China’s state railway giant renamed CR
SHANGHAI: China renamed and restructured its national railway corporation as part of its efforts to make the country’s government-owned enterprises run in a more market-oriented fashion, its state-run railway group said yesterday.
China State Railway Group (CR) said on its official WeChat account that it had changed its name from China Railway Corporation (CRC), and was now a state-owned enterprise with registered capital of 1.7 trillion yuan ($245.46 billion).
The company, which oversees the management of China’s sprawling railway network, said it would have a corporate structure with a board of directors and the Ministry of Finance would perform investor duties at the company.
“This is a major initiative aimed at deepening the reform of the railway system, establishing a modern enterprise system, and promoting market-oriented operations,” CR said in a statement on its website.
CRC was created after China’s former Rrailway Ministry was dissolved in 2013 and has been central to Beijing’s efforts to use infrastructure investment to support a slowing economy.
State-backed newspaper Shanghai Securities News reported in February that the debt of CRC reached 300 billion yuan in 2019, compared with 240 billion yuan in the previous year.
“The announcement is unlikely to have an immediate impact on China’s railway sector but could eventually help ease the financial pressure it faces to meet government expansion targets,’’ said Ada Li, a vice-president at ratings agency Moody’s Investors Service.
“The more commercially-oriented set-up provides the foundation to improve governance and will help facilitate social capital to take part in rail investments, which will be positive for the sector in the long run.”
Guotai Junan analyst Gary Wong said the company had a substantial amount of assets such as older rail car maintenance facilities scattered across its numerous bureaus and the new structure could help centralise its management of such properties.
Financial magazine Caixin reported last year that CR plans to eventually list Beijing-Shanghai High-Speed Railway Co, operator of one of the country’s busiest rail lines, although it has yet to decide on a time frame.