Only 70km/h Top Speed: China's High-Speed Rail System Collapses, 94% Operating at a Loss!

Designed for 300 kilometers per hour, but limited to just 70. China's tofu-dreg high-speed rail collapse. Structural decay, 94% of lines losing money. Huawei car disaster, 500 kilometers promised, but only 100 in reality. Smart driving triggers. Fatal accidents, government report removed. China's EUV leap, lie exposed. China is at least eight generations behind. Ambition for global tech dominance is pure illusion. Only lies left in China's real estate. Fake McDonald's, Starbucks, LV built to deceive. What's even real in this country anymore? China's abalone prices collapse, from luxury seafood to a symbol of economic exhaustion. You're watching Decoding China, where we bring you timely analysis and grounded perspectives on today's China. Designed for 300 kilometers per hour, but limited to just 70. China's tofu-dreg high-speed rail collapse. Structural decay, 94% of lines losing money. China has officially surpassed the 50,000-kilometer mark, roughly 31,000 miles, in high-speed rail, controlling close to two-thirds of the world's total high-speed track length. For more than two decades, this network has been promoted as the ultimate symbol of the China speed miracle, driving economic growth and showcasing the rise of a new superpower. Yet behind this polished facade, a far more fragile reality has steadily emerged. The system has been corroded by corruption, turning many lines into death traps on rails. Those risks are becoming increasingly visible through what is widely known as the tofu-dreg phenomenon. The decay begins at the most fundamental level, the concrete used in ballastless tracks designed to support trains traveling at 350 kilometers per hour. Investigations have revealed that high-grade fly ash, a critical component needed to ensure dense and durable concrete, was systematically replaced by low-quality, unprocessed waste so contractors could widen their profit margins. Professor Wang Lan of the Cement and New Building Materials Research Institute has acknowledged that, given weak quality control on the mainland, the use of substandard materials in high-speed rail construction was almost inevitable. A 2021 on-site survey led by the China State Railway Group itself confirmed that after just a decade of operation, the network is already suffering from deep-seated structural decay. None of the main ballastless track designs, from CRTS-1 to the domestically developed CRTS-3, has been spared. Cracking slabs, debonded layers, and systemic defects have appeared across the system. Crucially, these findings did not come from foreign critics, but from China's own internal audits, released in a rare moment of transparency. Negligence has extended into the tunnels of critical corridors as well. State media reported that on the Guizhou section of the Shanghai Kunming high-speed railway, tunnels that had been in service for less than a year were found to have concrete linings built thinner than design specifications, with gaps left unfilled between the lining and the surrounding rock. These shortcuts led to severe groundwater leakage and heightened rockfall risks, forcing trains designed to run at 300 km per hour to slow to just 70 km per hour, a speed that completely undermines the economic logic of high-speed rail. Beyond visible cracks, an even more dangerous threat lies beneath the tracks themselves. Many of China's most important lines run through the North China Plain, a region experiencing severe land subsidence caused by decades of excessive groundwater extraction. Satellite monitoring shows that sections of the Beijing-Tianjin intercity railway are sinking at rates that have historically exceeded 100 mm per year in some areas, though mitigation efforts have slowed this in recent years. At speeds of 350 km per hour, even slight differential settlement between pillars can warp track geometry, pushing safety margins to their limits and raising the risk of derailment. At the same time, the financial burden has become structurally unsustainable. As China's real estate market collapsed and local governments slid into fiscal crisis, Beijing poured hundreds of billions into new high-speed rail projects, operating on the assumption that future growth would eventually pay the bill. However, this illusion has collapsed. By the end of 2024, the total liabilities of the China State Railway Group had climbed to roughly about US$860-890 billion, with some estimates nearing US$885 billion or higher, when including related obligations. The scale of this debt is so large that experts now describe it as a grey rhino, a massive high-probability crisis that can no longer be ignored. Only about 5-6% of the entire system, mainly the core trunklines linking major coastal cities such as Beijing, Shanghai, and Guangzhou, generates enough revenue to cover its own costs. The remaining 94% operates at a heavy loss, functioning as vast financial black holes. Each year, interest payments alone consume tens of billions of dollars, while maintenance costs for aging and often poorly built infrastructure continue to surge. The roots of this failure lie not only in economics, but deep within China's political system. Many high-speed rail projects were never designed to be profitable. They were pushed forward by local officials eager to boost their political resumes and inflate regional GDP figures, regardless of actual passenger demand. The result is a sprawling network built on distorted incentives, burdened by chronic financial inefficiency and severe engineering risks. By 2026, experts say the system has entered a Ponzi-like dynamic, borrowing new principles simply to pay interest on old debt. Official claims of profitability in 2024, once examined closely, rely heavily on state subsidies masked through creative accounting. Fare hikes of 20-40% during 2024 and 2025 failed to solve the problem. Instead, they drove low-income travelers and migrant workers away from high-speed rail and back to slower conventional trains and intercity buses. Finally, the true cost of the Chinese Communist Party's Great Leap Forward-style rapid development is coming into focus. Crumbling tofu dreg concrete, sinking high-speed rail tracks, and a mountain of unpayable debt. As the era of mindless expansion slams into a wall, it leaves behind a landscape of empty stations and a financial grey rhino — a massive, obvious risk that can no longer be ignored. If the world's largest infrastructure miracle can begin to buckle under its own weight, what does that say about the sustainability of the CCP model itself? Huawei car disaster. 500 kilometers promised. But only 100 in reality. Smart driving triggers. Fatal accidents. Government report removed. One car owner lamented, Huawei, come and take a look at your car. It's only been driven a little over 20,000 kilometers. Look at this. There is no real leather interior as promised. I don't even dare to touch it. Just a small scratch and it's ruined. Look at the seats. They're all cracked. And this car is only one year old. Other cars last 10 years without problems like this, don't they? This furious video is not an isolated case. It is the desperate cry of a growing number of Huawei car owners across China. According to multiple users, vehicles advertised with a 500-kilometer driving range can barely travel about 100 kilometers on a full charge. Some owners report that every 1% of battery power delivers only 1 kilometer of range, numbers completely disconnected from Huawei's official specifications. On Chinese social media, many users now openly state that Tesla is one of the few electric vehicles in China still worth buying. The problem, they argue, is not limited to Huawei alone, but reflects a broader pattern. When a corporation accumulates excessive power over media narratives, legal mechanisms, and administrative influence, the consumer inevitably becomes the victim. Another female Huawei car owner ignited nationwide outrage on January 7th when she broke down in tears during a Douyin livestream. She said she purchased a Stiletto S9 through the Harmony Intelligent Mobility Alliance in July 2025 for 430,000 yuan, approximately 62,000 US dollars. Just two months later, the car malfunctioned. Huawei diagnosed the problem as a faulty internal connector and demanded 28,000 yuan for replacement. What enraged her was not just the price, but months of stonewalling, unanswered calls, repeated visits to 4S stores where responsibility was endlessly shifted, and finally being blamed for water intrusion. She strongly refuted this claim, showing that the connector was buried deep inside the center console with no signs of water damage whatsoever. The irony is striking. At previous auto shows, Huawei executives publicly demonstrated their vehicle's so-called comprehensive waterproof design, boasting that pouring dozens of bottles of water onto the seats would cause no damage. Yet once a real failure occurred, the promotional rhetoric vanished, replaced by accusations against the user and legal intimidation. The owner revealed that Huawei's legal department demanded she stop livestreaming and remove her videos. Beyond quality and after-sales service, Huawei's much-touted, industry-leading intelligent driving system is now at the center of growing alarm. Numerous videos show Huawei vehicles speeding through intersections, running red lights at over 90 kilometers per hour, taking wrong exits into dead-end roads, and narrowly avoiding collisions only because drivers slammed on the brakes in time. Yet almost immediately, comment sections filled with accounts defending Huawei, claiming the videos were staged, manually set, or not real smart driving mode. Another owner confirmed the danger. During a Huawei test drive, the vehicle aggressively accelerated to catch a green light. When questioned, the salesperson proudly explained that the system calculated remaining seconds and decided to speed through, calling this proof that Huawei's technology was leading the industry. The owner later mocked the logic. If something goes wrong, it's the driver's fault. If nothing happens, it's Huawei's credit. The controversy reached a climax with a serious accident on December 22, 2024. A Huawei M7 traveling at 115 kilometers per hour crashed into a cement pump truck on a highway. The driver, Qin Feng, a professional race car driver and former Huawei spokesperson, suffered a fractured spine and multiple injuries. Huawei claimed its AEB system reduced speed to 64 kilometers per hour before impact. But Qin Feng insisted he felt no deceleration at all. Subsequent compensation negotiations further inflamed public anger. Despite repeated reductions in demands by the victim, Huawei ultimately offered only a few thousand yuan and several mobile phones, without accepting any responsibility. Another tragedy followed. In 2024, a Huawei M5 was involved in a deadly accident in Rumqi that killed four elderly landscaping workers. An official investigation report was published in May 2025, only to disappear from the government's website overnight. Netizens immediately questioned who had the authority to remove a fatal accident report from an official platform. This is just the tip of the iceberg regarding the countless accidents caused by low-quality electric vehicles in China. In response to mounting criticism, Huawei announced future OTA updates to improve safety systems. But for many Chinese consumers, trust has already collapsed. They are beginning to realize that Huawei's so-called industry leadership exists primarily in advertising slogans. When accidents happen, what follows is silence, deflection, and cold indifference. As some netizens sarcastically put it, Huawei may lead the industry in marketing. But when it comes to after-sales service and accountability, it leads in inhumanity. Chinese consumers are slowly seeing the true face of Huawei. And more broadly, a system where propaganda, control, and power outweigh human life. The so-called smart tax they pay is not just financial, but paid with humiliation, suffering, and shattered trust. And this time, more people are truly waking up. China's EUV Leap Lie Exposed China is at least eight generations behind. Ambition for global tech dominance is pure illusion. A report spread widely across Chinese media claimed that Beijing had successfully developed its own EUV lithography machine, the technology widely regarded as the pinnacle of power in the global chipmaking chain. For those who understand what EUV really is, the instinctive reaction was not excitement, but to look toward ASML, the only company in the world that truly masters this technology. When ASML spoke, its CEO Christophe Fouquet did not need many words. He said the claims had no factual basis and that by ASML's assessment, China is at least eight generations behind in EUV technology. Eight generations amount to nearly a decade left behind. EUV uses ultra-short ultraviolet light at a wavelength of 13.5 nanometers to draw extremely fine circuits on two silicon wafers. It is the decisive step that determines whether a country can manufacture 7-nanometer, 5-nanometer, or 2-nanometer chips. Without EUV, advanced process nodes exist only on paper. And to this day, only ASML has been able to build such machines at industrial production scale. Another detail was repeated. China has been unable to access EUV equipment for eight years. ASML brought EUV into mass production and then moved on to high-end AEUV, pushing lithography precision down to 0.5 nanometers. The gap did not pause. It kept widening. EUV is not about simply having a machine. Power lies in equipment access rights. Who is allowed to operate it, maintain it, upgrade it, and gain access to the light source, core components, and technical data? Without those rights, a machine is just a 180-ton block of metal, made up of more than 100,000 parts, priced at around $400 million. Expensive, but functionally useless for real manufacturing capability. That is why TSMC, Intel, and Samsung have remained tightly bound to ASML for years. Not because they lack expertise, but because EUV is a closed ecosystem. ASML controls its rhythm. And no one enters that ecosystem by watching from the outside. Against this backdrop, the reality in China is difficult to ignore. SMIC, the country's largest chip foundry, has yet to achieve stable mass production at the 7-nanometer node. The acknowledged yield rate remains below 40 percent. Claims of 5-nanometer or even 3-nanometer capability coexist with that figure, without explanation or reconciliation. If EUV had truly succeeded, 7 nanometers would not still be a problem. The reality is that China does not have EUV. It is forced to rely on DUV, a far older technology, combined with multiple patterning techniques. The price is rapidly rising costs and sharply falling yields. Even in DUV, China has not mastered the complete machine building technology, remaining largely at the level of fabrication, assembly, and operation. An incident in October 2025 exposed this limit. A DUV machine from ASML operating in China malfunctioned. When ASML technicians arrived to inspect it, they discovered the machine had been unauthorizedly dismantled, not for routine repair, but to probe its internal structure. The result was predictable. The machine was reassembled incorrectly and damaged. Because this action violated equipment access rights, ASML had sufficient grounds to refuse further maintenance. The machine was shut down. Just one month earlier, the Financial Times had reported that China was testing a domestically produced immersion DUV system. Subsequent technical analyses showed that it was equivalent to ASML's twin scan NXT1950i, a model introduced in 2008. By September 2025, China announces a domestic DUV system of comparable level. October 2025, an ASML DUV machine is dismantled and damaged. December 2025, AUV is declared successfully developed. Some industry analyses suggest that China may have assembled a DUV-based system, using core components salvaged from second-hand ASML machines, along with some form of limited DUV access rights. Once presented publicly, the system was given a different name. Technically, it was not EUV. ASML did not publicly expose every detail. China still operates a large number of older DUV machines, particularly for 28-nanometer production, and ASML continues to maintain business ties there, including equipment servicing. Even so, the technical message sent outward was unambiguous. China remains far from EUV. Looking back at the entire episode, there is nothing mysterious about it. It is not a lack of money. It is not a lack of ambition. What China does not have, and cannot manufacture on its own, is genuine equipment access rights. In the world of EUV, that is the true line that separates capability from illusion. Without crossing it, every proclaimed breakthrough exists only in headlines, until the numbers themselves force silence. Only lies left in China's real estate. Fake McDonald's, Starbucks, LV built to deceive. What's even real in this country anymore? This developer went as far as building a fake McDonald's to sell apartments. All of them are photos taken from McDonald's locations overseas. Foreign layouts, foreign text, foreign menus. They are not local Big Macs or Filet-O-Fish. These images were used to create the illusion of a lively commercial area. In reality, it was nothing more than a carefully constructed stage set. In China, McDonald's represents far more than fast food. It is widely seen as a symbol of a mature commercial zone. Foot traffic, consumption, and future appreciation. For many homebuyers, the presence of a McDonald's functions almost like a guarantee of value. Developers understand this psychology perfectly. In many places, fake branded stores began appearing in large numbers. IKEA lookalikes, Muji imitations, Google standing in for Gucci, Cartier replacing Cartier. Every detail is designed to mislead at first glance. One man shared that, due to severe nearsightedness, he walked past an empty office building and saw what looked like a brightly lit 7-Eleven with neatly arranged shelves. He approached, intending to buy a drink, only to discover it was a large photograph pasted onto the glass. The store did not exist, but the illusion was convincing enough to deceive passers-by. The deception did not stop at fake stores. Some developers went further, constructing fake subway stations. In Shenzhen, a metro station sign was placed directly in front of a sales office. It looked identical to official signage, complete with two metro lines and a station name. At first glance, it appeared entirely legitimate. Later, it was revealed that one of the lines had never been approved and had not even begun construction. After media exposure, it was removed. But the question remained, how many buyers had already been misled before the truth came out? Why would developers dare to do this? On the surface, it is clear fraud. But the deeper cause lies in the severe crisis facing China's real estate market. Official data show that in 2025, the nationwide sales area of commercial housing fell 8.7 percent, total sales value dropped 12.6 percent, and real estate development investment declined 17.2 percent. More strikingly, new housing starts fell by 20.4 percent, indicating that developers are not merely unwilling, but increasingly unable, to launch new projects. In China, land finance is not a theory. It is a survival mechanism. Before 2025, land sales accounted for 40 percent or more of local government revenue in many regions, especially where population growth was weak and industrial capacity limited. When land sells, budgets function. When land does not sell, finances tighten across the entire system. The elements that genuinely create property value, population growth, industrial jobs, schools, hospitals, and transportation infrastructure, take years to develop and depend heavily on government resources. Developers cannot produce them quickly, but they can produce the appearance of them within weeks. Many obvious violations were quietly tolerated under a wait-and-see attitude. The most absurd part is this. On one hand, officials promote people-centered slogans. On the other, blatant deception goes unaddressed. When forced to choose, priorities shift toward GDP figures, fiscal revenue, and debt pressure, while the interests of ordinary homebuyers fall to the bottom. The problem does not stop with real estate. It has spread into consumer markets. Fake coffee shops using green mermaid logos, identical cups, packaging, and drinks designed to resemble branded products. Only by closely examining the store name do customers realize it is not Starbucks. Another shopper described buying clothing from a store called Champion Moment, where the logo was altered just enough to seem like a new design. He convinced himself it was an update, until checking and discovering it was counterfeit. Commentators argue this is a crisis of social trust. Modern society relies on basic assumptions. That public signs can be trusted, brand boundaries exist, and commerce operates with minimal honesty. When these assumptions are repeatedly violated, the damage extends beyond money. Moral standards begin to erode. When honest people see themselves falling behind while rule-breakers profit with minimal consequences, wrongdoing begins to feel acceptable, as long as it is not punished. Over time, dishonesty becomes normalized. That is the deepest damage to social trust within the system. It does not openly encourage deception. But through persistent indifference and selective enforcement, deceit gradually becomes ordinary and accepted. China's abalone prices collapse. From luxury seafood to a symbol of economic exhaustion, abalone prices in China have collapsed. What once sold for 200 yuan per pound, about 28 US dollars, is now going for as little as 30 yuan, around 4 US dollars. According to a representative from the Northern Hankou Fishermen's Association in Wuhan, commonly traded varieties such as 12-head and 10-head abalone are now priced around 30 yuan per pound. At first glance, this collapse is being framed as the natural result of technological progress and expanded production. But behind the numbers lies a far more troubling reality. A systemic breakdown that exposes the true nature of the Chinese Communist Party's economic model. Administrative orders replacing markets, propaganda masking losses, and grassroots producers paying the price to sustain the illusion of growth. Over the past two years, nearly all abalone farmers have been bleeding money. Prices continue to fall, while the costs of seedlings, feed, electricity, labor, and transport keep climbing. Many farmers say they have stopped calculating profits altogether. Their only goal now is to survive one more production cycle. Under industry standards, a six-layer farming cage requires a survival rate of at least 50 to 60 percent just to break even. Yet in parts of Fujian, survival rates have plunged to as low as 5 to 7 percent. This is not simply a matter of bad luck or natural fluctuation. It is the direct consequence of high-density farming models, aggressively pushed by policy directives and capital, with little regard for environmental limits or human cost. As seawater temperatures rise, farmers have been forced to move abalone northward to Shandong or Liaoning in a desperate attempt to escape mass die-offs. But this so-called northward shift offers no real solution. It merely transfers pressure from southern waters to northern ones, deepening oversupply and spreading the crisis across regions. Another major issue is that abalone output has surged more than a thousandfold in just two decades, while consumer purchasing power has steadily eroded under falling incomes, rising unemployment, and shrinking household wealth. At the same time, trust in government subsidies has completely collapsed. On paper, authorities promise support for farmers. In reality, subsidy programs are designed around large-scale operations, smart fisheries, and showcase projects. Conditions that exclude nearly all small and mid-sized farmers who shoulder the real risks. Audit reports reveal that billions of yuan in agricultural subsidies, equivalent to hundreds of millions of U.S. dollars, never reached farmers at all. Instead, the funds flowed to politically connected enterprises, image-building projects, or were siphoned off through inflated reports, fake identities, and forged signatures. What was meant to be emergency relief has turned into a tool for rent-seeking and insider enrichment. After years of losses, many farmers have mortgaged everything they own, sometimes even their aquaculture products themselves, just to stay afloat. When banks tighten credit, they are pushed out immediately. The pattern is painfully familiar. Success is claimed collectively in propaganda, while failure is dumped entirely on individuals at the bottom. Cheap abalone is not a sign of consumer prosperity. It is a symptom of deflation, collapsing domestic demand, and deepening inequality. As real estate continues to slide, youth unemployment remains high, and local governments run out of money. Even luxury goods are forced into mass market prices. Abalone is only one example. The deeper story is this. An outdated system is exhausting itself. Production is endlessly expanded to preserve the image of growth, while ordinary people are left to absorb the damage. We'd love to hear your perspective. Leave a comment below and share your thoughts. If you found this video helpful, please share it with your friends. Your support keeps us going and inspires us to deliver even better content. Don't forget to like and subscribe for more in-depth analysis from Decoding China. Thank you for watching!