Tibet Rides the Rails; From yak yogurt to appliances and a copper mine, a new Lhasa-to-Beijing line is opening up the economy.

Byline: Melinda Liu

Lhasa is not quite hot enough to have its own stock exchange, not yet. But on the trading floor of the Tibet Securities Company, a large hall where share prices from the Shanghai and Shenzhen stock exchanges roll across giant screens, the action has been heavy since Beijing's much touted railway to Tibet neared completion. Between mid-May and July 1--when the Qinghai-Tibet rail line was inaugurated--trading volume jumped from $1.25 million to nearly $2 million a day. "Business shot up because of the opening of the railway," says director Wang Deqiang. "And now, more and more people are opening new accounts."

What a difference a train makes. The new line has cut transport costs by a third and is expected to bring 4,000 additional visitors to Lhasa each day. That's a shot in the arm for tourism and restaurants; in 2004, Park Hyatt contracted to build Lhasa's first five-star hotel, and a $1,000-a-day luxury train service is slated to start by 2008. But the more subtle effects are what make the new train a big growth-multiplier for Tibet's once cloistered economy. Because more aviation fuel can now be brought into Tibet by rail, for example, all three Chinese airlines flying into Lhasa recently announced new flights to the roof of the world.

Nor are all those trains leaving Lhasa empty. Newly minted businesses plan to export everything from yak yogurt to iron. Construction began in May on a major copper mine at Yulong, which will supply inland China by rail. Since March, shares for Tibet companies listed on the China exchanges have been rising fast: up 200 percent for Tibet Mining, 100 percent for a tourism company called Tibet Holy Land, and 50 percent for appliance firm Wuzhou Development. With falling transport costs expected to cut cement prices by up to a third, shares in the ...