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Friday, July 04, 2014
He Jun: High-speed Rail Liabilities are Government Debts
ANBOUND

Up to now, China Railway Corporation has issued 118 billion yuan railway bonds. He Jun, ANBOUND senior researcher, states that those fund-raising bonds issued by the Corporation cannot and should not be paid off by itself. Generally promoted by the government, China's high-speed rail not only provides basic services for society, but also has other strategic meanings. It can also contribute to stable economic growth. Therefore, market-based investment requirements cannot be used to regulate the construction of China’s high-speed rail. In essence, the railway bonds are actually government debt. There are two approaches to debt-resolving: one is to issue long-term debts to control the situation, the other is using the fiscal revenue to write off all the existing debts after the completion of domestic railway construction.

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