China’s economy is witnessing a downturn, especially in the real estate market, leading to a financial crisis for local governments that heavily rely on real estate revenue. Numerous infrastructure projects are left incomplete as a result. In Guangxi, the unfinished railway bridge project has left bridge piers that have become “heritage sites,” with some being dismantled at enormous costs. In the remote mountains of Guizhou, two abandoned tunnels have been discovered, containing two heavy trucks. Despite this, local authorities across China are still promoting new large-scale infrastructure projects through debt financing.
In Liuzhou, Guangxi Autonomous Region in southern China, a railway project was initiated in December 2016, with the original plan for it to be operational this year. The total estimated cost of the project was 12.6 billion yuan, but construction was halted as early as 2021, leaving only bridge piers and stations. Despite the establishment of the Liuzhou Rail Transit Group in March 2017, the planned rail network in the city comprising seven lines and multiple stations totaling approximately 226.8 kilometers has yet to commence operations.
Former senior officials in Liuzhou responsible for the abandoned Light Rail Transit project, including former Secretary Zheng Junkang and Mayor Wu Wei, have been held accountable for the project’s failure. Wu Wei was sentenced to death with a reprieve in his first trial last year, while Zheng Junkang received a 16-and-a-half-year prison sentence. Both officials served as Secretary of Liuzhou in different periods. Among Wu Wei’s charges was directing the unauthorized construction of the Liuzhou Urban Rail Transit project through debt financing between 2016 and 2021.
Reports indicate ongoing efforts to dismantle certain railway bridge piers, although recent videos suggest that some of these bridge piers in Liuzhou are yet to be completely dismantled. Local residents have expressed frustration over the stalled railway projects which have become obsolete and a waste of resources, with some dubbing them as “heritage sites.”
Similar scenarios of unfinished projects are being reported in Guiyang, the capital city of Guizhou Province, with revelations of the T2 Light Rail project being another image of incomplete construction. The city had plans for a 12-kilometer ring road connecting the city center and a new development area with an estimated cost of 5.2 billion yuan. However, with the real estate market downturn leading to a drastic decline in revenue, the local government lacks the funds to continue construction.
In light of the economic downturn, local governments in China have resorted to debt financing to support infrastructure development, leading to a significant accumulation of debt. Various reports have shed light on the mounting challenges faced by local governments in repaying debts amid reduced land sale revenues and escalating financial risks.
Experts have criticized the Chinese government’s approach to infrastructure projects, citing lack of feasibility studies and disregard for market demand. The excessive focus on large-scale construction projects is seen as a means to boost GDP and political achievements rather than addressing actual societal needs. The government’s aggressive infrastructure push has resulted in numerous abandoned public projects, despite efforts to inject additional funds and directives from central authorities to accelerate construction.
The issues extend beyond high-speed rail to canal projects, with substantial investments being made in this sector despite financial constraints faced by local governments. The zeal for canal construction, ostensibly for economic development, raises concerns about the sustainability of such mega projects in regions reliant on financial aid from other provinces.
The ambitious Xiong’an New Area project, highlighted as President Xi Jinping’s millennium initiative, has faced criticism and skepticism for its exorbitant costs and delayed progress, with the project occasionally being labeled as another unfinished endeavor. Efforts to relocate government offices to the area have not garnered the anticipated response, raising doubts about the effectiveness and necessity of the project.
The grand infrastructure ventures in China, despite claims of serving economic development needs, have drawn skepticism from experts and the public regarding their sustainability and the true motives behind their implementation. As China grapples with economic challenges and mounting debts, the completion of these massive projects remains a subject of debate and scrutiny among stakeholders.