Research On Price Forming Mechanism Of HSR In China

With the development of high-speed railway in China, people begin to focus on the operational efficiency of HSR. HSR brings people high speed travel experience, convenience and comfort. However, since the high-speed rail lines opened, more and more problems appear these days. Low attendances of HSR made some rail lines even stopped. Some people think they have no choice but to take HSR trains. During the off season, attendance of HSR is very poor. In the peak season, it is difficult to buy a ticket of HSR. The situation caused double welfare loss of consumers and producers. HSR is implemented fixed price in China and HSR company cannot adjust ticket price freely. The price adjustment mechanism lack flexibility and floating range is too narrow which is not conductive to HSR company to participate in the competition. In the meantime, the low-income people cannot afford the existing price, which is not conductive to the social justice.In response to this problem, this paper presents a literature review on price forming mechanism of HSR trains, ordinary trains, and other transportation modes. The review helped me to find the research space about HSR price forming mechanism. There is very little literature proposed a clear viewpoint about the two questions:which price forming mechanism should we implement for HSR in China? Which price floating mode should we take for HSR in China?At the part of theoretical analysis, it uses the public goods theory to analysis product attribute of HSR and it uses Port’s theory to analysis market circumstance of HSR. In the passenger transport market, HSR faces a competitive market environment, air transportation, road transportation and the ordinary rails are the substitution of HSR. At the same time, HSR is a kind of quasi-public goods.At the part of empirical analysis, it analyzes the price forming mechanism and price floating modes abroad. HSR abroad usually implement fluctuating price and has a wide range to float price. It takes ceiling price of HSR in Japan, Taiwan. HSR in France, Spain, and Korea takes limited price. In Italy and German, private railways implement market modulated price, and state railways in Italy take the floating price.At the part of comparative analysis, price forming mechanism of HSR, air transportation and road transportation in China are compared in detail. It mainly implements floating price for air and road transportation. Air transportation takes ceiling price, road transportation takes ceiling price or limited price. After tariff reform, the price forming mechanism of road and air transportation is more flexible and more easy to adapt to the market demands. However, the fixed price of HSR is not conductive to HSR industry to develop continuously.Finally, it combines the passenger features discussion, points out the disadvantages of existing price forming mechanism and there are no conditions to implement market-regulated price in China. We should consider two factors to definite the price forming mechanism in China. One is to enhance the competition ability of HSR services, another is to satisfy the demands of low-income people. We should give more floating space of price of HSR, especially the space to float download. Then the HSR company can reduce the ticket price in off season and attract more passengers to increase revenues. In the meantime, it promotes social justice. Therefore, the paper proposes a conclusion that we should implement fluctuating price in China and take ceiling price or limited price.