China’s railway construction boom looks set to continue in 2013. The government plans to invest 650 billion yuan, or 103 billion U.S. dollars in railway construction this year, up slightly from the 630 billion yuan spent in 2012.
To fund the expansion, the Ministry of Railways will diversify financing channels by encouraging local governments, companies and private investors to participate. A national railway development fund will also be set up as an investment platform for social and private capital.
Analysts say continued investment in the railway system is necessary for continued growth. But this comes at a cost - China’s railways ministry is one of the biggest borrowers in the country, with debt of some 300 billion U.S. dollars at the end of 2012.
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