Under the pressure of massive debt, the spin-off of the former Ministry of Railways' state owned company China Railway Corp is set to issue bonds to finance railway investment.
CRC said on May 16 it would issue CNY 20 billion of five year notes on May 23. The company plans to issue CNY 150 billion of bonds this year for railway construction projects.
The CRC was established on March 14, following State Council reforms to break up the Ministry of Railways. The company's first quarter report showed total assets at CNY 4.56 trillion and gross liabilities at CNY 2.84 trillion.
The CRC is looking to attract private capital following recent State Council policy notices. Private capital will be permitted in railway branch lines, inter-city railways and lines for coal or other resources transportation.
Mr Sun Xu ratings analyst at China Credit Rating Co said it remains unclear how proprietary rights and financial settlements for joint-venture trunk railway lines will be defined, a lingering uncertainty for investors.
Local governments have also begun to diversify financing channels for railway infrastructure projects. Gansu and Guangdong Provinces have introduced preferential policies to encourage private capital to invest in infrastructure construction.
So far, several railway lines such as a line in Xinjiang Uyghur Autonomous Region linking Hongliuhe to Zhuomaohu have received private investment.