Beijing hits brakes on subway boom over debt concerns

Above, a train platform inside a station on the Subway Line Number 1 in Beijing. China has been in the grips of a metro-building binge with more than 50 cities working on over 1 trillion yuan worth of projects. (Reuters)
Updated 15 November 2017
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Beijing hits brakes on subway boom over debt concerns

SHANGHAI: China has hit the brakes on subway projects in at least three cities and Beijing is asking others to slow down their plans, local governments and media have reported, indicating concerns over high debt from city-level infrastructure spending.
China has been in the grips of a metro-building binge with more than 50 cities working on over 1 trillion yuan (SR560 billion) worth of projects, after population restrictions were loosened last year to allow more cities to have metro systems.
Such infrastructure spending has helped to shore up economic growth but is now being scrutinized more closely after the government pledged to clamp down on financial risks. Policymakers have warned about the risk of asset bubbles due to high levels of corporate and household debt in the economy.
China’s overall debt has jumped to more than 250 percent of GDP from 150 percent at the end of 2006.
Financial magazine Caixin, citing unnamed sources close to the matter, reported that authorities in Inner Mongolia’s Hohhot and Baotou cities have scrapped approved projects worth billions of dollars in recent months due to concerns over finances.
Xianyang city which wants to build six lines to link up to central Shaanxi province’s capital of Xi’an, said in a statement this month some of its plans had not yet been approved by the state planner, the National Development and Reform Commission.
“The NDRC has become more cautious about approving metro construction plans and it will be difficult to achieve approval within the year,” it said, adding that one of the factors was debt concerns over the Baotou metro.
The Economic Observer newspaper said it was told by the Wuhan city planner that the NDRC was re-evaluating the country’s subway construction situation.
The Baotou city planner declined to comment when contacted by Reuters on Wednesday. The NDRC and authorities in Hohhot and Wuhan did not immediately respond to requests for comment.
Guotai Junan analyst Gary Wong said such a crackdown on metro projects was appropriate given that many remote and financially weak cities had undertaken metro projects. He said he did not anticipate a large impact on locomotive suppliers such as CRRC Corp. who have shifted focus to metros to offset the slowing high-speed rail market.
“They are already full with orders, even if they don’t get new orders at the moment they will still be busy for the next 2-3 years,” he said.
China would overtake Europe and the Americas if all 50 cities went ahead with their metro plans, data from the International Association of Public Transport showed. Europe has 46 cities with metro systems, and America has 33 cities.
The China Association of Metros said in July that 30 cities currently have metros.


Russian ‘agent’ held on charges of seeking to infiltrate US govt

Maria Butina. (REUTERS)
Updated 24 min 54 sec ago
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Russian ‘agent’ held on charges of seeking to infiltrate US govt

  • Maria helped arrange visits by Torshin and other Russian officials to major political events
  • The arrest was announced Monday hours after Trump finished a summit and a press conference with Putin in Helsinki

WASHINGTON: A Russian gun rights enthusiast who built a network of powerful Republican contacts under the direction of a Kremlin power-broker was ordered held without bond Wednesday after FBI counterintelligence agents accused her of conspiring to infiltrate the US government.
US prosecutors said Maria Butina, 29, exploited her close links with the powerful NRA gun lobby while posing as a visiting graduate student to endear herself with senior Republicans, guided by one of Russian President Vladimir Putin’s major political supporters, Alexander Torshin.
Butina was charged in the Washington federal court with acting illegally as an unregistered agent for the Russian government while she lived in Washington over the past three years with her boyfriend, a veteran Republican operative.
They called Butina a “covert Russian agent” who maintained contacts with Russian spies and pursued a mission “to penetrate the US national decision-making apparatus to advance the agenda of the Russian Federation.”
That included offering sex to get a job in a US lobbying group, according to documents filed in court by the Department of Justice.
Butina pleaded not guilty to two criminal charges of conspiring to act as a foreign agent without registering, and acting as a foreign agent. The first charge brings a maximum five years in prison, while the second carries a maximum 10 years.
“This is not a spy case,” her lawyer Robert Driscoll said after Butina appeared in court in an orange jumpsuit.
“The government is speculating that someone is a Russian spy, but thousands of Russians met intelligence operatives” in the United States, he said.

Butina’s arrest Sunday added to the political turmoil in Washington over Russia’s meddling in the 2016 presidential election and allegations that President Donald Trump’s campaign collaborated with the Russians.
The arrest was announced Monday hours after Trump finished a summit and a press conference with Putin in Helsinki, Finland, where the US leader rejected the US intelligence community’s verdict that the Russians meddled to support him over Hillary Clinton in the 2016 race.
Trump reversed that stance a day later under heavy attack from US politicians of both parties.
FBI agents described a long-term operation stretching back as far as 2011 when Torshin met then-National Rifle Association president David Keene and Butina launched a mirror Russian gun rights group named The Right to Bear Arms.
She befriended the Republican operative, unnamed in the indictment but widely identified as Paul Erickson, 56, who opened doors to NRA and Republican circles.
Butina began visiting the United States and was regularly hosted by the NRA and other groups, and became a “life member” of the American gun rights lobby.
Pictures of her meeting prominent Republican governors and congressman, and the powerful leaders of the NRA, are splashed across her social media accounts.
In July 2015, Butina was selected to ask Trump a question about his plans for ties with Russia at a rally in Las Vegas.
“I believe I would get along very nicely with Putin.... I don’t think you’d need the sanctions,” he said, in possibly his first campaign trail pronouncement on the issue.
Her activities ramped up after she moved to the US capital on a student visa in 2016, attending American University graduate school while she lived with Erickson.
Hardly masking her networking efforts, she told colleagues at the school that she had a nearly direct line to Putin.
She helped arrange visits by Torshin and other Russian officials to major political events like the National Prayer Breakfast, as they sought to construct a “back channel” with sympathetic, influential Americans.
Meanwhile Erickson, citing his Russian connections, tried to arrange a meeting between Putin and Trump in early 2016.
And that year Butina reportedly met Trump’s son Donald Trump Jr. at a private dinner in Louisville, Kentucky during the NRA annual convention.

The FBI’s investigation of Butina began before the probe led by Special Counsel Robert Mueller into possible collusion between the Trump campaign and Russia, and the indictment did not involve Mueller’s team.
But the two investigations clearly overlapped, and Butina has already been interviewed by the Senate committee studying Russian meddling.
On Wednesday Moscow said the arrest was a political move seeking undermine the gains of the Helsinki summit.
“This happened with the obvious task of minimizing the positive effect,” of the Trump-Putin meeting, said foreign ministry spokeswoman Maria Zakharova.
“There is an impression the FBI is simply carrying out a clearly political order,” she said.