China's Major Cities Face Increasing Difficulty in Subway Construction Due to Fiscal and Demographic Headwinds

AI Summary (NQ-processed)

China's local governments are facing fiscal strain and negative population growth, making it harder for even coastal megacities to get approval for new subway projects. Recent plans in Ningbo, Fuzhou, Shenzhen, and Guangzhou have been rejected or scaled back. Ningbo's development and reform commission cited insufficient passenger intensity. Shenzhen's Metro Line 18 was not approved after national evaluation. Guangzhou's fourth phase metro plan may see a reduction of over 100 km, more than 60% of its initial proposal. The tightening approval process, previously limited to smaller cities, now affects major cities due to real estate market adjustments, local government debt, and demographic shifts. Shenzhen Metro reported a 33.46 billion RMB loss by end of 2024, exceeding its profits from the previous five years, partly due to supporting Vanke Group. In August 2024, China's Ministry of Finance issued regulations prohibiting illegal borrowing for unprofitable municipal infrastructure and increasing hidden debt. The 'subway popularization era' from 2000 to 2018 is ending. Passenger shortfalls and declining land sales (4.1518 trillion RMB in 2023, less than half of 2021's 8.7051 trillion RMB peak) are exacerbating fiscal pressures. While new lines may open in the next decade, large-scale, competitive city-to-city subway expansion is unlikely.