Bank of China to Invest $878 mln in Rail Project

The Bank of China will invest up to 6 billion yuan in a high-speed railway between Shanghai and Beijing. From Reuters:

It said its Hong Kong-based unit, Bank of China Group Investment Ltd, has agreed to buy a 4.5 percent stake in Beijing-Shanghai High-Speed Railway Co using foreign currencies, “The investment is expected to generate reasonable return and will help the bank diversify its services,” the Beijing-based lender said in a statement to the Shanghai Stock Exchange.

“It will also help the bank win more businesses in China’s large-scale railway investment and construction, which is in line with our development strategy.”

China last year unveiled a $586 billion, infrastructure-focused stimulus package that boosted railway investment by 67 percent in 2009. Beijing will continue to boost railway investment, which had lagged economic growth in the past decade.

Planned investment in the 1,318-kilometre-long high-speed railway linking Beijing and Shanghai totals 220.9 billion yuan. The project, which started in April, 2008, will be completed within five years.

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