A quick update to our note yesterday on China’s newest high-speed trains being tested on tracks that can stand extremes of hot and cold weather: The official Economic Information Daily says that China will invest 2.3 trillion yuan ($366 billion) in its railways over the current five-year plan to 2015. While that is 500 billion yuan less than originally planned, it is still up from the 1.9 trillion yuan spent in the great build-out under the 2006-201o five-year plan.
It is likely that the bulk of the cuts have already been made. Spending was reined in in the wake of the bribery and corruption scandal around sacked railways minister Liu Zhijun and then the Wenzhou crash. In July, state media reported that railway investment spending for this year, at 580 billion yuan, would be up 12.4% on the originally planned 516 billion yuan. Already approved projects were brought forward to counter slowing growth in the economy overall. State media have also reported that China’s railways lost 8.8 billion yuan ($1.4 billion) in the first half of this year.