China Tightens Intercity Rail Project Approvals Amidst Debt and Efficiency Concerns

BEIJING, January 2026 — China is implementing stricter oversight on approvals for intercity railways and urban metro systems, signaling a significant shift in its long-standing infrastructure investment strategy. This move is driven by a national effort to manage debt risks and rebalance the economic growth model towards consumption, impacting the pace and nature of fixed-asset investment in the transport sector.

Key directives from the National Development and Reform Commission (NDRC) now prohibit the covert construction of high-speed rail or metro lines under the guise of intercity projects. Proposed intercity rail lines must demonstrate a projected annual two-way passenger flow of at least 15 million trips. Furthermore, regions whose existing lines fail to meet half of their forecasted passenger volumes within five years, or achieve cash-flow break-even within a decade, will be barred from initiating new projects.

These measures are expected to place greater scrutiny on the financial viability and operational sustainability of new rail infrastructure. The tightening of approval processes aims to curb redundant spending and address the growing burden of operating and maintenance costs on local government finances, which have been strained by decades of rapid, large-scale development.

President Xi Jinping has publicly highlighted concerns regarding operational strains and potential waste within existing high-speed rail and subway networks. This regulatory tightening reflects a broader policy objective to ensure that infrastructure development is not only expansive but also economically sound and efficient in its long-term operation.

The recalibration of rail project approvals underscores a regional trend towards more sustainable development practices and prudent fiscal management. As Asian economies mature, the focus is increasingly shifting from sheer capacity expansion to optimizing existing assets and ensuring new projects deliver tangible economic and social returns.