Debt-ridden Wuhan to spend $329b in 5 yrs

( chinadaily.com.cn )

Updated: 2014-02-19

Wuhan will invest 2 trillion yuan ($329 billion) in urban construction over the next five years, China Business News reported.

Wuhan Mayor Tang Liangzhi recently told BBC that 2 trillion yuan will be spent on a major redevelopment plan to transform Wuhan, capital of Hubei province, into a megacity.

China Business News said Wuhan spent 130 billion yuan on infrastructure in 2013 to build roads and highways, create more storage facilities for the city’s postal service and expand the postal service to make it more efficient. It also spent 190 billion yuan on real estate development.

This year, the city plans to spend more than 150 billion yuan on urban construction and about 200 billion yuan on real estate development. The investments will go toward the ongoing construction of apartment blocks, roads, bridges, railways, a subway system and a second international airport.

Observers said they are worried that the large amount of spending on urban construction could further burden the city government, which is already shouldering the highest debt among city governments in China. According to the Ministry of Finance, the Wuhan government had a debt of 204 billion yuan by the end of June 2012.

Wuhan is not the only city investing huge sums of money on urban construction. The newspaper reported that about 10 cities have invested more than 100 billion yuan annually in urban construction.