Bonds May 23

China rail construction spending to rise by 100 bn yuan

China National Railway Group will have more than 1.8 trillion yuan (US$252.44 billion) available for high-speed rail projects

China rail construction to rise by 100 bn yuan
China National Railway will get a further 100 billion yuan for high-speed rail projects. File pic by AFP.

(ATF) The 2020 budget report submitted to the National People's Congress on May 22 showed that the central government injected 50 billion yuan into the China National Railway Group, and supported the issuance of 50 billion yuan in railway construction bonds for additional funding – to drive the construction of high-speed rail projects.

This initiative aims is to expand effective investment as downward pressure on the economy is increasing. Infrastructure investment is the main measure for counter-cyclical adjustment, while railway investment accounts for a large proportion of this, according to a report by the 21st Century Business Herald.

Data from the National Bureau of Statistics show that infrastructure investment (excluding electricity, heat, gas and water production and supply) fell 11.8% year-on-year in January-April, with a decline of 7.9% from January to March. Investment on the railway transportation sector decreased by 16.1%, and the decline narrowed by 12.5%.

Industrial and commercial registration information shows that on March 14, 2013, the Ministry of Railways revoked the separation of the railways from the government and established the China Railway Corporation.

On December 5, 2018, China Railway Corporation won approval for the company's corporate name, which was changed to "China National Railway Group Co Ltd".

Currently, the company's registered capital is (RMB) 1.739.5 trillion yuan. Railway passenger and freight transportation is its main business, along with other diversified operations. 

After increasing the registered capital by 100 billion yuan, it will have 1.8395 trillion yuan for ongoing projects.