June 8, 2012 / 11:26 AM / in 7 years

China says to support railway investment -Xinhua

BEIJING, June 8 (Reuters) - China will step up policy support to ensure investment in the railway sector as part of measures to bolster economic growth, a top government official was quoted on Friday as saying.

China said last month it would open up the railway industry to private investment on an unprecedented scale, but private investors are sceptical - the government had moved to slow railway project approvals to address public anger after a crash on a new high-speed rail line in July that killed 40 people.

“We will step up support for railway construction to maintain the required size in railway investment to order to boost transport capacity,” the official Xinhua news agency quoted Chinese state councillor Ma Kai as saying.

“This is also an important measure to expand domestic demand and cope with the downward pressure on the economy.”

More investment was needed because China’s railway networks still cannot meet the need of China’s economic development, he was quoted by Xinhua as saying.

State agencies and financial institutions needed to step up support for railway projects, said Ma, who is also secretary-general of the State Council, China’s cabinet.

Ma also urged the railway sector to raise funds via multiple channels to support key investment projects.

Total fixed-asset investment in railways totalled 89.6 billion yuan ($14.08 billion) in January through April this year, down 48.3 percent year-on-year.

China’s annual economic growth is on track to dip below 8 percent in the second quarter — the sixth consecutive quarter of slowdown as demand at home and abroad slackens.

The central bank on Thursday cut interest rates for the first time since late 2008 to combat the slowdown, following recent government steps to fast-track investment projects ($1 = 6.3635 Chinese yuan) (Reporting by Kevin Yao; Editing by Nick Macfie)

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