China’s rail projects act as a way to boost growth

China's infrastructure spend in the past few years has been immense and rail spending has been the cornerstone of much of the outlay. China had more than 100,000km of railway in operation last year, 10 per cent of which was high-speed rail. The plan is to increase the network to 120,000km by 2020.

Since the Ministry of Railways was dissolved last year following various corruption scandals, the state-run China Railway Corporation (CRC) has put 5,586km of railway into operation, according to the official Xinhua news agency.

Now the government will spend 327 billion yuan (€38.5 billion) on 14 railway projects covering more than 3,700km, the official China Securities Journal reported on Tuesday, as the country pushes ahead with efforts to transform the transportation sector.

Much of the investment has been in the relatively backward western regions, to support economic growth. It’s also working as an export option and is part of China’s efforts to become a high-tech exporter.

When premier Li Keqiang was in London last month, he signed a deal with Britain to promote co-operation on design and construction of railways, including high-speed rail.

This opens the door for Chinese companies to participate in one of the Britain''s largest infrastructure projects HS2 (High Speed 2), a rail project linking London and the north of England.

The country's biggest train maker China South Locomotive & Rolling Stock Corporation (CSR) signed a contract last month with the national railway company of Macedonia to sell six bullet trains to the European country.

It is the first time CSR has made sales in Europe.