Report No: ACS9734 People's Republic of China Regional Economic Impact Analysis of High Speed Rail in China Main Report June 25, 2014 . China and Mongolia Sustainable Development Sector Unit EAST ASIA AND PACIFIC REGION . Document of the World Bank Standard Disclaimer: . This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Copyright Statement: The material in this publication is copyrighted. 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PREFACE This Report is the main output of a Technical Assistance activity, prepared for the World Bank and for the China Railway Corporation (CRC), by an international team consisting of Dr. Ying Jin, Mr. Richard G Bullock, Dr. Runze Yu and Ms. Nanyan Zhou, and a Chinese team consisting of Mr. Jinglin Nan and Mr. Mingming Gao from the Third Railway Survey and Design Institute (TSDI), Mr. Zhongyi Xu and Mr. Chunjiang Guo from the CRC Economic Planning and Research Institute (EPRI), and Mr. Lixin Shi from the Institute of Economic System and Management of National Development and Reform Commission (NDRC). This Technical Assistance has been led by Mr. Gerald Ollivier (Sr. Infrastructure Specialist, World Bank) and by Mr. Jianping Zhang (Director of Planning, CRC). ACKNOWLEDGEMENTS The Study Team acknowledges the help, cooperation and information provided by the CRC in the course of this work and for the pertinent comments provided by the National Development and Reform Commission (NDRC), the Ministry of Finance, CRC, the Chinese Academy of Social Sciences, the China Road Transport Association, Beijing Jiaotong University, the Economic Planning and Research Institute, the China Academy of Railway Sciences, the Railway Investment Corporation, TSDI, and by peer reviewers from the World Bank (Uwe Deichmann, Mark Roberts, Julian Lampietti, and Andreas Kopp), Sector Managers (Mark Lundell and Abhas Jha) and members of the Steering Committee (Yanfang Zhang, Changjiang Zhao, Yuping Shao, Lei Miao, and Shujuan Cai). Technical Assistance Regional Economic Impact Analysis of China’s High Speed Rail CONTENTS EXECUTIVE SUMMARY .............................................................................................................................................. 1 GLOSSARY ............................................................................................................................................................. 6 CHAPTER 1 INTRODUCTION ................................................................................................................................... 8 1.1 Background ........................................................................................................................................................ 8 1.2 Objective and Scope ........................................................................................................................................ 10 1.3 Structure of this Report .................................................................................................................................... 11 CHAPTER 2 REGIONAL ECONOMIC IMPACT ANALYSIS: .............................................................................12 THEORIES, INDICATORS, AND METHODS ...........................................................................................................12 2.1 Overview.......................................................................................................................................................... 12 2.2 Theoretical Basis.............................................................................................................................................. 12 2.3 Choice of Regional Economic Impact Indicators ............................................................................................ 14 2.4 Quantification of Regional Economic Impacts ................................................................................................ 15 CHAPTER 3 AN OVERVIEW OF REGIONAL ECONOMIC IMPACT ANALYSES OF ...................................20 RAILWAY PROJECTS IN CHINA ...............................................................................................................................20 3.1 Progress in Research and Practice ................................................................................................................... 20 3.2 Regional Economic Impact Analysis in China: Outlook ................................................................................. 26 CHAPTER 4 REGIONAL ECONOMIC IMPACT ANALYSIS: ..............................................................................28 AN INTERNATIONAL REVIEW .................................................................................................................................28 4.1 Overview.......................................................................................................................................................... 28 4.2 Ex Post Studies ................................................................................................................................................ 29 4.3 Ex-Ante Assessments ....................................................................................................................................... 33 4.4 Key Lessons ..................................................................................................................................................... 36 CHAPTER 5 RELEVANT WORLD BANK STUDIES IN CHINA .........................................................................37 5.1 Overview.......................................................................................................................................................... 37 5.2 Analysis of the Relationship between Spatial Proximity and Productivity in Guangdong .............................. 38 CHAPTER 6 METHODOLOGY DEVELOPMENT..................................................................................................41 FOR REGIONAL ECONOMIC IMPACT ANALYSIS IN CHINA ...........................................................................41 6.1 Overview of the Approach ............................................................................................................................... 41 6.2 Lessons from Applications in Other Countries ................................................................................................ 43 6.3 Design of Predictive Models ............................................................................................................................ 44 6.4 Approach to Parameter Calibration.................................................................................................................. 48 6.5 Worked examples ............................................................................................................................................. 49 CHAPTER 7 CASE STUDIES ....................................................................................................................................51 7.1 Selection of Case Study Areas ......................................................................................................................... 51 7.2 Collection of Background Data ....................................................................................................................... 52 7.3 On-board Survey of HSR and Other Train Passengers .................................................................................... 52 7.4 Business and Government Agency Interviews ................................................................................................. 57 7.5 Agglomeration Effects on Productivity and GDP ............................................................................................ 60 7.5.1 Scope of calculation ................................................................................................................................ 60 7.5.2 Principles for calculating productivity effects from agglomeration ........................................................ 61 7.5.3 Network characteristics ..........................................................................................................................