Railway boom to boost industries

"The expansion of various railways, including high-speed, freight rail and more intercity services, can bring so much more than just convenience. It has the ability to change people's lives and the country's trade structure, and as a result I foresee much better dispersal of the population," Wang said.

To gain sufficient funds for these new rail projects, the central government in July unveiled a guideline on management of a fledgling railway development fund to attract private investment into the railway sector.

The China Railway Development Fund managed by the CRC will last for 15 to 20 years and could be extended if approved by the State Council. The CRC will sign agreements with private investors and propose the amount of annual fundraising.

The fund will be prevented from being invested in high-risk investments such as guarantees, futures or derivative financial products.

He Jingtong, professor of finance at the Tianjin-based Nankai University, said even though it is a flexible improvement to raise funds from the public, the CRC's debt is too high and it still has administrative and monopoly operation power. Therefore, it won't be easy for investors to buy the new railway bond or stocks within a short period.

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