理论上的、学术上的好处），要经过充分论 证，要向广大人民群众讲清楚。反面的意见，也要给予充分发表和听取的机会。
另一方面，撤销铁道部并成立铁路总 公 司、引进私人资本后，有没有重大风险、有没有重大代价？铁路不是什么新兴产业，世界各国的历史经验是很丰富的。资本主义国家 的铁路与我们相比，有哪些成功的经验、有哪些失败的教训，都是有大量资料的。世界上许多国家铁路私有化失败的教训是惨痛 的。 这些惨痛的失败教训，要不要吸取？国务院有关部门对于避免这些失败教训有没有准备？如果没有准备，轻易改动体制，拿事关十三 亿人民根本利益的大事开玩笑，难道不是草率和不负责任吗？
铁路总公司一旦按照市场原则把利润 作为 目标，火车票将不再廉价，这无疑会影响广大中下层群众尤其是农民工的切身利益。同时，铁路要想在中西部偏远地区发展，必然需 要国家财政的补贴。铁路总公司一旦引入私人资本，国家补贴就不再纯粹用于满足人民群众的需要，而成了变相补贴私人资本的 工 具。以英国为例。私人资本进入铁路系统后，英国成为全世界火车票价最高的国家。同时，政府要拿出巨额资金补贴私人资本，是私 有化之前的数十倍。自私有化以来，英国铁路的服务质量不仅没有提高，反而成为欧洲最拥挤的铁路系统；同时，英国铁路交通 事故 层出不穷，包括2000年因铁路维护不力而发生的哈特菲尔德火车事故。
虽然我们无从了解国务院有关部门决 策的 具体过程，但是根据各方面新闻报道，仍然了解到，主张撤销铁道部的一些人士希望通过撤销铁道部为铁路系统全面私有化、市场化 扫清障碍。关于计划和市场的问题，邓小平同志讲过：“计划多一点还是市场多一点，不是社会主义与资本主义的本质区别。计 划经 济不等于社会主义，资本主义也有计划；市场经济不等于资本主义，社会主义也有市场。计划和市场都是经济手段。”显然，小平同 志只是将市场作为经济发展的手段之一，而决不是唯一的手段，更不是社会主义经济制度的唯一形式。既然资本主义可以有计 划，社 会主义更可以有计划。邓小平同志更是从来没有主张过私有化，也从来没有认为社会主义的经济部门只有靠引进私人资本才能为人民 服务。
过去的一个时期，我国的经济改革虽 然取 得了很大成绩，但是在许多领域也付出了重大代价。在某些改革领域，由于改革主导者片面强调市场化，客观上对大量国有企业搞了 私有化，结果造成贫富差距悬殊、国有资产大批流失、贪污腐败泛滥、环境污染恶化以及许多人民群众住不起房、看不起病、上 不起 学、吃不到放心食品等恶果。对于这些巨大的社会和环境代价，是到了好好总结一下的时候了。
过去盲目市场化造成的恶果，还没有 充分 总结，找出病因，并且一一纠正，就急于发动新的市场化，又是在铁路这样关系国计民生的领域，一旦将来出了问题、出了大问题， 由谁来负责，要负什么样的责任？在全国人民面前，又有谁负得起这个责任？
当然，铁路系统管理的现状，确实有 很多 不足和缺陷。铁路系统内部，也存在着贪污腐败和管理不善等问题。这些问题，目前也是在我国各级政府管理部门中不同程度存在 的。如果咱们国家的领导人确实有决心、有能力，要努力杜绝或者至少遏制贪污腐败、提高政府管理效率，那么，即使保留铁道 部， 铁道部现有的一些问题自然也会随着各级政府部门的改善而改善，从而成为清正、廉洁、高效的铁道部。
如果政府对于贪污腐败和管理不善的 问题 没有办法，那么请问，把铁道部改组为铁路总公司又能解决什么问题？就是把铁路都卖给私人，政府能丢弃监督管理铁路的责任吗？ 如果政府解决不好铁道部的问题，我们凭什么相信政府可以解决好新成立的铁路局的问题，可以解决好交通部的问题，可以解决 好国 务院的问题？
本来，我国现有的铁路管理体制，虽 然存 在一定问题，但是成绩是主要的，是体现了社会主义优越性的，铁路系统的广大职工是有功劳的。对于我国现有的有一定优越性的体 制不坚持、不在坚持的基础上努力加以完善，而非要去学资本主义国家并没有什么优越性并且不乏失败教训的体制，有关部门到 底是 出于什么考虑，实在是匪夷所思！
各位代表，你们都是全国人大代表， 根据 我国宪法代表人民行使国家最高权力。作为普通公民，我们殷切希望，你们能够认真行使代表权，认真审议国务院机构改革方案，批 准符合国家和人民利益的部分，否决那些不符合国家和人民利益的部分。
全国人民在看着你们！
李民骐 犹他大学经济学系副教授
许 准 中国人民大学经济学院讲师，麻省州 立大学经济学系博士
李钟瑾 麻省州立大学经济学系博士研究生
陈 瀛 麻省州立大学经济学系博士研究生
齐 昊 麻省州立大学经济学系博士研究生
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