China to cut railway investment in 2012 -media

BEIJING Dec 23 (Reuters) - China's railway ministry plans to cut its annual railway investment by 15 percent in 2012 to 400 billion yuan ($63.10 billion), the official Xinhua news agency reported on Friday.

The moderate scale-back in spending comes after a deadly crash between two Chinese high-speed trains earlier this year that sparked public fury and forced Beijing to slow the country's rapid railway expansion.

Slower investment could reduce financial strains on the heavily-indebted Railway Ministry, China's largest bond issuer after the treasury and with outstanding debt of 2.23 trillion yuan ($351.8 billion) as of the end of September.

Railway infrastructure investment directly accounted for only about 3 percent of China's overall capital spending in 2010.

To support the cash-strapped sector, Beijing has cut taxes for buyers of the Railway Ministry's bonds between 2011 and 2013.

Xinhua said the Railway Ministry would start construction of 6,366 kilometers of new train lines in 2012.

Since the train accident in July which killed at least 40 people, construction of new high-speed trains in China has ground to a near halt. ($1 = 6.3390 Chinese yuan) (Reporting by Aileen Wang; Editing by Jonathan Hopfner)