Op-Ed: The High-Speed Rail and urbanisation challenges

Analysis by Anbound Research Centre, Malaysia

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The bet is on that Malaysia's HSR will be built by China...

The construction of the new high-speed rail (My HSR) will most likely speed up Malaysia’s process of urbanization and modernization and reshape the regional economic geography.

However, the high-speed rail project will have to deal with unstable economic environments that are undergoing major changes due to the oversaturation of the global market and the plateauing of the Chinese economy.

The researches at Anbound have conducted many studies and analyses on the effects that the high-speed rail will have on rising new cities and they are suggesting that the local governments monitor the scale of development of these new cities and keep it under control while paying attention to the possible loss of resources which the high-speed rail might bring about.

Anbound researchers reckon that the government has overestimated the potential and opportunities of the development of local regions by the high-speed rail.

The government might not have done sufficient homework to understand the available resources and the nature of the industries, thereby (but is still) going ahead with the construction of infrastructures and promote large scale real estate development.

Many changes will be brought about by the high-speed rail, such as changes in the accessibility of the city, changes in the locals’ living conditions, changes in urban development patterns, changes in industrial structures etc, and these changes will have both positive and negative impacts.

The main contributions of the high-speed rail will be the increased flow of people, improved public transportation, and an increased demand for supporting services.

This will form a significant “wealth effect” spurred by the flow of information and capital.

Additionally, the high-speed rail will also shorten the time and distance between cities, thereby increasing the population density in cities while exacerbating the competition between them.

It also promotes the increase of capital, talent, information, and the administrative efficiency of cities. This will consequently lead to the emergence of the ‘siphon effect’ which will begin with the linking of small and medium cities regionally.

As these cities become more connected, they will also experience an increased difficulty to accommodate high-end industries, and finally the high-end talents in these linked cities will be ‘siphoned out’ to other places.

The cities that are linked regionally will also be in constant competition with one another. Cities with a competitive edge such as service capabilities, infrastructures, information exchange, transportation etc, will be able to attract a large numbers of businesses and institutions and continue to prosper while those that aren’t as competitive will be left behind.

Limitation of resources

In order for these rising cities to obtain the resources required for their development, they will need to compete with one another.

Through their competitive advantages and reallocation of resources, they will have added advantages when it comes to their development.

However, as all resources are scarce, only the competitive cities will be able to get them.

Talent, especially high-end talent, will concentrate in these competitive cities, while other cities that are not as competitive will suffer from the loss of high-end talents and the development of their high-end industries.

Therefore, the high-speed rail cities should develop rational development strategies in accordance with their own development potential. The rising township should place the flow of people, logistics, capital, technology and information, as the centre of its layout and construction.

They can then combine their strength with that of the high-speed railway station to implement full-fledged development strategies in order to attract enterprises and institutions.

As Rome was not built in a day, the construction of the high-speed rail will be a long and complicated process.