Profitability of projects requires further attention: expert
The Chinese government will invest 800 billion yuan ($116.5 billion) and 1.65 trillion yuan, respectively, in the nation's railway and highway systems in 2017, a government official disclosed at a press conference held by the State Council Information Office on Monday afternoon.
The planned investment scale is roughly on the same level as 2016, when the government invested about 801.5 billion yuan and 1.78 trillion yuan, respectively, in the railway and highway sectors, statistics from the Ministry of Transport showed.
Fixed-assets investment in the transport sector amounted to 2.85 trillion yuan in 2016, up 3.8 percent year-on-year.
Last year, 3,281 kilometers of new railway lines and 113,000 kilometers of new highways went into operation, while eight new civilian airports were built, Transport Minister Li Xiaopeng said during the press conference.
But Zhao Xian, a professor at Beijing Jiaotong University, cautioned that the scale of investment in transportation projects has been "too much" in recent years.
Zhao said that the current investment structure is not always rational, because many new projects are unprofitable, especially those in less developed areas.
According to Li, 1.8 trillion yuan of investment is expected to be injected into transport aid projects, which are those built in poor areas with the target of stimulating economic development in those places, during the 13th Five-Year Plan (2016-20) period.
But Zhao said that the government should also consider the commercial aspects of those projects. "There's not enough passenger demand in those regions, and the projects built there usually lose money," he said, adding that the focus of transportation construction should shift to the environs of big cities.
According to Zhao, in order to cut transportation costs railways should assume a more prominent role in shipping bulk commodities.
Li also disclosed other missions the government hopes to complete in the transport sector. For example, the government plans to cut logistics costs of about 40 billion yuan to 50 billion yuan in 2017.
Li said that the total transport investment scale will reach 15 trillion yuan by the end of 2020, and by then China will have a modern transportation system that's safe, convenient, efficient and green.
