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Financing new metros—The Beijing metro financing sustainability study

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  • Chang, Zheng

Abstract

China invested intensively in metro system to accommodate its urbanization since 2000. This research seeks to understand how local governments finance these investments and whether the current financing strategies are likely sustainable for many years to come. This study discusses the nature of metro financing mechanism and uses Beijing׳s metro system as a case to examine the financing sustainability. By calculation, Beijing government faces immediate financial challenges in 2012 and 2013 as the metro expenses are around 10% of government׳s revenue. The financing sustainability is largely influenced by the local land leasing revenue. If property values collapse, financial sustainability could be a serious problem in the future.

Suggested Citation

  • Chang, Zheng, 2014. "Financing new metros—The Beijing metro financing sustainability study," Transport Policy, Elsevier, vol. 32(C), pages 148-155.
    • Handle: RePEc:eee:trapol:v:32:y:2014:i:c:p:148-155
    DOI: 10.1016/j.tranpol.2014.01.009
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    Cited by:

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    2. Dongsheng He & Guibo Sun & Ling Li & Chris Webster, 2024. "New metro and housing price and rent premiums: A natural experiment in China," Urban Studies, Urban Studies Journal Limited, vol. 61(7), pages 1371-1392, May.
    3. Xu, Tao & Zhang, Ming & Aditjandra, Paulus T., 2016. "The impact of urban rail transit on commercial property value: New evidence from Wuhan, China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 91(C), pages 223-235.
    4. Zheng, Longfei & Long, Fenjie & Chang, Zheng & Ye, Jingsong, 2019. "Ghost town or city of hope? The spatial spillover effects of high-speed railway stations in China," Transport Policy, Elsevier, vol. 81(C), pages 230-241.
    5. Jiechao Zhang & Xuedong Yan & Meiwu An & Li Sun, 2017. "The Impact of Beijing Subway’s New Fare Policy on Riders’ Attitude, Travel Pattern and Demand," Sustainability, MDPI, vol. 9(5), pages 1-21, April.
    6. Chang, Zheng & Zheng, Longfei & Yang, Tianren & Long, Fenjie, 2022. "High-speed rail, new town development, and the spatial mismatch of land leases in China," Land Use Policy, Elsevier, vol. 115(C).
    7. Zheng, Longfei & Chang, Zheng & Martinez, Andrea González, 2022. "High-speed rail, market access, and the rise of consumer cities: Evidence from China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 165(C), pages 454-470.
    8. Chang, Zheng & Phang, Sock-Yong, 2017. "Urban rail transit PPPs: Lessons from East Asian cities," Transportation Research Part A: Policy and Practice, Elsevier, vol. 105(C), pages 106-122.
    9. Zhao, Jianfeng & Liu, Henry J. & Love, Peter E.D. & Greenwood, David J. & Sing, Michael C.P., 2022. "Public-private partnerships: A dynamic discrete choice model for road projects," Socio-Economic Planning Sciences, Elsevier, vol. 82(PA).
    10. Yinghan Zhu & Liudan Jiao & Yu Zhang & Ya Wu & Xiaosen Huo, 2021. "Sustainable Development of Urban Metro System: Perspective of Coordination between Supply and Demand," IJERPH, MDPI, vol. 18(19), pages 1-24, September.
    11. Yunqiang Xue & Hongzhi Guan & Jonathan Corey & Heng Wei & Hai Yan, 2017. "Quantifying a Financially Sustainable Strategy of Public Transport: Private Capital Investment Considering Passenger Value," Sustainability, MDPI, vol. 9(2), pages 1-20, February.

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