Entering the period of “13th Five-year Plan”, a huge scale transportation investment of several trillion yuan will initiate soon. Based on rough statistics by SSN journalist, about ten provinces and cities, such as Chongqing City, Guangdong Province, Yunnan Province, have determined transportation investment plan during the period of “13th Five-year Plan”, most of them with a scale of over 400 billion yuan, totaling at around 5.8 trillion yuan. In terms of detailed investment fields, that for railway and expressway still accounts for a major part of total investment for local transportation.
Investment focuses on railway and expressway
Chongqing held a transportation work meeting on Jan. 11 to announce that its transportation plan totals at an investment of around 400 billion yuan during the period of “13th Five-year Plan”. On Jan. 10, Yunnan determined in the meeting that, by 2020, construction investment for road and waterway in the whole province will reach 500 billion yuan, partially, it will finish an investment of 100 billion yuan for transportation infrastructure.
Guangdong also held a transportation work meeting on Jan. 7, proposing to complete an investment of 500 billion yuan during the period of “13th Five-year Plan”. The same day, Henan Province announced to finish an investment of 235 billion yuan during the same period.
Besides the said four provinces (cities), many other provinces are formulating a transportation blueprint related to “13th Five-year Plan” for the next five year.
Transportation planning of “13th Five-year Plan” drafted by Zhejiang Province proposes to invest a three-dimensional and comprehensive transportation system covering waterway, road and aviation with 1 trillion yuan to build up a “one-hour traffic circle” in the whole province. Specialized Planning for Comprehensive Transportation Development of Fujian Province’s “13th Five-year Plan” (draft) points out that it plans to complete an investment of over 650 billion yuan in next five years.
The basic idea of comprehensive transportation development of Shaanxi Province’s “13th Five-year Plan” is to focus on arrangements for eight major engineering with a total investment of 550 billion yuan, such as comprehensive transportation construction, development and upgrading of roads, construction and speed-up of railway, development and expansion of civil aviation, development and catching-up of waterway, quality improvement of passenger transportation service, modern logistics improvement and intelligent transportation guidance.
Last year, Gansu Province issued an “implementation scheme for transportation breakthrough action” with a term of six years (2015-2020) to connect with “One Belt and One Road Initiative”, proposing to invest over 800 billion yuan in next six years.
Heads of Department of Transportation of Sichuan Province and Hunan Province also disclosed transportation investment plan of “13th Five-year Plan” in the interview. Partially, Sichuan will keep an annual investment of over 100 billion yuan during the period of “13th Five-year Plan”, and Hunan has preliminarily selected 77 key projects with a total investment of 673.1 billion yuan.
According to rough statistics, the mentioned 11 provinces have a total investment of 5.8 trillion yuan for transportation during the period of “13th Five-year Plan”.
In terms of detailed investment fields, that for railway and expressway still accounts for a major part of total investment for local transportation.
Shaanxi, Hunan and Zhejiang will focus on railway investment, accounting for nearly a half of the total investment. For example, Zhejiang plans to invest 500 billion yuan in track traffic, including high-speed railway, express railway and metro, which is over 3 times of “12th Five-year Plan”.
And Guangdong will pay more attention to expressway construction. Last year, the total mileage of its expressway accessible to the public initially exceeded 7,000 km, with a goal of 11,000 km in next five years. Sichuan also indicates that its annual investment for expressway will reach 50 billion yuan, and the total mileage accessible to the public will exceed 8,000 km by 2020.
Planned investment scale surpasses that for “12th Five-year Plan”
In terms of these several Five-year Plans, local governments always maintain a large-scale investment for transportation construction. Based on disclosed local data, during the period of “12th Five-year Plan”, finished scale for transportation investment of each province greatly increased when compared with scale of “11th Five-year Plan”, and that of some provinces, including Chongqing and Zhejiang, has even increased by several times.
Such trend will still continue in next five years. Transportation investment scale of province and cities including Chongqing, Guangdong, Shaanxi, Fujian and Hunan during the period of “13th Five-year Plan” continues to expand when compared to “12th Five-year Plan”.
Fox example, Zhejiang plans to invest 1 trillion yuan for transportation in the period of “13th Five-year Plan”, up by nearly 70 percent compared to “12th Five-year Plan”, and that of Hunan increased by over 70 percent.
Why do local governments constantly increase transportation investment? On one side, it is the demand. Some areas, especially provinces in the middle and west of China, are lagged in transportation infrastructure. Transportation is still a weak sector in the economic development of Chongqing. On the other side, transportation investment plays a significant role in stable growth of local governments. Public data shows that, during the period of “12th Five-year Plan”, transportation investment of Shaanxi directly contributed to over 6 percent of the economic growth of the whole province; in terms of Henan, contribution rate was 3.3 percent, and it proposed to maintain a rate of over 3.3 percent during the period of “13th Five-year Plan”.
Yang Chuantang, minister of Ministry of Transport, indicated in the national transportation work meeting of 2016 held at the end of last year that “stable growth task for economy is very heavy, and transportation still plays a key role in continuing to hedge the economic downtrend with its effective investment”. He expected that “during the period of ‘13th Five-year Plan’, investment scale for China’s transportation infrastructure and facilities will maintain a high level for operation”.
Zhang Jun, chief economist of China Fortune Securities, believed there is another factor for local governments to increase transportation investment. “Under the background of restricted financing capability of local governments, central fiscal support and local bonds approved by the central government become especially important, while transportation facilities construction is more likely to gain the central support when compared to other types of infrastructure projects. And local investment of ‘13th Five-year Plan’ will also focus on transportation, which may be related to such factor, too.”
Translated by Jelly Yi