Chinese railways encourage private capital investments

Chinese railways encourage private capital investments

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On Monday, August 19, 2013, detailed plans were published by the central government of China to innovate railway funding and to also accelerate railway construction, as the new leadership is committed to deepening reforms. In 2013, the State Council said that railway investment this year is most likely going to exceed the initially-planned amount.

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It is also stated that, for 2013 and the following two years, the central government will be providing transitional subsidies for China Railway Corp, which was established back in March 2013, after a separation of the now-defunct ministry of railways’ government and enterprise functions. Such measures are also expected to strengthen growth in the second largest economy of the world, which slowed down to 7.5 percent during the second quarter of 2013.

It is essential that railway construction accelerates, in an attempt to exceed the plan investments of 2013. Even the building of railways and its related infrastructure has to be prioritized in the western and the less-developed areas of the country. The statement also said that the reform will have new fundraising methods and will encourage private investment in railway construction.

The investment is likely to increase, as the ownership and management rights of intercity, branch and suburban railways will be open to local government and social capital.

Photo Credits: Caixin