China will spend 5 trillion yuan (US$730.6 billion) until 2020 to add 41,000 km (25,480 miles) to its already big rail network, state media said, as the government tries to boost domestic demand and ease strains on a jammed system.

The latest edition of Outlook Weekly, published by Xinhua News Agency, cited Deputy Railway Minister Lu Dongfu as saying the new railways would help promote economic growth, ease transport bottlenecks and provide at least 6 million jobs.

It did not say how much of the investment was new, and how much had already been approved by the central government, although some of the projects have already begun, such as a high-speed link from Beijing to the commercial capital Shanghai.

"Over the next two years these projects will satisfy urgent transport needs, ease bottlenecks on the railways, promote regional economic development and economic growth," Outlook Weekly paraphrased Lu as saying.

New railways would be built linking major cities, and others would be dedicated to transporting coal in inland provinces and regions including Inner Mongolia and Shaanxi, the report said.

Last month China announced a sweeping 4 trillion yuan economic stimulus package of spending over the next two years, with a large portion of the funds targeting infrastructure projects such as roads and railways.

Beijing wants to boost domestic demand to help offset a slowdown in key export markets in Europe and North America, hoping to generate enough jobs to keep a lid on labor unrest and social instability.

While China has an extensive and increasingly efficient rail network, it is still beset by problems, and many parts of the country have poor or non-existent connections.

Every year during the Lunar New Year, millions of Chinese pack the railways to go home, many standing for hours as seats are so hard to get hold of. Even at normal times it can be hard to obtain a ticket.

The railways are also important haulers of freight and energy supplies such as coal around the country, but sheer volume of traffic can lead to delays and slow delivery.

The government has been spending billions of dollars on transport over the past few decades, and hopes to improve access especially to China's vast and underdeveloped inland regions.

"Once the railways are open, conditions will improve and more trains will be able to run, leading to lower transport costs, shorter travel times for passengers and freight and other direct economic benefits," the report quoted railway planning chief Yang Zhongmin as saying.

"It will also ease communication restrictions, improve the investment environment and have an enormous effect on industrial development," Yang added.

(Xinhua News Agency December 22, 2008)