China approves 25 new urban rail projects

China announces big investments in urban rail.
Written by Tyler Falk, Contributor

In a bid to turn around declining economic growth, China's National Development and Reform Commission approved 25 new urban and intercity rail projects earlier this week.

China plans to investment about $127 billion into these projects, which will take between three and eight years to complete -- an impressive turnaround. Among the cities getting new or upgraded rail systems are Shijiazhuang, Taiyuan, Lanzhou, Guangzhou and Xiamen, according to state media outlet Xinhua.

By 2020, China is expected to have 40 cities with subway systems that will stretch a total of more than 4,300 miles -- over four times more than the current total.

With China's economic growth rate at a three-year low of 7.6 percent, the government is making a big push to increase investment, especially in cities and infrastructure projects. Earlier this year, a number of major Chinese cities announce massive stimulus plans to jumpstart various industries and improve infrastructure.

But some experts are warning local Chinese governments to be extra cautious with expensive infrastructure investments. China Daily reports:

Sun Lijian, a senior economist at Fudan University in Shanghai, said infrastructure construction costs are high, so local governments must carefully analyze the yield on their investment.

"If the upgraded infrastructure and environment cannot attract more investment and tax revenue from enterprises, the investment is likely to turn into bad debt," Sun said.

Photo: Flickr/dcmaster

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