China's Great Railway Expansion

Beijing - Two or three times a year, Cargill's joint-venture fertilizer plant in China's remote Yunnan province has to shut down, usually for weeks at a stretch. That's when there aren't any railcars available for shipping its fertilizer to customers across China. Without railcars, the factory's warehouse fills to overflowing, and production has to halt. "There's a huge demand for shipping, but the railroads can only meet 30% of the demand," says Zhang Hong, sales manager of the plant, which shut down yet again in October.

For decades, China has neglected investment in railroads in favor of building highways. With less than 49,000 miles of rails, China has roughly a third of America's track for an area of similar size. The nation's rails carry a quarter of global train cargo and passenger traffic on only 6% of the world's track, making its system the busiest on the planet. "China's strained railroads have already become a bottleneck for the economy," says Yu Tengqun, secretary of the board of state-owned China Railway Group, which has built two-thirds of China's railroad network since 1949.