BBC is carrying a story for no apparent reason about the upgrading and expansion of railways in Southeast Asia. What caught this Bystander’s eye was how many of the proposed and improved lines radiate from China.
One is a line from Guangzhou to Hanoi being funded by the Asian Development Bank and France. Another is a rail link from Kunming, which is already two thirds built on the Chinese side, according to the BBC. Both would be substantial upgrades to the existing line on the Vietnamese side, which is mostly single track, with some of it three rail to accommodate the Chinese and narrower Vietnamese gauges.
Those two lines would eventually be extended south from Hanoi to Ho Chi Minh City, upgrading the ancient but spectacular track now there and creaking under the passenger and freight loads it carries.
China is funding feasibility studies for a railway between Hanoi and the Cambodian capital, Phnom Penh, which would pass through Vietnam’s mining region. From there the line would continue to the ports in Thailand and onto those of Singapore.
Other potential routes, according to the BBC report, could be from southern China through Laos along the route of the Mekong river to either the Gulf of Thailand or the South China Sea, and from southern China through Burma to the Bay of Bengal. Both those last two, though, would have more than engineering problems to overcome.
Real estate market slump or no, construction has started on what will become China’s tallest building when it is completed in 2014.
The 632-meter Shanghai Center in the city’s Lujiazui financial center will tower over the Jin Mao Tower and the newly opened Shanghai World Financial Center by 212 meters and 140 meters respectively. Those are already two of the world’s five tallest buildings. When built, the new skyscraper will be the world’s second tallest building after Burj Dubai, now under construction in the United Arab Emirates.
The Shanghai Center is being built on a circular foundation and will have a striking twisting, asymmetrical shape containing offices, a luxury hotel, shops and restaurants. Xinhua has a photo of the foundations. Estimated price tag 15 billion yuan ($2.2 billion). The developers can only hope Shanghai’s commercial real estate rents recover by the time the center is ready to open.
The mystery surrounding Huang Guangyu, founder and chairman of retail chain Gome Electrical Appliances (see “Gome’s Huang MIA“), has taken a further twist.
The day after Beijing police confirmed that Huang, 39 and China’s second richest man, was under investigation for unspecified economic crimes, the company said its chief financial officer, Zhou Yafei, was also being investigated, but that the company itself has no involvement in the investigation (announcement to Hong Kong Stock Exchange, pdf).
Gome has appointed its chief executive Chen Xiao as acting chairman and Fang Wei acting chief financial officer. Gome also said that preliminary internal checks had not revealed any misappropriation of the assets and funds of the group.
The police and company statements are the first official word on Huang’s whereabouts since the Beijing based business magazine Caijing first said last week that the entrepreneur had been detained on suspicion of manipulating the share price of a company in which his older brother owns a substantial stake.
Gome is likely to continue to distance itself from its founder chairman. Little good usually comes to companies whose patriachs fall foul of official investigations for fraud or corruption.
Red flag on the economy raised by Zhang Ping, chairman of the National Development and Reform Commission: economic indicators for November are showing an accelerating rate of slowdown in growth. Zhang was speaking at a press conference following the announcement of the 108 basis points cut in interest rates. “The crisis is spreading all over the world and its impact on China’s economy is deepening,” he added.
Zhang also said that the 4 trillion yuan stimulus package announced earlier this month should add one percentage point to China’s growth rate, a more conservative estimate than that of many private economists.
China’s newly announced cut in interest rates, to 5.58% from 6.66% for the central bank’s one-year benchmark rate, to take effect on Thursday, is the fourth cut since mid-September and biggest since the Asian financial crisis in 1997. The People’s Bank of China has also lowered the reserve requirements it imposes on banks, by 1% point for big banks and 2% points for smaller banks.
None of this is a surprise, though the size of the rate cut has been to some. That in itself is another signal that the economy is slowing faster than desired, and how seriously Beijing is taking remedying that.
Filed under Economy, Markets
A concrete infrastructure spending proposal: 120 billion yuan to build a 1,900 kilometer passenger rail line to from Gansu to Xinjiang, Xinhua repots. The new line will run parallel to the existing Lanxin railway, which will be turned over to freight exclusively, easing a bottleneck to the transport of Xinjiang’s oil, coal and cotton to the rest of China.
At present the Lanxin railway is the only line connecting the far west with the rest of China, running from Lanzhou to Urumqi and then on to the Kazakhstan border, following in part the path of the old Silk Road. Work on the new line will start next year, thought there is no indication of how long it will take. Xinhua also says that 100 billion yuan will be spent on improving roads in the region over the next five years.