China Economy Forum

[monitor]

Is China the new World Bank?

So, is China reshaping the landscape of development assistance? In a nutshell, yes.

Teresita Cruz-del Rosario and Phillie Wang Runfei

The Chinese are everywhere. Or, more accurately, Chinese money is everywhere, thanks particularly to the China Development Bank (CDB) and the China Export-Import Bank. As the two institutions responsible for all Chinese overseas financing, they are making waves around the world.
According to The Financial Times, Chinese lending in 2008-2010 surpassed World Bank assistance by approximately $10 billion. By the end of 2010, the CDB's reach extended to more than 90 countries, whose total indebtedness reached $141.3 billion.
So, is China reshaping the landscape of development assistance? In a nutshell, yes.
Consider the following: Chinese investment in Zambia's rich copper and coal reserves accounts for 7.7 per cent of the country's gross domestic product. In Saudi Arabia, the state-owned China Railway Construction Corporation built the Al Mashaaer Al Mugadassah light-rail project to ease traffic pressure during the annual Hajj pilgrimage to Mecca. There are even said to be plans for an Arctic highway to facilitate trade throughout the polar region.
Closer to home, a Himalayan railway project to link Tibet to Khasa, at the border with Nepal, is currently under construction, with plans to extend the line all the way to Kathmandu, the Nepalese capital. In Cambodia, China contributed $260 million in assistance in 2009, replacing Japan as the country's largest aid provider and overtaking both the World Bank and the Asian Development Bank's lending portfolios. Last year, China signed 14 bilateral agreements with Cambodia, totalling $1.2 billion, to finance every conceivable item, from irrigation canals to uniforms for the Cambodian military.
Recipient governments are reportedly pleased with China's aid approach. For one thing, there is a notable absence of expensive consultants folded into so-called "technical assistance" packages, a practice that has been a key focus of criticism directed at many funding agencies.
Second, Chinese aid does not require pre-project "missions" by bureaucrats who arrive from distant headquarters for a sort of development tourism that wreaks havoc on the routines of the local counterparts who must accompany them on their poverty excursions.
Third, Chinese aid is dispensed rather quickly and unceremoniously, lacking the burdensome fanfare of lengthy negotiations and voluminous project documents, a practice many scholars and practitioners term "chequebook diplomacy".
Fourth, China dispenses aid without compliance conditions such as environmental protection measures or community-participation exercises. Excruciatingly laborious "stakeholder" consultations - of the type that lasted nearly ten years to construct the World Bank-funded Nam Theun two hydroelectric power plant in Laos - are not required of Chinese aid.
China's unique aid model is one of the main pillars of what the Chinese scholar Sheng Ding calls the country's "soft power" strategy. Beyond the provision of cheap credit and concessional loans is the global export of China's way of doing business.
As economic relations deepen, cultural relationships develop. Confucius Institutes are sprouting from Sri Lanka to Nigeria to promote the study of Mandarin. Alongside these linguistic programmes are seasonal performances by touring Chinese acrobats. Call it global courtship by an avid Chinese suitor.
But worrying signs about China's seemingly benign lending practices are emerging. Chinese financial assistance is tied to the extraction of natural resources, particularly oil and minerals. Environmentalists worry that without a more conscientious "green" component to Chinese lending, unchecked exploitation could lead to resource depletion.
Moreover, Chinese assistance packages often come with Chinese technology and labourers, implying limited employment opportunities and capacity building for local people. For example, 750 Chinese workers were shipped to Indonesia, along with 630,000 tonnes of steel, to construct the five-kilometre Suramadu bridge linking Surabaya to Madura.
The need for disclosure and transparency mechanisms has been emphasised time and again. There is no Chinese counterpart to the Development Assistance Committee, which publishes annual reports on global aid flows from OECD member countries. Nor is there an overarching mechanism, as called for in the 2005 Paris Declaration on Aid Effectiveness, that would align Chinese aid with national development strategies, or establish a forum for coordination with other bilateral and multilateral donors. Fears abound that Chinese aid is beginning to run amok.
Concerns such as these are likely to increase as China emerges as a formidable development player. Yet, by and large, Chinese assistance is welcomed rather than feared.
Those who promote equitable and inclusive development wish to see Chinese aid as part of an integrated international community of providers that is governed by responsible co-ownership. This entails fair and open rules, mutual accountability practices, and sustainable development objectives, all of which require active Chinese participation.
In a world weary of the limited effectiveness of most development programmes in curtailing endemic poverty, China's growing role in countries around the world provides ample opportunity to reconstruct the landscape of economic aid and financing. But reaching that goal requires a plan, and China must play its part in formulating it.




Teresita Cruz-del Rosario is a visiting professor at the Lee Kuan Yew School of Public Policy in Singapore. Phillie Wang Runfei is a research assistant at the Lee Kuan Yew School of Public Policy. ©Project Syndicate, 2011. Project Syndicate - the highest quality op-ed ( opinion-editorial ) articles and commentaries

 

[中国万岁-ProsperThroughCo-]

Lenovo joins tablet war with LePad

By Kathrin Hille in Beijing
Published: March 28 2011 15:18 | Last updated: March 28 2011 15:18

Yang Yuanqing: Lenovo chief executive holds a LePad

When Lenovo, the world’s fourth-largest PC vendor, launched its tablet computer on Monday night, the world was not invited.

The company treated Chinese media to a lavish party in Shanghai, and the LePad – a device with a 10.1-inch screen powered by a Qualcomm Snapdragon processor – went on sale in China only. And yet, some industry experts see the Chinese company, under Yang Yuanqing, chief executive, as the most likely future rival for Apple in the global tablet market.

Manish Nigam, head of Asia technology research at Credit Suisse, said Lenovo might be the best positioned among the new tablet vendors because of its dominant position in China. The company has a 30 per cent share in the world’s second-largest and fastest-growing PC market.

“Lenovo is well-placed to make its tablet work. They have been a good engineering company,” said Mr Nigam. “Acer relies too much on [outsourced design and manufacturing], and Asus lacks global scale.”

According to IDC, the technology research company, 18m tablet devices were sold worldwide last year, with Apple accounting for 83 per cent. This year, most forecasts expect the market to more than double to at least 40m units.

Kirk Yang, head of non-Japan Asian hardware technology research at Barclays Capital, said he expected Apple’s market share to slide to about 72 per cent this year and named Lenovo, Samsung, RIM and Acer as strong candidates for grabbing at least 10 per cent each of the remaining market.

Lenovo’s focus on China, which will make it a late-comer in other markets, is expected to be the group’s biggest strength. “When it comes to tablets, what matters is software, not hardware,” said Mr Yang. “Lenovo’s strength is that they have a Chinese interface and Chinese applications.”

This follows Lenovo’s successful start in the mobile products segment with the LePhone, which sells well to Chinese consumers who are affluent enough to afford a smartphone but do not read English and want a wide range of homegrown applications.

At Rmb3,499 ($532), the LePad is more expensive than the cheapest iPad, which is available from Rmb2,888 in China. But many Chinese consumers are more likely to compare Lenovo’s tablet with the iPad 2. Apple’s latest product has not officially started selling in China, but grey market imports are available from Rmb5,000.

Analysts also believe that Lenovo’s strategy of launching its mobile products in China first gives the company a valuable testing ground. LG, the South Korean technology group, failed with this strategy for its handset business, but observers expect it to work for Lenovo because the Chinese market is so much bigger than Korea.

 

[Brotherhood]

China becomes world's fastest-growing business jet market - People's Daily Online March 30, 2011

Airbus recently announced that China has become the world's fastest-growing business jet market, and it will continue to maintain a relatively fast growth rate.

China's demand for business jets is expected to reach about 30 during the 12th Five-Year Plan period. The business jet orders from China currently account for 25 percent of the total global business jet sales of Airbus. The proportion of business jet orders from China to the total global business jet sales of Airbus will continue to grow in the future.

The number of business jets in China will increase by at least five for every year of the 12th Five-Year Plan period. Airbus has already sold two business jets to China in the first quarter of 2011.

By People's Daily Online

 

[Brotherhood]

China's domestic applications for invention patents up 28% in 2010 - People's Daily Online March 30, 2011

The number of domestic applications for invention patents increased 27.9 percent in 2010 from 2009, said a senior patent official on Tuesday.

The country received more than 391,000 applications for invention patents in 2010, the world's second most, said He Hua, State Intellectual Property Office deputy director, at a meeting attended by heads of local intellectual property rights offices held in Nanjing, capital of east China's Jiangsu province.

Among the patents, 74.9 percent were submitted by domestic applicants, he said.

He attributed the increase to the fast economic growth and the country's efforts to foster innovation.

From 2006 to 2010, invention patent applications totaled 1.45 million, 2.6 times that of the figure from 2001 to 2005.

Chinese applicants also submitted 36,000 patent applications abroad under the Patent Cooperation Treaty from 2006 to 2010, ranking the world's fourth most by country, he said.

Source: Xinhua

 

[Brotherhood]

Extraordinary rare earth deposit discovered in Zhejiang - People's Daily Online March 30, 2011

The Zhejiang Provincial First Geological Team has discovered a mammoth scandium-polymetallic deposit in northwestern Zhejiang that has proven scandium reserves of 70 tons worth about 70 billion yuan, according to an announcement made by the Zhejiang Provincial Geology and Exploration Bureau on March 29.

The rare earth deposit contains 17 types of metallic elements. Of them, scandium is mainly used in national defense, spaceflight, nuclear power, superconductor and other cutting-edge technological sectors and is one of the elements included in national strategic reserves.

Yang Xiaochun, head engineer of the Zhejiang Provincial First Geological Team, said that the market price for scandium is normally four times higher than that of gold and at one point in history it was 10 times more valuable.

The deposit is also accompanied by a large-scale silver-polymetallic deposit with 800 tons of silver and 130,000 tons of lead and zinc. The silver-polymetallic deposit contains 3,000 tons of cadmium, which is equivalent to the reserves of a large-scale cadmium deposit. The were also medium-scale deposits found containing 7,000 tons of tin, 400 tons of gallium and 5.5 tons of rhenium.

This was the first time to discover not only an enormous scandium deposit in China but also so many types of precious, non-ferrous and rare metals all with reserves above a certain scale in the same deposit.

These rare earth metals are all highly priced. The market price for tin stands at about 200,000 yuan per ton. The market price for gallium is similar to that of sliver, standing at about 6 million yuan per ton. The price for rhenium is 60 million yuan per ton, which is 10 times higher than that of silver.

By Li Jia, People's Daily Online

 

[Brotherhood]

Chinese machinery output soared last decade, still rising steadily - People's Daily Online March 30, 2011

The output value of China's mechanical industry grew by more than 25 percent per year over the past 10 years, increasing from more than 1.4 trillion yuan in 2000 to nearly 14.4 trillion yuan in 2010.

The asset size of China's mechanical industry also increased from 2 trillion yuan to 10.4 trillion yuan over the past 10 years and the equipment self-sufficiency rate increased from 70 percent to 85 percent.

At present, the output value of China's machinery industry in one month is equivalent to the total annual output value in 2000.

The annual growth of China's mechanical industry output value will stay at around 12 percent during the 12th Five-Year Plan period and the annual growth of China's mechanical industry export revenue will stay around 15 percent, according to the "Overall Plan of the Machinery Industry Development during the 12th Five-Year Plan Period" released recently.

By Li Jia, People's Daily Online

 

[Brotherhood]

CNOOC to acquire one-third of 3 exploration areas in Uganda for 1.47 bln USD - People's Daily Online March 31, 2011

China National Offshore Oil Company Limited (CNOOC Ltd.) said on Wednesday that it has signed an agreement with U.K.-based Tullow Oil plc (Tullow) for a one-third interest in three exploration areas in Uganda for 1.467 billion U.S. dollars.

The transaction, which is subject to regulatory approvals by authorities in Uganda and China, is expected to be completed in the first half of 2011.

According to CNOOC Ltd., TOTAL S.A. (TOTAL) of France has also signed agreements with Tullow for the acquisition of another one-third stake in the three exploration areas.

The exploration areas, 1, 2 and 3A are located in the Lake Albert Rift Basin in Uganda, which is one of the most important prospective basins in Africa. As estimated by Tullow, more than one billion barrels of P-50 recoverable volume of oil has been discovered since 2006.

Upon the completion of the two transactions, CNOOC Ltd., Tullow and TOTAL will each hold a one-third stake in the three exploration areas.

CNOOC Ltd., Tullow and TOTAL are looking to coordinate operations and integrate development plans across the three exploration areas in the Lake Albert Basin. It is expected that more than 200,000 barrels of oil will be produced each day in the area.

Yang Hua, the Chief Executive Officer of CNOOC Ltd., said that the transaction to gain entry into the Lake Albert Basin signifies another milestone for the company in its expansion of its overseas business. The area is one of the key basins in East Africa.

Li Fanrong, the President of CNOOC Ltd., said that the project is expected to become one of the largest oil and gas developments in Africa in recent years.

The agreement will help CNOOC Ltd. establish its second major production area in Africa following Nigeria. The deal is also expected to contribute to the long-term growth of the company, he said.

CNOOC Ltd., which is listed in Hong Kong and New York, is a subsidiary of China National Offshore Oil Corporation, China's largest offshore oil producer.

Source: Xinhua

 

[Brotherhood]

China set to power on with massive nuclear plants - People's Daily Online March 31, 2011

As the world discusses the safety of nuclear power, China appears to be keeping its faith in the sector, despite announcing a wave of emergency safety reviews in the wake of the crisis at Japan's Fukushima plant.

Nuclear safety standards will be reinforced, but China's plan for nuclear power remains unchanged, Xie Zhenhua, deputy director of the National Development and Reform Commission (NDRC), said Wednesday during a visit to Canberra.

"On the basis of the findings of these evaluations, we will further improve the nuclear development plan," Xie said during a visit to the Australian capital, vowing that the plant review is aiming to ensure 100 percent safety.

This month, the government suspended the approval of all nuclear power plant projects, pending the completion of a nationwide inspection of all atomic reactors and construction sites.

Authorities had been ambitious about the potential of nuclear power and drafted plans to reduce China's dependence on fossil fuels.

The NDRC announced in January that annual nuclear power capacity is expected to stand at 40 GW by 2020, accounting for up to 6 percent of the nation's electricity supply, the State Power Information Network reported.

A total of $150 billion is set to be invested within this decade, the National Energy Administration announced in 2009.

China currently has 13 nuclear power stations in operation, but these make up only 2 percent of the country's electricity needs. The construction of another 27 plants is underway.

However, the tightened rules were not received gratefully by inland provinces, whose economic rise have led to an energy glut.

According to a report released in late 2010, 31 out of 43 sites seen as suitable to host a nuclear plant are located in inland regions, according to State Grid Corporation of China.

The intention to move plants inland has come under scrutiny since the incident in Japan, with critics questioning whether regions with few water sources are truly suitable for this purpose.

There is a primary conflict that must urgently be solved for the construction of nuclear plants in inland provinces, Gui Liming, a nuclear safety expert at Tsinghua University, told the Global Times Wednesday.

"Adjacent water sources are a must for a nuclear plant due to security concerns. However, many places with ample water supplies are also heavily populated. There must be a subtle balance between the safety of the population and the location of nuclear plants," Gui said.

Please read the whole story from the link.

 

[Brotherhood]

China may double solar power goal amid Japan nuclear crisis - People's Daily Online March 31, 2011

China may lift its 5-year goal for solar power capacity from five gigawatts (GW) to 10 GW by 2015, a National Energy Administration (NEA) official told Xinhua Wednesday.

Shi Lishan, deputy director of the renewable energy department of the NEA, confirmed a media report on the possible adjustment of photovoltaic (PV) industry's future capacity.

In light of recent nuclear crisis in Japan, the revision is likely to be approved though it is still under discussion, according to an article from the Wednesday edition of the China Securities Journal.

China may fine tune its nuclear power development plan, as the nuclear crisis in Japan has triggered safety concerns, the article said.

Shortly after Japan's Fukushima Daiichi nuclear plant was crippled by a massive earthquake-triggered tsunami in March 11, which led to radioactive leak, the State Council, or China's cabinet, said it would "adjust and improve" China's nuclear plan and has already suspended its approval process for new nuclear power stations.

However, officials have not yet indicated any possible change for the country's long-term nuclear energy plan.

China plans to use non-fossil fuels to supply 15 percent of its total power by 2020, up from the current level of 8 percent. Nuclear power is expected to account for 4 percent of the country's power needs.

Therefore, any scaling back of China's nuclear plans will require a commensurate increase in wind, solar and hydroelectric energy if the country still plans to meet its 2020 target, the article said.

PV producers are confident that solar power is the most likely to fill the supply gap as hydroelectric development is facing a lot of pressures such as environment and the evacuation of local residents.

In addition, wind power is still limited by underdeveloped ultra-high voltage transmission lines, according to a quote from the article by Xu Hongjian, vice president of Yingli Solar's Beijing office.

Yingli Solar is one of China's largest PV suppliers.

China is the largest solar panel producer in the world, but 90 percent of these panels are sold overseas, according to Huang Xinming, head of a research institute at JA Solar, another large Chinese solar power company.

Solar power produced in China only accounts for 1 percent of the world's total, mainly due to its relatively high cost compared to thermal power and hydroelectric power, Huang said.

"Japan's nuclear leak has made many countries rethink the safety issues of nuclear power, which will give other clean energy sources, especially solar power, an opportunity to develop even faster," said Huang.

Although it is costly, solar power has great development potential due to rich availability and rapid technological advancement, he said.

According to Huang, the Hebei-based JA Solar company has just developed a new technology that could cut the cost of producing silicon, an important material in manufacturing solar panels, by 60 percent.

The cost of an entire solar cell production line could be reduced by 10 percent, he said.

In addition to these cost cuts, the new technology could also increase the efficiency of solar panels manufactured with the new technology in place, Huang said.

JA Solar has spent 30 million yuan (4.57 million U.S.dollars) to develop the technology, he said.

"This practice will play a big role in promoting China's solar industry," said Chen Chao, a solar power engineering professor at Fujian-based Xiamen University. Chen was also a member of an expert panel which evaluated the new JA Solar technology.

China continued to solidify its position last year as the world's green investment leader, according to a report released Tuesday by the U.S.-based Pew Charitable Trusts, a non-profit, non-governmental organization.

The report said that Germany and the United States follow China as the world's biggest green investors.

Clean energy investments in China reached 54.4 billion dollars in 2010, up 39 percent from the previous year, the report said.

Source: Xinhua

 

[oct605032048]

Wind power industry ‘will expand at a slower pace’

BEIJING – China's soaring wind power industry, which enjoyed three-digit annual growth in the four years preceding 2009, will slow down its annual growth pace in the near future, said a leading Chinese wind industry official Friday in Beijing.

"China's wind power capacity will maintain two-digit growth annually in the future," said Shi Pengfei, vice-president of the China Wind Energy Association (CWEA) at the Renewable Energy Grid Integration China 2010 Forum, which closed Friday in Beijing."This slowdown of the annual growth rate can be attributed to the mammoth number of Chinese wind power stations," said Shi.

CWEA figures show that wind turbines installed in 2010 added a total of 18.9 gigawatts to China's total wind power capacity, a 37.1 percent increase over 2009. This propelled China's total wind power capacity to 44.7 gigawatts, or a 73.3 percent increase over 2009. China passed the United States to become the world's largest producer of wind-generated electricity in 2010.

The annual growth of China's cumulative wind power capacity averaged 113 percent from 2006 to 2009.Shi said that wind turbines planned for installation across the country from 2011 to 2012 will add another 30 gigawatts to China's total wind power capacity.

China's wind power boom came in the wake of a series of preferential policies and laws passed by the government in support of the development of renewable energy, as represented by the Renewable Energy Law enacted in February 2005.The Chinese wind power industry has developed quickly since the passing of that law and exceeded the expectations of industry observers.– Xinhua

Wind power industry ‘will expand at a slower pace’

 

[Brotherhood]

China's poor inland region to hike minimum pay by 25% - People's Daily Online March 31, 2011

Northwest China's Ningxia Hui Autonomous Region Thursday announced it will increase its minimum wages, currently the lowest in the country, by 24.9 percent on average starting April.

Minimum monthly wages for full-time workers will be raised to 900 yuan (137 U.S. dollars), 820 yuan and 750 yuan respectively in three different regions of Ningxia, said Li Ningshun, deputy director of the regional bureau of human resources and social security.

Meanwhile, minimum wages for part-time time workers will be raised by about 18 percent to 9 yuan, 8.5 yuan and 8 yuan per hour in the regions, Li said.

Ningxia is the latest to join many other regions, including Shanghai, Shenzhen, Zhejiang, Tianjin and Shanxi, in further hiking wages starting April. Guangdong, Shandong and Fujian provinces raised minimum wages in March.

Severe labor shortages, sporadic strikes and rising living costs prompted a round of wage hikes nationwide last year and a new round this year.

China's consumer price index, a major gauge of inflation, rose 4.9 percent in February from one year earlier, the same as in January, as food prices surged 11 percent.

Source: Xinhua

 

[Brotherhood]

Western China to become hub for foreign investment: official - People's Daily Online April 01, 2011

Western China will become a hot region for overseas investment over the 12th Five-Year Plan (2011-2015) period, a senior official with the Ministry of Commerce (MOC) said Thursday.

The ministry plans to adopt measures such as hosting the Western China International Fair (WCIF) to make China's vast western region more attractive to foreign investment, said Cao Hongying, vice director of the Foreign Investment Department of the MOC, at the introductory meeting of the 12th WCIF.

Cao said he expected rapid growth in foreign investment in western China in the years to come due to the area's abundant natural resources and huge market potential.

Besides the WCIF, the ministry would also provide favorable policies in the western region to help attract more overseas investment, he added.

The 12th WCIF will be held from Oct. 18 to 22 in Chengdu, capital city of Sichuan Province.

Source: Xinhua

 

[Brotherhood]

China sets 2011 rare earth output quota - People's Daily Online April 01, 2011

Table 1: World production and reserves of rare earth elements minerals in 2009. (Source: Long and others 2010) [Note: TREO: total metric tonnes of rare earth oxides]

China aims to cap the total output of rare earth oxide at 93,800 tonnes this year, the Ministry of Land and Resources announced Thursday.

This was 5.16 percent higher compared to the quota set for last year.

China will not grant any new licenses for rare earths prospecting and mining before June 30 of 2012, the ministry said in a statement on its website.

The statement also said the country would cap the total output of light rare earths at 80,400 tonnes and that of medium and heavy rare earths at 13,400 tonnes this year.

As the world's largest rare earths producer and exporter, China supplies 90 percent of global demand, but its reserves only account for about one-third of the world's total.

China has announced a series of policies for the rare earth industry this year to balance environmental protection needs and industrial demands, including stricter emission limits on miners, cuts in export quota and a resources tax.

Source: Xinhua

 

[Brotherhood]

China's March PMI of manufacturing sector rises - People's Daily Online April 01, 2011

The Purchasing Managers Index (PMI) of China's manufacturing sector rose to 53.4 percent in March, the China Federation of Logistics and Purchasing (CFLP) said Friday.

The March PMI figure was higher than the 52.2 percent in February and 52.9 percent in January.

Source: Xinhua

 

[Brotherhood]

China's railway debt under control - People's Daily Online April 01, 2011

In response to growing concerns about whether the high-speed railway boom will slow China's economic growth, Yu Bangli, chief economist of the Ministry of Railways (MOR) said in a recent press conference that China has adequate funds to finance large-scale high-speed railway construction and will not face a related debt crisis.

Instead of slowing economic growth, high-speed railways will drive it, Yu said. The construction and operation of high-speed railways has injected new fuel into China's economy. They have not only brought the urban economy convenience and efficiency but also promoted the flow of human resources, technology and capital.

Yu said that to evaluate the operating results of high-speed railway projects, it is important to not only assess the profits of one railway line or project but also the comprehensive benefits of the railway line or project.

High-speed railways have produced the "one-city effect" between some cities, helped increase freight capacity of some railway lines, promoted the unity of the domestic market and will possibly tackle the issues related to the coordinated development of different domestic regions.

The debt-to-asset ratio of railway enterprises stands at 56 percent

China's railway minister Sheng Guangzu said during the "Two Sessions," held last March, "It is normal to incur debts when funding the development of railway projects. The current debt level is within the safe range, about which the public can feel assured."

Sheng said that China's railway enterprises had 3.3 trillion yuan in total assets and 1.8 trillion yuan in debts at the end of 2010, with a debt-to-asset ratio of about 56 percent. "This ratio is relatively low among industrial enterprises," he said.

The report shows that the MOR issued three 10-billion-yuan short-term bonds since the start of 2011. In regards to the purpose of raising funds, Sheng said the funds will be used for railway construction and operation.

Xie Xuren, minister of finance, also said the overall debt level of China's railways, which is lower than the debt level of many foreign railway corporations, is safe, reasonable and controllable,.

160 billion yuan of private capital to be invested in railways

According to sources, the MOR has arranged 700 billion yuan of investments for railway construction to launch 70 new projects, including 15 high-speed railway projects in 2011. "We are confident in ensuring railway construction funds through various methods," said Wang Yongping, spokesperson for the MOR.

In regards to the current deficit of high-speed railways, Yu believes high-speed railways need four to seven years to realize profits. The high-speed railway in western China may see a deficit in the short term just like common railways.

However, from the perspective of promoting western development and coordinated regional economic development, the MOR has made a reasonable financial arrangement to avoid financial risks. China has a huge population, and its urbanization is also rapidly advancing. The sustained, steady and rapid economic development situation will allow high-speed railways to achieve a sustainable positive development through marketing.

By People's Daily Online