VisitCHN

A decade ago, China considered its railway sector an essential strategic industry that must never fall into the hands of foreigners, lest they use it to invade and conquer the country.

Today, Beijing has ambitious plans to spend hundreds of billions of dollars on improving and expanding the nation’s creaky rail network but is only prepared to put up a fraction of the required amount.

Now foreign companies are ostensibly welcome to participate as the state begins to cautiously privatise parts of its rail assets. A state media report yesterday suggested the ministry of railways may fold assets worth around Rmb300bn ($44bn) into a company that would then raise money through an initial public offering.

The plan would inject the assets of government departments that operate railway lines between Beijing, Shanghai and Jinan into the new company and would eventually also include a new Beijing-Shanghai high-speed rail line.

The Beijing-Shanghai line is China’s most profitable rail route and is one of a number of prime assets the government has considered for partial privatisation in the past. The Chinese report gave no timetable for the listing but said an alternative plan under consideration would see the assets injected into an investment vehicle owned jointly by the national pension fund, local governments and Ping An Insurance, with the railway ministry retaining a majority stake.

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