While railway-development projects have contributed to overall economic growth overall in China, Nigel Cory, associate director at the Information Technology and Innovation Foundation, a US-based think tank, said that Chinese subsidies for industrial rail development have become more wasteful as the sector and its network have expanded, leading to a large build-up of debt.
“This has become clearer in terms of industrial overcapacity and network development to markets (Chinese cities), whereby high-speed rail will likely never be profitable,” Cory said.
