Massive investments in China’s transportation

Urban railways and airport projects

China is putting its money into urban transportation and air travel. This week, China's top economic planning agency approved 25 urban rail projects with a total of almost $ US 127 billion. Earlier it was decided to dramatically speed up China’s airport investment programme.

According to China’s wire agency Xinhua The National Development and Reform Commission (NDRC) approved project plans and feasibility reports for the 25 projects in cities including Shijiazhuang, Taiyuan, Lanzhou, Guangzhou and Xiamen. The NDRC also approved other projects for roads, sewage treatment centers, waterways and ports.

Subways in 20 more cities

According to the China Association of Metros forty Chinese cities will have subway systems by 2020, bringing the total track length to 7,000 km, 4.3 times the current length. Presently there are already 11 Chinese cities with subways, with 20 more applicants working on their own system. Metro construction is also planned for cities like Changzhou, Datong, Dongguan, Fuzhou, Guiyang, Hefei, Jiaxing, Jinan, Lanzhou, Nanning, Quanzhou, Shijiazhuang, Taiyuan, Xiamen, Xuzhou and Macau.

Economic growth

The massive investments are expected to help stabilize economic growth at home and boost the world economy. China's economy grew by 7.6 percent year on year in the second quarter, its slowest pace in three years. China’s economic situation has great global significance. A slowdown in China's economy is perceived as a great risk, especially for the Asia-Pacific region.

Railroad equipment manufacturers and construction companies will be the major beneficiaries of the approved infrastructure spending. One day after the reports about the NDRC approvals, Chinese stocks rebounded from a record low since February 2009 on the previous trading day. 

The railway infrastructure investments have been stepped up year after year. In 2009, spending of $ US 95 billion on railway infrastructure was part of stimulus that spanned low-cost housing, roads and earthquake reconstruction work. In 2010, rail spending exceeded $ US 100 billion. Last year, the total was $ US 72 billion.

Aviation: 70 additional airports

The massive investments in China’s railways reflect a growth trend in transportation. China’s aviation is growing in a similar rate. An aviation investment program is speeding up this year, as China wants to build 70 additional airports until 2015, compared to 33 in the period between 2006 and 2010. In addition, another 100 existing airports are in the process of being renovated or expanded.

What urban railway and airport investments in China are most needed, in your opinion?

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