Study on Fund Raising Means for China’s Railways

The existing financing resources of construction fund for China’s railways are presented in the first section of this paper. In the next section, The impacts and restrictions of the funding raising means were analyzed and a proposal of reforming the existing financing means was raised on the base of these analyses. The proposal included the following contents: construction funds for the railroads with different functions should be raised by using different financing means. The paper focused on means of fund raising for regional railway construction projects. It stated in detail how this kind of projects would attract social capital by relying on government supporting policies through the reform of the railway system. For instance, what kinds of projects are possible to attract direct international investments; what kind of projects can use BOT method and how to introduce it; what countermeasures should be taken for the deficit breach lines, etc. I.Existing financing means of the railways of China I.1 Existing situation Along with the rapid growth of China market economy, the means of financing on China infrastructure fields has been greatly reformed. In contrast with them, just a little change happened in the railways. At present, the Ministry of Railways of China performs both functions of the government and enterprise and the financing means of the railways basically follows the old pattern of the planning economy. The investment decisions, such as which railway should be built, are solely made by the central government, but a little change than the past is different source of the capital of railway construction, which was shifted from the government’s financial allocation to construction fund raising by the Ministry of Railways. The capital of railway construction comes mainly from surcharges of the freight tariff collected from shippers by railway enterprises and from loans borrowed from banks, and, the loans are unified borrowed and repaid by the Ministry. Actually, a chain of railway construction can be divided into three parts: the Ministry of Railways, an organism combining both functions of the government and