Deep-seated issues plague rail finances

China's official passenger rail fare benchmark has remained unchanged at just over 0.059 yuan ($0.009) per kilometer since October 1995. Many may be shocked to learn that this rate has stood for nearly 20 years, especially given recent price jumps in high-speed service. Indeed, in some cases, it costs more to travel by high-speed rail than by plane.

Yet while the cost of train tickets continues to mount, almost all of China's high-speed rail lines are losing money. Even the country's most popular line - connecting Beijing and Tianjin - continues to post annual net losses of around 700 million yuan.

High construction costs, poorly-priced loan packages and the ever-present specter of corruption have all taken their toll on the financial health of the country's railway system.

Some say China's rail operator should raise fares to shore up loses. Yet, this would just shift the operator's burden onto consumers without addressing its root causes.

To ensure long-term profitability, relevant authorities will have to take hard and decisive steps to promote efficiency and stamp out corruption and other forms of misconduct.