Workers at the China National Convention Center in Beijing prepare to transport a locomotive of the domestically developed "Harmony" bullet train to the square outside the center on Saturday. The locomotive will be part of a technological achievement exhibition that opens on Monday. Luo Xiaoguang / Xinhua
BEIJING - China's financial regulators said on Saturday that they have demanded that all mainland banks to check the possible loan risk related to high-speed railway projects, as the Party discipline watchdog and government supervision authority are investigating the former railway minister on charges of corruption and other misconducts.
Yan Qingmin, assistant chairman of the China Banking Regulatory Commission, told China Daily on the sidelines of the annual session of the National People's Congress that the top financial watchdog has noticed the possible loan risk to the country's aggressive railway construction and asked all the banks to check the credibility of their loans to the construction of new railway lines.
But he said these banks will not tighten their money supply for future construction of the country's express passenger transport railway network, which will reach a total length of 45,000 kilometers by 2015, according to China's 12th Five-Year Plan (2011-2015).
Yan's remarks came as China widened its probe into the corruption in the Ministry of Railways, which dominated the country's drive to build a multi-billion-dollar high-speed railway network across the country.
On Feb 25, Liu Zhijun, the former railway minister, was removed from his post after he has been investigated for alleged corruption in one of the highest-reaching graft probes in years. The ministry's former deputy chief engineer, Zhang Shuguang, was also replaced on Feb 28 and he is under investigation for allegedly taking bribes.
The moves have raised great concerns over China's aggressive high-speed railway construction during the past few years, as many of the projects were backed by loans from many Chinese banks.
From 2005 to 2010, China has invested 1.98 trillion yuan ($301 billion) in railway construction, six times more than the investment made in the previous five years, according to figures from the National Bureau of Statistics. The Ministry of Railways said last year that it planned to invest 700 billion yuan each year in the next five years in high-speed railway construction.
Yan said most of the high-speed railways projects are still very healthy in terms of profitability and return of investment. He said mainland banks are still giving financial support to new projects.
Li Lihui, president of Bank of China, confirmed with China Daily on Saturday that the bank will continue to give loans to new high-speed railway projects.
According to the new five-year plan, China will establish a nationwide high-speed railway network that covers almost all cities with population of more than 500,000. The construction of a railway linking the Tibet autonomous region and Southwest China's Sichuan province will be taken into consideration, said the document.
Bao Chang and Zhou Yan contributed to this story.
(China Daily 03/06/2011 page4)