China has approved new rail projects worth more than $125bn in the past month as it steps up fiscal spending to counteract a slowdown in its economy, a move that could give Beijing more breathing space in its trade confrontation with Washington. The National Development and Reform Commission, China’s top planning agency, has approved urban rail projects in eight cities and regions worth a total of Rmb860bn ($125.3bn) since December 5, according to official statements.
The investment drive comes as Washington and Beijing on Monday began their first face-to-face talks since Donald Trump and Xi Jinping agreed on a trade truce at the G20 Summit in Buenos Aires late last year. It also highlights Beijing’s fears about slowing growth, with official data last week showing the first monthly contraction in manufacturing activity since 2016, and China’s central bank issuing its largest cut to bank reserve requirements in over a year.
China will add 6,800km of rail lines this year, a 40 percent increase from the amount added last year, the state-run China Railway Corp said. The plans include 3,200km of high-speed rail. The surge in project approvals is in dramatic contrast with the beginning of 2018 when Beijing abruptly canceled subway lines in several cities to slow the growth of local government debt.