High-speed rail loans won't be tightened
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China has embarked on a building spree of high-speed railway lines. [CFP] |
The Chinese banks will keep backing the financing of China's high-speed railway construction, despite the difficulties of managing the loans to the railway sector, Yan Qingmin, assistant chairman of the China Banking Regulatory Commission, told the National Business Daily.
The sudden dismissal of Liu Zhijun, the minister of the Ministry of Railways, raised doubts about the stability of the loans to the vast high-speed railway projects.
“The construction is too fast,” said Wu Wenhua, an expert at the Academy of Microeconomic Research of the National Development and Reform Commission, and added that about 1.5 trillion yuan worth of loans has gone to railways under construction.
However, although Wu pointed to the financial viability of the railway system, he said an initial study found a high risk concerning the stability of railway debt, especially the short-term loans.
