As the Chinese economy continues to grow, many experts consider Fixed Asset Investment to be a leading driver. Rail FAI, in particular, is projected to bring big profits for China’s railroad infrastructure and equipment makers.
2016 will kick off China’s 13th Five Year Plan, which emphasizes urban rail transit and public-private partnerships.
Urban rail transit is expected to reach average annual investment of 701 billion RMB from 2016 through 2020, according to UBS’ 2016 China Rail Outlook report.
UBS believes the total length of China’s railroads could total 73,000 miles by the end of this year alone. Of this, the group speculates passenger-dedicated, high-speed rail lines would pass 12,427 miles.
Since the 10th FYP, FAI surpassed the government’s estimates causing the USB to surmise Beijing will shoot for higher projections this time around.
Rail investment could also benefit from lines extending outside China’s borders under President Xi Jinping’s “One Belt, One Road.” This would facilitate trade and movement across South East Asia, the Middle East and Europe.