Chinese cities face subway delays as Beijing targets wasteful spending, high debt levels
Rich hubs, including Ningbo and Suzhou, are hitting regulatory roadblocks as the central government prioritises fiscal discipline over infrastructure-led growth
China is tapping the brakes on some subway expansions, including in certain affluent cities – a decision that analysts said reflects a shift from the debt-fuelled infrastructure boom of the past to a new era of fiscal discipline and investment efficiency.
Rich eastern hubs such as Ningbo and Suzhou are among those facing regulatory roadblocks in securing Beijing’s approval for new lines as policymakers scrutinise loss-making projects.
In an online response to public inquiries, the Ningbo Municipal Development and Reform Commission said this month that the city’s ridership metrics “need further improvement” and currently fall short of the conditions required for submission to the country’s top economic planner for approval.
The local commission noted that Beijing had issued stricter standards and was requiring previously approved but unbuilt projects to be resubmitted for vetting.
“Since subway operations in most Chinese cities are loss-making and require subsidies, the fact that their funding sources are now extremely limited means the government has to tighten up,” said Zhao Jian, director of the China Urbanisation Research Centre at Beijing Jiaotong University.
This stricter oversight, once more common among smaller or less-developed cities, has been extended to economic powerhouses. Suzhou, located in Jiangsu province, west of Shanghai, has a population of nearly 13 million and boasts one of the nation’s highest gross domestic products.
Suzhou officials conceded in an online forum this month that the city’s passenger density “falls short of the requirements of the latest national policies”, and that authorities were exploring ways to boost ridership, according to property news outlet Real Estate Watch China.
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For decades, massive infrastructure buildouts helped drive China’s economic growth, and they created sprawling rail networks at breakneck speed. Shanghai, for instance, has around 900km (560 miles) of subway tracks – the first of which opened in 1993.
But the construction of city railways – which in China are mostly underground – can cost up to 1 billion yuan (US$142 million) per kilometre, Zhao said, adding that current subway construction benchmarks are already lenient.