China is speeding up investment in rail this quarter as it struggles to meet its full-year target, National Business Daily reported Tuesday, citing government sources. The National Development and Reform Commission has approved the construction of several rail lines, including one linking Shangqiu in Henan and Hefei in Anhui to Hangzhou in Zhejiang, a project that had been shelved for five years, the paper said. China aims to pump 690 billion yuan (US$112.38 billion) into rail construction this year but less than half of that investment target has been met. One of the problems is that bonds are the only source of funding. China Railway Corp. announced on Monday that it will issue 20 billion yuan worth of bonds to fund rail construction. Excluding the new issuance, the company holds more than 700 billion yuan in undue bonds, with interest payments of around 33 billion yuan per year, according to the report.
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