China’s
state-owned rail corporation is more than $600 billion in debt, reports said,
almost twice the size of Greece’s obligations.
But according to a recently released
financial report, it owed 4.14 trillion yuan ($614 billion) at the end of
April, said respected financial portal Caixin.
In comparison, Greece, whose debt crisis has
threatened the eurozone and needed repeated bailouts, had an estimated public
debt of 311 billion euros ($356 billion) at the end of last year, according to
the European Union’s Eurostat.
CRC’s borrowing increased by over eight
percent year-on-year, the numbers showed, a rise driven by the country’s fever
for expanding the network of super-fast trains, a point of national pride. But
China has seen a decline in rail freight, a major source of CRC’s revenue, the
Global Times newspaper reported Thursday.
The debt number “keeps growing”, Zhao Jian
of Beijing Jiatong University told the paper, adding: “This business model
isn’t sustainable.” Company losses rose 35 percent year-on-year to 8.73 billion
yuan in the first quarter, the paper reported.
China is struggling to move its economy away
from its dependence on massive construction projects and exports as the main
drivers of growth. But the country’s addiction to massive infrastructure
injections to fuel GDP expansion has proven hard to shake.
Rail, in particular, has continued to absorb
huge amounts of capital as Beijing continues to push its ultra-modern train
system into sparsely populated western regions. China’s economy, a vital driver
of global expansion, grew 6.9 per cent last year, its weakest rate in a quarter
of a century.
Πηγή: financialexpress.com
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