Going home for the Chinese New Year is the most important trip for Chinese people in a year. No matter how far the road is, everybody wants to go home for the Chinese New Year to spend their time with families and enjoy the holiday together. But not everyone can have the opportunity to go home since it is hard for them to buy the train tickets or high-speed rail tickets during the Chinese new year peak period. Famous actor Wu Jing made a speech on his Weibo: As long as you can go home, sit anywhere. Below his words, there is a picture of himself sitting in the train’s corridor. This kind of situation has made us start to wonder what makes people have trouble in getting train tickets during the Spring Festival. Is it because of the shortage of railway supply? Can the flexible train fares solve the problem? What can the government do?
It is reasonable to believe that the shortage of railway supply will increase the difficulty of ticket purchase. Before the Spring Festival, the passenger flow is concentrated in a short period of time, that is to say, the earlier half of the Chunyun starts from January 28th to February 4th. As the Spring Festival draws to a close, the country’s railways begin to have an extra busy time between February 8th and February 18th. The overall Spring Festival travel season is nearly 20 days. 4787 pairs and 4,860 pairs of trains are scheduled to be operated every day before and after the Spring Festival, and 413 million passengers are expected to be sent. But compared to the overall demand of nearly 3 billion passengers, the limitation of the railway transportation capacity will increase the difficulty of the train tickets purchase.
From April 28th 2018, the China railway administration proposed that the railway department will reduce the fares of 28 G-series high-speed trains during the off-season. In the future, the fare will be flexibly floated according to the market supply and demand situation, and the “one-day price” will be gradually implemented. It is acknowledged that under the market economy and free competition conditions, commodity prices will not be static. The floating price system can solve the problem of ticket purchase since increasing the ticket price will reduce the ticket demand. Reasonable as the opinion sounds, it can not bear much analysis. According to the report of the World Central Bank, the poverty headcount ratio of China at 5.5$ a day (2011 PPP) is around 27%. For these people, their annual income is less than 8,000 RMB. Most of them are rural population and struggling on the edge of the poverty line. In order to survive, many people go to big cities as migrant workers. The increase of train tickets price during the Chinese New Year will make it impossible for them to go home. Therefore, if all train tickets are raised due to high demand, it will lead to social instability. Market-based fares may solve the problem of difficulty in buying tickets during Spring Festival in the short term, but in the long run, it is not conducive to the harmony and stability of the whole society. As economists, we can’t just consider the interests of some people that only the rich people can get train tickets. What we can do is to treat the normal-speed train and the high-speed rail differently. That is to say, on the one hand, try to maintain the price of the normal-speed train, and on the other hand let the high-speed rail fares fluctuate with the changes in ticket demand so that passengers can choose their own way to go home according to their own needs and economic conditions.
Nowadays, what the government can do is to increase the supply of railways and reduce unreasonable controls on the bus and aviation sectors, so that other transportation departments can work with the railway sector to relieve the tension of the Chunyun.
Firstly, during the Spring Festival, the operational capacity of the train has reached its maximum. In order to meet the huge demand, the government can build some new railway lines. But this operation requires a lot of financial support since building new railway is costly.
Secondly, the high tolls, high gas price and unreasonable controls for bus company cause the bus fares to increase which will reduce the demand of the bus tickets and may cause a further increase in demand for railway tickets. In China, the highways charge road tolls of 5 yuan per kilometer. Take Sichuan to Dongguan as an example, the whole journey is around 1,500 kilometers, then each passenger will need to pay a highway toll fee of 166 yuan. Furthermore, China’s highway tolls do not include fuel taxes. The fuel tax is added to the fuel fee. For example, the fuel price is 6 yuan per liter and 1500 kilometers requires about 450 liters of gasoline, so the fuel cost for each person is 60 yuan. At last the cost price of the bus company (excluding labour cost and others) is 226 yuan per passenger. What’s more, China’s bus transport market is under controls that government do not allow private companies to open bus lines without authorization, thus increasing control costs which are ultimately borne by passengers. Reducing bus controls can reduce management costs and allow fares to fall, at the same time, the reduction in regulations will allow bus companies to change line settings at any time based on market changes. To that end, during the Spring Festival, the bus company can always open new lines in time to meet the additional needs with lower prices.
Similarly, the air traffic control also raises the price of plane tickets. According to the control policy, airlines need government approval to open new routes, and the existing routes have operating time limits. If the government let the airlines which meet the requirement have contact with the airport to operate the new route without the need for government approval, the supply of the aircraft line will increase and the price of the air ticket will reduce, thus the pressure on the railway operations will further reduce.
Overall, by reducing the control of bus company and civil aviation, redesigning the entire transportation market will increase the overall transportation capacity to meet the huge transport demand, and alleviate the operational pressure on the railway.
In the end, one of the most important reason why the Spring Festival is called “the largest-scale periodic migration of human beings” is that the uneven development between urban and rural area, which is an economic problem that every developing country will face. However, we believe that with the development of the entire economy and the support from the government, the transportation problem during the Spring Festival will be resolved gradually.
Authors: LIU,Siyu 20566141; ZHOU,Xiaoying 20565159
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