China's toll roads have stacked up a debt pile of 4.45 trillion yuan ($666.96 billion), with almost 80 percent of their annual income last year going to repay loans, the transport ministry said, as the country accelerates road building.
China’s toll roads have stacked up a debt pile of 4.45 trillion yuan ($666.96 billion), with almost 80 percent of their annual income last year going to repay loans, the transport ministry said, as the country accelerates road building.
Beijing has cranked up state spending on infrastructure to support economic growth as private sector investment falters, and efforts to lure investors into private-public partnerships to build projects such as toll roads have had few successes.
The ministry published the 2015 figures late on Tuesday in a report that comes as global investors express growing concern over China’s overall credit, much of which has gone to build infrastructure.
The toll road network’s debt grew an annual 15.7 percent last year, far outpacing income growth of 4.6 percent, the ministry said in the report.
“Although China’s toll road debt is relatively large, this is just a phase,” state newspaper the People’s Daily quoted Sun Yonghong, an official of the ministry’s highway division, as saying. “In the long run, the risks are controllable.”
About three-quarters of 2015 revenue of 409.78 billion yuan went to paying down debt and interest, as banks sought payment of the principal one year after project completions, Sun said.
Toll roads make up less than 4 percent of China’s road network, which stretches 4.5 million km (2.8 million miles).
Sun said much of the debt was incurred to build expressways, and accumulation would slow as the road network matured.
Almost 40 percent of China’s expressways were built between 2010 and 2015, at a cost of 3.32 trillion yuan, about 2.23 trillion yuan of which was paid through loans, he said.
China’s debt has soared to 250 percent of gross domestic product and the Bank for International Settlements warned on Sunday that a banking crisis looms in the next three years.