China announces $721bn transport action plan

The three-year programme includes 303 projects covering railways, highways, waterways, airports and urban transit.

China’s main reform body and Ministry of Transport have jointly announced a three-year plan that could see them inject as much as CNY4.7 trillion ($721 billion; €636 billion) into the country’s transport infrastructure. 

Sectors covered by the programme, which involves 303 projects, comprise railways, highways, waterways, airports and urban rail. The plan aims to launch 131 projects this year, 92 projects in 2017 and 80 projects in 2018, according to local reports.

More specifically, the country intends to invest CNY2 trillion in 86 projects seeking to build or rebuild about 20,000km of train lines. 

The plan also includes 103 projects focused on urban rail systems, involving the construction of 2,000km of new lines at a total cost of CNY1.6 trillion. That compares with the 1,900km of new urban rail the country built under its Five-Year Plan for 2011-2015. 

Another CNY580 billion will be invested in 54 highways, CNY460 billion in 50 airports and CNY60 billion in 10 waterway projects. 

Zhu Haibin, JP Morgan China’s chief economist, was quoted by Chinese news agency Xinhua as saying that the plan shouldn't be seen as another stimulus programme similar to that which followed the Financial Crisis in 2008 but rather as a continuation of China's existing policies.

He said CNY4.7 trillion today is not comparable to CNY4 trillion in 2008: the former accounts for 6.9 percent of 2015 GDP and 8.5 percent of fixed investment, spread over three years, while the latter represented 14.9 percent of 2007 GDP and 33.8 percent of fixed investment. 

Zhu added that the 2008-2009 stimulus was actually much bigger than CNY4 trillion, as reflected by credit growth and local government debt expansion over the period. 

By 2020, China’s transport network will comprise 150 major integrated transport hubs, 100 of which are built upon high-speed railway stations and 50 are airports, NDRC said in its website.