Premier Li Keqiang chaired a State Council executive meeting on April 2, which determined policy measures to deepen reform of the railway investment and financing system and accelerate railway construction. The meeting noted that this year China's railways are expected to put more than 6,600 kilometers of new lines into operation, an increase of more than 1,000 kilometers over last year, with nearly 80% of state investment directed to the central and western regions.

 

　　The meeting determined policy measures to deepen reform of the railway investment and financing system and to raise and secure construction funds, mainly including: First, establish a railway development fund to broaden sources of construction funding. Attract social capital investment so that the total size of the fund reaches 200-300 billion yuan per year. Second, innovate the varieties and methods of railway construction bond issuance, issue 150 billion yuan to the public this year, and implement preferential income tax policies for railway bond investment. Third, guide banks and other financial institutions to actively support railway construction and expand the scale of social capital investment. Fourth, for the public-interest and policy-oriented transport tasks undertaken by railways, the central government will provide subsidies within a certain period and gradually establish a standardized subsidy system. Fifth, strengthen overall coordination, ensure the smooth implementation of projects under construction, promptly push for the full start of approved projects, and carry out preliminary work on follow-up projects as soon as possible, so as to ensure steady growth of railway investment and accelerate railway construction.

 

　　Among these, the launch of the railway development fund is regarded as a substantive step in the reform of the railway investment and financing system. The railway development fund plan exclusively obtained by an Economic Information Daily reporter from authoritative channels shows that the railway development fund plans to raise a total of 400-600 billion yuan in 2014 and 2015, with 200-300 billion yuan per year, of which the ratio of central fiscal funds (200 billion yuan from the central budget, 15 billion yuan from the vehicle purchase tax, and 40 billion yuan from the railway construction fund) to social capital is 1:2 to 1:3. On this basis, the railway development fund will attract 400 billion yuan of social capital into the railway sector this year and next.

 

　　The plan shows that the railway development fund adheres to four founding principles. First, adhere to completing the government's planned construction goals, raise funds of a sufficient scale, and meet the capital investment needs of projects stipulated by the state.