China Railway Corporation (CRC) is expected to raise freight rates early this year in order to relieve its massive debt burden and speed up market-oriented reform in the industry, in which it has the monopoly.
Such a move may further reduce the competitiveness of rail against road freight, which has rapidly overtaken it in market share.
The rail freight rate in China may rise from 0.12 yuan (15.2 HK cents) per tonne per kilometre to an average of 0.15 yuan, which the railway operator said would be “more reasonable”.
“Freight services are a major source of income for the railway operator. However, the freight rate has long been under the market value,” said Li Hongchang, a railway expert and economics professor at Beijing Jiaotong University.