It’s a deal; Xi Jiping and an American businessman

Just like China is being courted by African nations, the super power United States of America is also enthralled by China’s cash and technology  as China moves in to help America build a high speed rail track.

XI JINPING, China’s president , is visiting America this week. He has brought plenty of baggage: the controversy surrounding the manipulation of China’s struggling economy, alleged cyberattacks on American government and businesses, and aggressive construction in contested parts of the South China Sea that has infuriated American allies. One Chinese observer told the New York Times, “Xi is obsessed with strategic rivalry with the United States.”

But in one important area, that obsession seems to be working to America’s benefit. Last week brought news of a big Chinese investment in what could become the first high-speed rail line in America. Construction on a 230-mile line between Los Angeles and Las Vegas will begin as early as next autumn, announced a Chinese Communist Party official. China Railway International USA, a consortium led by China’s national railroad, will provide an initial capital investment of $100m for the line, which will first run from Las Vegas to the town of Victorville, about 80 miles from Los Angeles, and which officials hope will later connect to the city’s downtown.

High-speed rail has many advocates in America. But the country that once thrived on its transcontinental railways has fallen hopelessly behind Europe and Asia following years of disinvestment and closures. The trouble is that the government has demonstrated a stubborn unwillingness to bring the network into the 21st—or even mid-20th—century. In his 2011 State of the Union address, President Obama proclaimed: “Within 25 years, our goal is to give 80% of Americans access to high-speed rail.” But Republican governors of three states slated for big rail projects cancelled those plans and returned the money to the federal government. Jeff Denham, the chairman of the House of Representatives subcommittee in charge of railroads said last year: “High-speed rail can be a good idea; I just think it should be left up to the private sector.” Even states that stand to benefit most from such investment seem ambivalent. Kevin McCarthy, the House Majority Leader, who represents perpetually congested California, told the Wall Street Journal: “I will do all that I can to ensure not one dollar of federal funding goes to boondoggles like California’s high-speed rail.”

China’s high speed train

Enter China. After XpressWest, the firm which had led the Los Angeles-Las Vegas rail project, couldn’t secure a federal loan to build the line, China Railway International USA stepped in. The pair have now set up a joint venture. “It definitely speaks to the fact that our government is dragging their feet,” says Andy Kunz, head of the US High Speed Rail Association.

Mr Kunz is happy to take the money where he can get it. And the American economy will benefit from improved transportation infrastructure, regardless of funding source. Commuters, too, will appreciate the convenience of an 80-minute train ride from Victorville to Las Vegas, considering the drive can take up to four hours. Still, American industry is missing out. No one thinks the investment in the rail line will be a big money spinner for China Railway International USA. “Transportation isn’t supposed to make money,” says Mr Kunz. Instead, China is taking a strategic step to boost its own industry. After investing in more miles of new high-speed rail than any other country in the world, it has developed the engineering know-how to build tracks and trains—which it now hopes to export to overseas markets. The United States is one of more than 20 countries where China aims to build a market for its rail industry.

Right-wing critics in America have long charged that government funding of public transit is akin to socialism. They can’t be much happier to see the funding for a big American rail line coming from—in name, at least—a communist government.

*Reported by The Economist