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People's Daily Online>>China Business

Overheated transport construction brings financial risks (2)

(Beijing News)

15:47, March 27, 2012

Because of the high investment and operational cost, most of the subway lines in China are losing money.

Competition between high-speed railway and airline is getting fiercer.

“Wherever the high-speed railway goes, the price of airline ticket falls,” Jin Fengjun said, “Now the competition between high-speed railway and airline is very intense and it is expected to be fiercer in the future.”

Reflections and suggestions

In some western and central provinces the excessive transport construction brings little economic returns, which are suspected to be “administrative achievement projects”. Some regions are heavily indebted and the loans are the money the local people saved in banks, said Lu Dadao, academician of Chinese Academy of Sciences.

In sharp contrast to the overheated growth of high-speed transport is the insufficient construction of basic transport. At present more than 100 towns and 40,000 villages have no roads. In 2009, the unpaved and simply paved roads account for 55 percent of all roads in China; there are 95,742 unsafe bridges too, Lu said.

Lu suggested that China should make a medium- and long-term plan for transport construction according to the national conditions and coordinate the development of different means of transportation.

In the future it is proper to reduce the national investment in transportation to 3 or 4 percent of GDP and to improve the basic transport construction as well as enhance the transport organization, Lu said.


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