China’s railway investment loses steam as government turns from debt-fuelled building boom

China’s state railway company has vowed to improve the efficiency of its existing railway network this year, rather than continue expanding track mileage

Railway investment is expected to fall in 2021 as the government focuses on employment, education, social welfare and public health following the pandemic

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Railway investment is expected to fall this year as the government focuses on employment, education, social welfare and public health following the pandemic. Photo: Xinhua

Published: 6:15am, 12 Jan 2021Updated: 10:41am, 12 Jan 2021

China’s railway authority will prioritise restructuring its operations to enhance efficiency and revenue this year, rather than continuing to expand track mileage, in the latest example of Beijing moving away from debt-fuelled growth.

Annual railway investment, which often reflects government enthusiasm for infrastructure investment, dropped to 781.9 billion yuan (US$120.7 billion) last year, falling below 800 billion yuan for the first time since 2013, according to data released at the annual China State Railway Group conference last week.

No annual investment target has been disclosed for 2021, but the planned launch of 3,700km of rail lines this year compared with 4,933km last year, fewer new projects, and changing government spending priorities signal a further decline in the coming years.

Instead, the state railway company vowed last week to reform its transport schedule to maximise the benefits of its massive existing rail network and restructure its businesses to boost productivity.

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The company is targeting 1.177 trillion yuan of revenue this year, an increase from 1.13 trillion yuan last year, based on a 43.7 per cent rise in passenger traffic to 3.1 billion, and a 3.4 per cent increase in cargo deliveries to 3.7 billion tonnes.