Hyperloop Transportation Technologies (HTT) will be building a hyperloop track in the city of Tongren in Guizhou province, the Chinese government has confirmed. The concept of a hyperloop is to bring the speed of an airplane to ground transportation.

HTT has ready signed a commercial contract with the Tongren Transportation & Tourism Investment Group of the People’s Republic of China. According to the agreement, as local media is reporting (in Chinese), the Tongren government and HTT will set up a joint-venture. The two parties agree to respectively offer 50% initial financing to launch to project. The joint-venture will also involve the construction of an industrial hyperloop research park.

Nevertheless, the ultimate goal of the building of the Hyperloop track and industrial park is the commercialization of related services. The contract shows that a track no more than 10 km will be built. The completion of the 10km trial will allow further track extension that will prepare for formal commercial events.

While the cooperation seems straightforward, what’s behind can be complicated.

From HTT’s side, the Chinese government’s generous financing in strategic technology projects, availability of trial venues, and firm top-down authoritarian decisions on tech projects provide convenient conditions for the company to fulfill the hyperloop dream.

Otherwise, hyperloop trials may go through more administrative obstacles in the US.

Additionally, China’s current leading position in high-speed rail may share tech insights to push the project forward.”China leads the world in the amount of high-speed rail constructed by far, and now they are looking for a more efficient high-speed solution in hyperloop,” Bibop Gresta, Chairman of HTT said in a statement.

From the perspective of the Chinese government, a trial project like this may be considered to be another Shenzhen, the frontier of China Reform and open policy initiated by Deng Xiaoping in the late 1970s. Initially a poor fishing town, Shenzhen was seen as a cheap trial venue where failure would cause no significant losses.

Tongren is located in Guizhou province and is surrounded by areas that are stricken with poverty. Though in the same province as Guiyang, China’s new data and tech center, the city still has little competitive power.

According to the contract, HTT will be responsible for providing technology, engineering expertise, and essential equipment. The deal also says the intellectual property of the Hyperloop project belongs to the joint-venture.

Corrected on July 19 to clarify that Hyperloop Transportation Technologies (HTT) is not an asset of Elon Musk’s. 

Runhua Zhao is a technology reporter based in Beijing. Connect with her via email: runhuazhao@technode.com

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