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Corruption and Over-Investment in China: Railways and Aviation

According to Wang Mengnu, a  Chinese engineering expert, in the construction of the high speed network “rigged bids and irregularities are the rule rather than the exception.”[1] In 2011 the Railway Minister Liu Zhijun was dismissed, and in July 2013 he was given a suspended death sentence for corruption, it is reported that he was at the centre of scandal which saw about 800m renminbi (£87m) misappropriated.[2]

China has also engaged in a massive airport building programme, Li Jiaxiang, head of the Civil Aviation Administration of China (CAAC), told Reuters that in 2015 China would invest $80 billion in aviation projects. Air traffic is increasing rapidly at some airports, increasing by 12.6% at Chengdu’s Shuangliu airport and 15.8% at Chongqing’s Jiangbei airport.[3] There are, however, examples of over-investment in places where there is little demand, for example the airport at Dachangshan island on China’s north east coast saw less than 4,000 passengers use it in 2013, about 10 a day, following a $6 million refurbishment in 2008. It is planned to spend another $239 million on expanding the airport.[4]

[1] ibid p.20

[2] Coonan, Clifford – “China’s former Railways Minister Liu Zhijun receives suspended death sentence for bribery and corruption”, The Independent, London, 8 July 2013

[3] “China’s aviation boom drives airport building frenzy”, Reuters, 26 June 2015

[4] Goh, Brenda – “Insight – Lovely airport, where are the planes? China’s white elephants emerge”, Reuters, 10 April 2015

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