CR has expanded the size of its network by 20.9% in the past five years, to 146,300km, with the high-speed network alone doubling to 37,900km. However, due to the rapid expansion, railway debt increased to Yuan 5.49 trillion ($US 845.5bn) at the end of 2019, or roughly 65% of the value of the Chinese rail network’s total assets, according to the South China Morning Post.
The newspaper reports that CR will aim to increase turnover in 2021, targeting revenue of Yuan 1.18 trillion, up from Yuan 1.13 trillion in 2020. The railway aims to achieve this by encouraging a 43.7% increase in passenger traffic to 3.1 billion journeys per year, and a 3.4% increase in rail freight to 3.7 billion tonnes annually.
The state-owned railway has also vowed to reform its transport schedule to maximise the benefit of its existing network, and to restructure its business operations to boost productivity.
The news follows an announcement by Chinese finance minister, Mr Liu Kun, that the government would prioritise spending on employment, education, social welfare and public health, as part of the country’s plans to combat the economic effects of the coronavirus pandemic, with rail investment expected to fall this year.
China’s pandemic response in 2020 caused a rise in the fiscal deficit ratio to 3.6% in 2020, with government efforts to reduce the level of national debt expected to further cool government enthusiasm for the funding of more rail infrastructure. Annual railway investment dropped to Yuan 781.9bn in 2020, falling below Yuan 800bn for the first time since 2013.
Although no annual investment target has been disclosed yet for 2021, a total of 3700km of line are expected to open this year, compared with 4933km in 2020, alongside fewer new projects. Growth in the size of China’s rail network also slowed to 2% in the first 11 months of 2020, down from 3.8% in 2019 and 19% in 2017.
China’s budget deficit ratio is now expected to fall to around 3% this year, and the quota for local government special purpose bonds, historically primarily used to fund infrastructure projects, is expected to drop from Yuan 3.75 trillion in 2020, to Yuan 3 trillion this year.