China to spend $722bn on transport infrastructure: economic boost or distortion?

The Chinese Government has announced 4.7 trillion yuan for roads, railways, metro system, waterways and airports projects.

The reported investment for three years is equivalent to 6.9% of the country's gross domestic product in 2015, and are part of supply-side reforms designed to underpin growth. They are made possible by a raising of the country's fiscal budget deficit for the year. China Business News commented: "We expect that this spending would help... revive the economy. The latest round of funding is likely to benefit industrial and manufacturing sectors, which have dragged down the economy."

But the Financial Times highlighted a warning from "an authoritative figure" about soaring debt levels leading to "systematic financial risks". It commented: "Infrastructure spending served China well when it was growing rapidly but in recent years has resulted in white elephants and economic distortions."

China has already invested heavily in metro-systems, including the world's largest by route-length in Shanghai, whose first line only opened in 1995.