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Govt support to boost urban rail in China: Moody's

2014-09-25 07:54 Xinhua Web Editor: Qin Dexing
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Strong support from local governments will be the key to the country's goal to invest in city metro networks, said a Moody's report on Wednesday.

"China has massive investment targets in city metro systems, which are key to the country's urbanization plans and air quality goals," said Ivan Chung, a Moody's senior vice president.

"The government-owned city metro companies are likely to receive very high extraordinary support from their respective local governments," Chung said.

City governments with proposed projects should have adequate resources to support their city metro companies given the central government only approves construction in cities with solid economic development and large populations, the report said.

In addition to financial support from the government, the city metro companies also rely on the credit market to support their large investments.

A key credit strength that enables these companies to access the credit market at low cost is investor perception that the companies will continue to enjoy implicit and explicit government support, it forecast.

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