Urban rail transit investment is expected to exceed 3 trillion yuan in the next 10 years

During the "Tenth Five Year Plan" period, highways and ports developed rapidly, and railway construction developed rapidly during the "Eleventh Five Year Plan" period. Urban rail transit will become a rising star in infrastructure investment during the 12th Five Year Plan period.

It is reported that with the gradual acceleration of urbanization, the construction of urban rail transit in China is expected to usher in a golden period of development. With the increase of investment quota, urban rail transit construction is expected to become a new investment hotspot after large-scale railway investment, and a new growth point for infrastructure investment during the 12th Five Year Plan period.

Recently, CICC released a research report stating that "it is expected that in the next decade, the investment in urban rail transit construction in China is expected to exceed 3 trillion yuan

For a long time, the construction of urban rail transit in China has been relatively lagging behind, with the total length, density, and burden of passenger transportation far below the average level. International experience has shown that when a country's urbanization rate exceeds 60%, urban rail transit will achieve high-speed development to solve the problem of traffic congestion in large cities, thereby driving a rapid increase in investment in urban rail transit construction.

According to an analysis by CICC, "The regional characteristics of urban rail transit construction are significant, and key first and second tier cities will significantly benefit." As of now, 36 cities in China have reported their urban rail transit construction plans. From a regional perspective, these cities are still mainly concentrated in economically developed regions such as the Bohai Rim, the Yangtze River Delta, and the Pearl River Delta. In 2020, the proportion of newly added mileage in the three key regions reached over 65%, with cities such as Beijing, Shanghai, Guangzhou, Shenzhen, and Nanjing having relatively large increments.

The earliest urban rail transit in China was not used for public transportation, but rather for combat readiness and not for civilian use. The southern section of Shanghai Metro Line 1, which is truly used to solve urban transportation construction in China, only started sightseeing and trial operation in 1993. Since then, Guangzhou has also started trying to build urban rail transit. As of 2000, only four cities in China, namely Beijing, Tianjin, Shanghai, and Guangzhou, had urban rail transit, with an operating mileage of no more than 163 kilometers.

The rapid growth in the operating mileage of urban rail transit in China after 2002 mainly came from Beijing, Shanghai, and Guangzhou, with one of the reasons for the growth also coming from the iconic events of the Olympics, World Expo, and Asian Games. Before the opening of the Olympic Games, Beijing concentrated on four subway lines, with over 80 kilometers of subway lines. The operating mileage exceeded 70% of the subway lines put into operation in the past 27 years from 1980 to 2007. Shanghai had a total operating mileage of 410 kilometers before the World Expo, ranking first in the world. Guangzhou's operating mileage in 2009 and 2010 will also exceed the total of the past 10 years.

Even so, from the density of urban rail transit and the proportion of urban rail transit passenger volume to the total public transportation passenger volume, the construction of urban rail transit in China is still far from enough.

As of now, according to the planning of 36 planned urban rail transit project cities, from 2009 to 2020, the new operating mileage of urban rail transit will reach 6560 kilometers, and by 2020, the cumulative operating mileage of urban rail transit in China will reach 7395 kilometers. Based on a cost of 500 million yuan per kilometer, 3.3 trillion yuan will be invested from 2009 to 2020, with an annual average of 270 billion yuan. China's urban rail transit construction will usher in a golden decade.

From a regional distribution perspective, as of 2020, the Yangtze River Delta accounted for 25% of the newly added business mileage, the Bohai Rim accounted for 24%, and the Pearl River Delta accounted for 16%. The sum of the three accounted for 65% of the newly added business mileage. At present, 28 cities' rail transit construction plans have been approved by the State Council, and 8 cities have already formulated rail transit construction plans. From the perspective of incremental growth in the next 10 years, cities such as Beijing, Shanghai, Guangzhou, Shenzhen, and Nanjing are among the top.

From the perspective of the industrial chain, the construction of urban rail transit is expected to drive the demand for construction, building materials, and special machinery in the region. It is understood that the entry threshold for urban rail transit construction is relatively high, with high requirements for construction technology and product quality. The market competition pattern is relatively stable. As urban rail transit enters its golden development period, relevant equipment companies and construction enterprises will greatly benefit.