China’s unprecedented railway spending boom will continue for at least another 15 years and see its high-speed network nearly double in length, China Railway Group, the state-owned railway builder, said in a new blueprint. Under the plan, China will construct about 200,000 km of railways by 2035, a milestone year in which the nation is set to achieve President Xi Jinping’s vision for becoming a “modern socialist country”. That will mean a 41% increase in rail lines criss-crossing the country, up from the 141,400 km today, including about 70,000 km of high-speed tracks that will be able to accommodate trains running at speeds of more than 250 km/h. China had roughly 36,000 km of high-speed rail lines at the end of July, accounting for more than two-thirds of the global total.

State-led spending on railways has been an important part of China’s growth story for more than a decade. In the first half of 2020, fixed-asset investment (FAI) in railways rose 1.2% from a year earlier to CNY325.8 billion, even though China’s overall FAI fell 3.1% over the same period. China’s high-speed railway boom started in 2008 as part of stimulus measures to mitigate the global financial crisis. While China’s stimulus spending has ebbed since, the railway construction boom has been largely uninterrupted, despite the deadly Wenzhou train crash in 2011, the conviction of former Railway Minister Liu Zhijun on corruption charges, and growing debt in the sector. Extending the railway network is a long-term strategy to bind the vast country together into a single market.

Larry Hu, Chief China Economist with Macquarie Capital, said the blueprint reflects Beijing’s intention to sustain domestic growth with infrastructure spending. “China’s economic growth has three pillars: exports, property and infrastructure investment,” Hu said. “Exports can no longer be relied upon, and property speculation will be curbed, so infrastructure investment is the last pillar that shouldn’t fall.” China has also started to export its high-speed railway technology and expertise, especially to countries taking part in the Belt and Road Initiative (BRI). President Xi Jinping’s slogan of fuxing (rejuvenation) has been used to name the next-generation bullet trains that are set to completely replace the hexie (harmony) series built under former President Hu Jintao. While China’s railway system is heavily indebted on the whole, some of the high-speed railway lines, including the one connecting Beijing and Shanghai, have already started seeing operating profits. This offers hope that China’s high-speed railway lines can be financially sustainable as long as there is enough market demand.

Under the new blueprint, all towns with at least 200,000 residents will be connected to the railway system by 2035, while every city with more than half a million residents will have access to high-speed railway lines. Even China’s most remote cities, such as Kashgar in Xinjiang and Shigatse in Tibet, will be linked with high-speed railway services by 2035 according to the plan. Shen Jianguang, Economist at JD Digits, said “that migrant workers from central and western regions are more willing to take jobs in nearby cities instead of flocking to the coastal areas. If you look at places such as Xian and Lanzhou, these western cities are emerging as regional economic hubs. “It is a blueprint for 2035, when China will be much richer and more prosperous than today. It makes sense to connect every city with half a million people into the high-speed railway network.” China Railway Group said the country will deploy a range of critical and core technology by 2035, including special materials for tracks, and intelligent operating systems in trains, the South China Morning Post reports.

The Global Times adds that China Railways will use the Beidou Navigation System and 5G network in the train control system, increasing the accuracy of positioning, guaranteeing stronger security, and improving transport capacity by more than 30% as trains could travel closer together. When the new train control system is adopted, a round trip on the Beijing-Shanghai high-speed railway could save about 9,000 kilowatt-hours of electricity. China Railway also vowed to make railway technologies self-sufficient by improving the independent innovation capacity and modernization of the railway industry chain. The construction of smart high-speed railways will be completed first. In July, China’s railway cargo shipments continued to grow, reaching 320 million tons, up 24.66 million tons or 8.5% year-on-year. In 2019, the number of railway passengers transported reached 3.66 billion, and freight transport topped 4.32 billion tons, an increase of 93.3% and 10.6%, respectively, compared with 2012.