Railway investment in China has accelerated in the second half of the year, with the approval of new railway projects in September hitting a high for the year, but analysts said investment growth would be conservative even though there was room for more capacity.
The National Development and Reform Commission (NDRC), the mainland’s top economic planning agency, approved eight railway links last month involving a total investment of 321.7 billion yuan, the most in any month this year, according to data published on its website.
China Railway sees pickup in projects in second half
Most of the new links will be built in southwestern China and central China.
Transport Ministry official said last month that rail spending this year was likely to exceed the target of 800 billion yuan as the fourth quarter was traditionally the peak season of construction.
“It is believed to hit 800 billion yuan, but hardly surpass 850 billion,” said Gary Wong, an infrastructure analyst at Guotai Junan Securities. “Overall mainland economic growth is still under pressure and the government relies on railway investment for steady growth during 13th Five-Year Plan (2016 to 2020), so it seems it won’t invest aggressively in a single year.”
UBS said in its latest report it also expected railway investment would be maintained at about 850 billion yuan a year during the 2016-2020 period.
