China’s National Development and Reform Commission (NDRC) will raise the revenue requirements of local governments looking to build railways, sources told Caixin Global, with the aim of stemming the growth of regional debt.
Local authorities will now have to provide data on their fiscal revenue, GDP growth, and debt ratio before the central government approves the construction of railway and subway networks.
The new guidelines are expected to replace the 81 Document, which permitted local governments to build new railways upon meeting baseline conditions such as a GDP of RMB 100 billion and population of 3 million.
Under the proposed system, fiscal and GDP requirements will likely triple, meaning that cities will not be inclined to borrow more to fund the projects, but instead rely on their own economic strength.
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