‘Ghost’ train stations raise questions about rapid expansion of China’s high-speed rail network

New lending rules aimed at preventing a housing bubble from bursting have led to a decline in China’s property market, which once accounted for 25% of the country’s gross domestic product.

Other infrastructure projects, including the high-speed rail network, which rely heavily on local government loans and grants, have also been hit.

Fixed asset investment in China’s rail infrastructure fell to about 711 billion yuan (100 billion U.S. dollars) in 2022 – down 11% from pre-COVID levels.

Chinese officials have urged local governments to cut investment in high-speed rail projects amid a decline in passenger numbers during the pandemic.

“The Chinese central government was willing to provide some money, but expected the initiative to be mainly taken at the local level,” said Professor Liu Baocheng of the University of International Business and Economics.

“There is (also) a high probability that some localities will not be very efficient and will fall into an even deeper debt trap.”

The state-owned enterprise that manages the rail network, China’s State Railway Group, had total liabilities of 5.91 trillion yuan at the end of 2021.

Earlier this year, China raised ticket prices for high-speed trains on four major lines as the country grappled with debt and high costs and a struggling economy.