China tightens rail approvals as Xi warns on overbuilding, waste and ‘operational’ trouble

China is tightening approvals for intercity railways and urban metro projects due to concerns about debt risks and overbuilding. The National Development and Reform Commission (NDRC) announced new restrictions, including minimum passenger flow requirements for proposed projects and barring new projects in regions with underperforming existing lines. President Xi Jinping has highlighted operational strains at some high-speed rail stations and subway lines. This shift comes as policymakers aim to move away from infrastructure-led growth and towards a consumption-based model. The NDRC's guidance emphasizes sustainable development and aims to prevent local governments from accumulating debt through unsustainable rail projects. For decades infrastructure spending has powered China's economic expansion, but overbuilding, weaker-than-expected passenger demand and rising operating and maintenance costs have increasingly weighed on local government finances.

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