Market-creating states: rethinking China’s high-speed rail development

Abstract

Abstract Railway development holds special importance in every major industrialized country. Despite its significance, the wholesale modernization of China’s railway sector only began after the mid-2000s. Against this backdrop, this paper poses three research questions: First, why did China’s high-speed railway (HSR) revolution start in the mid-2000s? Second, which domestic and international factors most decisively shaped the rapid development of China’s HSR industry? Third, can other states replicate the Chinese model? This paper advances the perspective of ‘market-creating states’. Through administrative centralization, the Chinese state created a national HSR market in which state-owned firms and sub- national governments collaborated with the central government to pursue rapid development. In doing so, the Chinese state successfully leapfrogged into the age of HSR, fostered indigenous innovation, and escaped dependency. High-speed rail development serves as a fruitful starting point for understanding the role of a ‘market-creating state’ in managing development in a globalized economy.