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China Daily Website

Local railway gets private-capital investment

Updated: 2013-03-20 18:42
By Zheng Yangpeng ( chinadaily.com.cn)

A Xinjiang local railway corporation has received an investment of private capital for the first time after China's Ministry of Railways was dismantled last week.

A railway corporation was set up in Qapqal Xibe Autonomous County, a county bordering Kazakhstan, the National Business Daily reported on March 19.

The joint venture's registered capital was 50 million yuan ($8 million), half of which is from private investors.

This is the first private investment in a railway since the establishment of the China Railway Corp.

The State Council on March 14 approved the establishment of China Railway Corp, with registered capital of 1.04 trillion yuan ($167.4 billion), after its former administrative body was spun off and merged into the new Ministry of Transport.

The reform aims to reduce bureaucracy and separate commercial operations and regulations, a holdover from China’s former mandate economy.

Zhao Jian, a professor with Beijing Jiaotong University, said China’s railways, both main routes and branch routes, are monopolized by the State, and there were not many cases of private participation in branch routes.

But experts played down the significance of the new Xinjiang company, as the railway is an unimportant branch route and is not of much interest to private investors.

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