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The Trillion RMB Question: How Can China Fund its Sustainable Urban Transport Growth?

This piece was co-authored with Daniel Bongardt, Transport Policy Advisor with the German Technical Cooperation (GTZ).

China—especially its cities—has embraced sustainable transport in a big way. The Ministry of Housing and Urban-Rural Development recently urged Chinese cities to increase the number of travelers using non-motorized transportation to at least 50 percent by 2015. The country has been undergoing the most rapid expansion of urban rail systems in world history, and it leads Asia in bus-rapid-transit (BRT) and busway implementation. Plus, dozens of cities are expanding non-motorized transport. Hangzhou, for example, has built up the largest public bike program in the world, accumulating 65,000 bicycles in fewer than two years.

But while China leads the developing world in sustainable urban transport expansion, the country faces great challenges when it comes to financing the construction, maintenance, and operation of new and existing public urban transport projects.
The Great Challenge of Funding Sustainable Transport Projects in Chinese Cities

China lacks dedicated funding structures for planned public transit, biking, and walking facilities—at both the national and local levels. The Ministry of Transport provides funding only for inter-city highway projects, acquiring this revenue from gasoline taxes and vehicle registry fees. Local governments, which are often in charge of urban public transport development, currently support metro or BRT construction through per project-based funding, mainly via land leasing and local loans–neither of which is sustainable.

At the same time, the country’s sustainable transport costs are projected to skyrocket: The planned construction of 2,500 km of metro rail lines across 28 cities by 2015 will cost $186 billion, without accounting for the $8-10 billion required for BRT and non-motorized facilities.
What China Could Learn from Other Countries to Solve the Transportation Funding Dilemma?


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