China adds 6,800km to rail network to counter economic slowdown
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China adds 6,800km to rail network to counter economic slowdown

CHINA has approved more than US$125 billion worth of rail projects for the coming year, which will see the world’s fourth largest country add almost 7,000 kilometres of track to their network in the next 12 months.

The boost in fiscal spending is aimed at counteracting an economic slowdown in the wake of dropping consumer confidence and a trade war with the United States.

All of the eight urban rail projects, announced by the National Development and Reform Commission, were approved over the month of December and the first week of January as the slowdown started to bite.

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The 6,800 kilometres expected to be added this year is a 40 percent increase from that added in 2018. Included in the plans is 3,200 kilometres of high-speed rail (HSR) – more than the total HSR track operating in Spain, the world’s second-biggest user.

This will add to the existing 29,000 kilometres already in operation in China – that’s two-thirds of the world’s total of high-speed railway lines.


China has one of the longest high speed railway network featuring high speed trains capable of running at 250-350 km/h. Hangzhou, Zhejiang, China, April 11, 2017. Source: By Ye Choh Wah/Shutterstock

The cities of Shanghai and Wuhan will be getting new subway lines this year. And Jiangsu province will build inner-city lines to connect its urban centres.

Beijing slowed on the development of subway lines in an effort to reduce local government debt. According to South China Morning Post, infrastructure construction slowed to 3.7 percent from January to November 2018. That’s down from 20.1 percent a year earlier.

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This approach has changed heading into 2019 after retail spending dropped to its slowest pace in 15 years and investment growth in fixed assets fell to the lowest rate on record, according to Financial Times.

Banking group ING expects China’s ruling Communist party to release CNY4 trillion (US$583 billion) to provide breathing space in their trade confrontation with Washington.

“Though some fiscal money will be used for debt repayment and loan rollovers, the rest will go into infrastructure projects,” Iris Pang, the Dutch bank’s chief China economist, told the Times. “This will support manufacturing activities, even if the trade war continues to escalate.”