Railway Industry seen as China’s Next Major Economic Driver

Railway Industry seen as China’s Next Major Economic Driver

Beijing: Urban development and the development of city clusters bolstered by the construction of high-speed railway and subway lines is expected to lay the foundation for a second economic take off in China, reports the Shanghai-based China Business News, citing a transportation official.

Construction of railway systems will play an even bigger role than the property market in China’s economy as the country will need to build more than the 6,000 kilometers of rail networks under its 12th Five Year Economic Development Plan, said Wang Ming, director of the Institute of Comprehensive Transportation under the National Development and Reform Commission (NDRC).

To date, 39 cities around the country have met the stipulated criteria for subway construction and by 2020, China’s total subway network will extend to 6,000 km, while an estimated 4 trillion yuan (US$625 billion) will be invested in urban subway construction, Wang said at a recent transport forum.

The railway construction market is estimated at 10 trillion yuan (US$1.57 trillion), according to Wang.

With the acceleration of urbanization, urban transit systems will be a natural solution to traffic congestion, not only in first-tier cities but also in second- and third-tier cities, said Li Guoyong, an NDRC official.

The urbanization rate is expected to exceed 60% by 2020 and the number of cities with a population of more than 1 million will rise to more than 200 during that period, the official said.

Therefore, the government will speed up construction of the railway systems in cities to improve urban traffic flow, said Li Puming, a spokesperson at the NDRC.

Investment in urban rail transit this year is expected to reach 300 billion yuan (US$47 billion), exceeding last year’s 285.7 billion yuan (US$45 billion), Li Puming added. The criteria that qualify cities for an urban transit system include a population of over 3 million and a GDP of more than 100 billion yuan (US$15.7 billion), according to the guidelines on the development of urban rapid rail transit systems, which were issued by the State Council in 2003.