Someone on Wikipedia added the following a few days ago:
China's HSR system as a whole, however, has incurred massive financial losses.[9] In terms of annual operating revenues and expenditures, only six lines break even while the rest have huge losses.[10] Most of the newer lines suffer from low passenger volumes, as many of their stations are located well outside centers of metro areas and without direct local highway nor light rail connections. Officials have used high-speed rail construction primarily to drive up land value for land sales, especially in third and fourth-tier cities, rather than prioritizing convenience and affordability of ordinary travelers.[11] As of the end of 2023, China's HSR system has an accumulated debt of $839 billion due to opaque financing by local governments.[12]
Here are the sources:
If you look at the sources, [9] is from the "libertarian" Reason Foundation which is pro-car and anti-transit, and the editor presented it as an outright fact. [10] is not true (it's also a dead link for an article from WSJ which is questionably framed); more than six lines are profitable to some extent and the "huge losses" are the exception and not the norm.
What is most problematic is [11], which has been thoroughly rebutted here (this person has great English-language coverage of transit in China, please check them out!).
The person doesn't even acknowledge the controversy that each of the these sources have. I wonder if there's an agenda going on, or if the liberal narratives have been repeated so much such that people just unironically believe them.
The problem is not that the HSRs are unprofitable (which is to be expected for public transits), the problem is that the central government does not run deficit spending to finance these large scale infrastructure, so the local governments had to take out loans (with shadow banks before 2015, and direct municipal bond issuance after 2015) to invest in these projects.
And because these public transits companies are not profitable, many of them also double as REITs to extract profit from the land value rise. The most famous being Shenzhen Metro who had been transfusing blood to the dying Vanke, a property developer once hailed as a successful model just 2 years ago as Evergrande was imploding under its hyper-financialized operational structure.
It is a neoliberalized model that shares a lot of similarities to Japan’s. This is why a lot of the local governments are in a massive debt bubble right now as the property prices plunge, a problem made worse by the fact that the People’s Bank of China have seemingly “run out of its tools” after the massive 12 trillion yuan debt resolution policy in November last year.
Read my post here about how all these troubles really started with the 1994 Tax Sharing Reform that forced the local governments to tie their budgets to land finances.