China’s state planner has approved plans by national operator China Railway Corporation (CRC) to issue 300 billion yuan ($44.91 billion) of bonds, as the country looks to ramp up infrastructure investment to support a slowing economy.
Its fundraising comes as Chinese local governments have embarked on a massive new round of off-balance sheet debt financing with the blessings of Beijing, prompting China sceptics to warn of a potential debt bust.
Two-thirds of the funds raised by CRC will be used for railway construction purposes while the remaining will be used towards debt restructuring, the National Development and Reform Commission said in the statement posted on the website of China Central Depository & Clearing Co. on Tuesday.
CRC will issue the first batch of 170 billion yuan bonds this year, with the money going to projects such as a rail link connecting the northeastern cities of Beijing and Shenyang as well as rail logistic centres, it said.
The company, responsible for constructing and operating China’s sprawling rail network, had liabilities of 4.21 trillion yuan at the end of June, according to its half-year report.
Earlier this month, it said it had spent 306.7 billion yuan in the first six months of the year. It set a 2016 spending target of 800 billion yuan in January.
($1 = 6.6797 Chinese yuan)