March of the Penguins
3.158 billion passengers will trek across China in the forty days between January 11 and February 21. Not different people, obviously, as the transit systems double and triple count individuals making return trips and layovers. Even so, the end result is still the same; over the next five weeks, China’s infrastructure will have to absorb a little less than half the world’s population in commuters as students and workers go home for the holidays. Spring Festival is unquestionably the largest mass migration of human beings on the planet, and the government has to handle this phenomenon every single year in the dead of winter when travel conditions are at their worst.
According to announcements from the NDRC, Ministry of Transport, Ministry of Rail, and other relevant ministries (see full article in Chinese here), China’s 3.158 billion commuters will be distributed in the following ways:
- 2.845 billion will drive (71.13 million per day)
- 235 million will take the train (5.88 million per day)
- 45.5 million will travel by boat (1.14 million per day)
- 24 million will fly home (0.6 million per day)
Rail is the obvious option for those headed inland who can’t afford a plane ticket. Even if all of China’s lower classes had access to automobiles, who would ever want to drive 1,130 miles of traffic from Beijing back to Sichuan when they can just sleep on the train? The 2.845 billion car trips this winter won’t be made by motor enthusiasts. They will be made by people who simply couldn’t get one of China’s precious few train tickets.
Thousand of workers queue in vain for a train ticket home
Angry and Empty-Handed
Spring Festival train tickets are a precious commodity in China, and so like iPads or access to the Shanghai World Expo, Chinese people will spend days lining up for them. The catch is that train tickets are only available from certain designated kiosks located throughout the city, and can only be purchased up to five days before your trip. Supply is extremely limited, and so tickets generally sell out within the first hour of being on sale. You don’t have to be a master of game theory to predict that every year China will see a longer line of angry, cold, and tired citizens lining up at these ticket windows with hopes of getting a seat on the country's increasingly bottlenecked train system.
China plans to dramatically boost consumption by increasing urbanization to 51.5% by 2015. This means that over the next four years, an additional 53.6 million Chinese citizens will move from rural to urban areas. Many of those relocating will be migrant workers, looking to build infrastructure in China’s burgeoning cities in exchange for some money to send back home. Without roots in the city, though, Chinese culture dictates that these people all return home each winter to spend a few weeks with their families. Unless they have access to a car and a driver's license, the majority of these workers will lining up for a train ticket.
Don’t expect the supply-demand gap to improve. As of Q3 2011, the Ministry of Rail (MoR) was RMB 2.1 trillion in debt, making their debt ratio about 60%, up 7 percentage points from 2009. In early November, the government granted the MoR an additional RMB 250 billion in credit, of which RMB 140 billion was needed to make “emergency” late payments to rail workers. The workers were mostly billing for work done on China’s high-speed rail projects, over 70% of which have been suspended this year following a series of crashes and scandals that shook the nation and embarrassed the Ministry.
Fumbled Reform
The Chinese government realizes that with no hopes of closing the passenger rail supply gap, each year will see a larger mob of cold, frustrated workers disappointed at the news that they again won’t be able to go home to their families for the culture’s most significant holiday. In their frustration, the mob will turn their anger towards the Chinese government, or more specifically the MoR – the government body that monopolizes all of China’s railways.
If you can’t prevent the frustration, then at least prevent the mob. The government’s solution to the train ticket problem in 2012 was to pull most of the tickets from China’s traditional kiosks and sell them instead through a new online platform www.12306.cn. Tickets were linked to passengers’ personal identification number, which prevented people from buying bulk tickets and scalping them at stations for inflated prices. Guards were put in place at stations to ensure that ticket numbers matched the numbers on passengers ID cards. The new rules were broadcasted both online and over television news channels to make sure everyone got the message.
In their planning, the government seems to have overlooked the fact that the proportion of migrant workers to residents in the first-tier cities of Beijing, Shanghai and Guangzhou is more than 3:10. In Shenzhen, it is more than 7:10. Migrant workers live on bunk beds in dormitories. They don’t watch the news every day and they certainly don’t have internet access. They miss their homes, they miss their wives, and they have been looking forward to this train ride for the last 11 months.
Server Error
Predictably, migrant workers missed the memo. Many queued overnight in the freezing cold only to be turned away for not bringing their personal ID cards to the ticket window. Even the few who knew to bring proper documentation found themselves frustrated that most tickets were only available online, not at physical kiosks. Others found their way to public computers, but were unable to complete transactions without credit cards or online bank accounts.
To make matters worse, the government low-balled their servers after drastically underestimating consumer traffic. Users continually refreshed merchant pages hoping to be the first in line to buy tickets, netting a jaw-dropping 1.4 billion hits for the site in a 24-hour period on January 9. Broadband internet in China is already 1/10 the speed of that in the U.S., and so the equivalent of 20% of the world population logging onto the same site in just 24 hours caused more than a few problems.
Image of 12306.cn, down for repairs
What users didn’t know when angrily logging on and off of the frozen ticket website was that the system is built to lock users out after three unsuccessful attempts at purchasing tickets in a 24-hour period. As the day wore on and servers stabilized, the remaining patient few found themselves barred from finishing their transactions.
An Unsatisfying Punt
The MoR has acknowledged defeat for 2012, pushing major reforms to 2013. 12306.cn is still in use, but train tickets have been largely reallocated back to traditional sales kiosks. Train tickets will remain linked to passenger ID numbers, making this the one point of reform that will stick this season. Laborers caught in ticket lines without their ID cards will just have to come back next week and line up with the proper documentation and an extra blanket.
The announced plan for 2013 is to have a series of regional online ticket vendors, to replace its plan of funneling the entire nation onto a single website. This will take pressure off of the government servers and hopefully give citizens a 12-month window to set up online bank accounts and master the e-commerce learning curve. The problem still stands that if the government doesn’t find an effective way to alert migrant workers to new changes, the net effect will be trading one large national problem for a series of regional ones.
Chinese citizens are calling the Ministry’s statements their “first apology of 2012,” reflecting a growing bitter sentiment among the masses. Both on the street and online, Chinese are openly wondering why an unprofitable, corrupt, and inefficient government ministry continues to enjoy a monopoly over the nation’s railways. Over the last 12 months, the MoR has been faced with disastrous PR and a skyrocketing debt ratio. If the MoR isn't careful, their current minister may not last any longer than his predecessor.
"If I have seen a little further it is by standing on the shoulders of Giants."
- Isaac Newton
Chris Lowder is the Director of Marketing Services at China Monitor. For more insights from China Monitor and the China Economic Information Network (中国经济信息网), please visit our website at www.chinamonitorisg.com
Great post Chris, I'm enjoying reading your blog immensely :)
ReplyDelete