China’s railway spending plummets as Beijing struggles to sustain momentum

Railway spending in August plunged 27.1 per cent following a decade-long building spree which has given China two-thirds of the world’s high-speed rail tracks

Railway fixed-asset investment was 449.6 billion yuan (US$63 billion) in the first eight months of 2019, a modest 2.5 per cent fall from the same period last year

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China is struggling to maintain momentum in its railway infrastructure programme, after a decade-long building spree. Photo: Xinhua

Published: 9:28am, 19 Sep 2019Updated: 9:28am, 19 Sep 2019

China’s spending on railways, a key driver for growth in the last decade, tumbled in August – in part because all major towns are now covered by the country’s extensive railway network.

China’s economic planning agency said on Wednesday that railway fixed-asset investment was 449.6 billion yuan (US$63 billion) in the first eight months of this year, which marked a modest 2.5 per cent fall from the same period last year.

However, August alone marked a steep fall of 27.1 per cent compared to the same month in 2018, according to calculations by the South China Morning Post, based on the official data.

The abrupt fall in railway investment – which is part of a deceleration in China’s overall capital spending – follows a decade-long building spree which has given China two-thirds of the world’s high-speed rail tracks, leaving less room for future development.

Meng Wei, a spokeswoman for the National Development and Reform Commission (NDRC), said that China was on schedule to achieve its whole-year target of 800 billion yuan (US$113 billion) in spending on railways. She added there was now an issue of whether China could find enough new railway projects when existing ones were completed.

Meng said the agency had in July approved a number of new railway lines, including the second part of a line from Zhengzhou to Jinan with an investment budget of 40.9 billion yuan (US$5.7 billion), as well as a line from Heze to Lankao with an investment budget of 10.9 billion yuan.

She said the agency had also approved a feasibility report into a 700km high-speed railway line connecting Chongqing and Kunming, which would cost 141.6 billion yuan (US$20 billion).