For Chinese officials struggling in the face of both bottom-up dissatisfaction at increasingly congested roadways and top-down pressure to cut carbon emissions, expanding public mass transit systems like subways probably seemed like an ideal solution.

This June, however, local officials in the central province of Hunan finally confirmed what has long been speculated in transportation policy circles: China’s central government has suspended all applications for new subway lines in cities without existing metro systems, likely in response to mounting concerns over rising costs and runaway local debt. The news came as no surprise to public transport industry watchers: As early as 2002, the central government started pouring cold water on city officials’ enthusiasm for new subway systems, and while that worked for a time, the craze for subway development has returned over the past decade — this time in tandem with a real estate bubble. The resulting boom forced central officials to again tighten approvals for new subway construction in 2018 — before quietly suspending construction on all new systems.

To understand why central officials have soured on subways — and why their local counterparts can’t seem to give them up — it helps to know a bit about how the country’s subway systems have grown over the past two decades.

Prior to the year 2000, just four cities on the Chinese mainland — Beijing, Tianjin, Shanghai, and Guangzhou — had subway systems, and only Beijing’s had more than one line in operation. Nationwide, most urban residents commuted fewer than six kilometers each day, and buses and bicycles were still the most common methods of getting around. Demand for new metro construction was so limited that the State Council actually first suspended approval of new subway projects in 1995.

As with so much else, however, everything changed with China’s rapid urbanization and the attendant growth of the country’s real estate industry. Take Beijing, for example. For most of the 20th century, the city proper was basically contained within the city’s Third Ring Road. Now, however, China’s capital has seven ring roads, and statistics from 2020 show that its residents commute an average of 22 kilometers a day, round trip. The Beijing metro system has grown accordingly: By 2025, the city’s subway is projected to reach 30 lines, up from two in 2000.

Beijing’s subway construction spree is a microcosm of the rail boom that has taken over the rest of China’s cities. Of the country’s more than 40 existing urban rail transit systems, the majority have been built within the last two decades. Local governments’ race to build flashy new subway systems has not been driven entirely by the real needs of urban development, however. It is often as much the product of an impulse to boost local GDP growth and economic competitiveness through infrastructure investment. Many cities that binged on subway construction in recent years were hoping to replicate the success of earlier highway and freeway construction projects. In theory, infrastructure projects create jobs and make cities more appealing; they’re also magnets for vital transfer payments from the central government — a kind of economic subsidy to less developed regions paid out of the central coffers.

But subways are not highways. Constructing a single kilometer of subway currently costs around 1 billion yuan ($157 million), anywhere from three to 10 times more expensive than the typical highway. Furthermore, subway fares in most cities remain extremely low and even small price hikes are often met with great resistance from the public. Limited ticket revenues make it difficult to recoup the costs of building and operating subways, leaving many new lines operating in the red. Their resulting dependence on government subsidies has only further exacerbated China’s public debt problem.

These issues have only grown more salient as financially strapped governments link subway development to the overheated property market. On their own, the subways might be unprofitable, but because the land-use rights near subway stations can be sold at a premium, a new wave of subway fever swept China between 2012 and 2013. Cities sold off subway-adjacent land rights, then used the proceeds to further invest in subway construction that in turn would result in even higher land prices.

The more debt-financed subway construction was used to fuel the property bubble, the more obvious the risks became. For this reason, the central government stepped in and in 2018 issued new regulations that forced many smaller cities or those with shaky finances to shelve their plans for a subway.

Now the indications are that all new system construction has been frozen. This is merely a band-aid, however. If China is to get its subways back on track, officials first need to iron out the relationship between public services and the market. Other Asian metropolises with mature public transit systems — including Hong Kong and Tokyo — generally fund their subway projects through a mixture of government and private investment. This allows both parties to share both the risks and rewards of the resulting urban development.

Also important is getting policymakers to change their outdated approach and adopt a more holistic approach to public transit planning and development. There are signs that this is already happening: More and more planners now realize that subways are not simply methods of transporting people from point A to point B; if they are properly laid out, metro stations can be used in conjunction with farsighted urban planning to improve the quality of life of neighborhoods and even entire cities.

For this effect to be fully realized, subway construction must be paired with denser, more sustainable residential and commercial development as well as more pedestrian and commuter-friendly design — an approach known as “transit-oriented development.” Lianhuaqiao Station in Beijing, for example, was built with just three entrances, all of them on or around a cluster of roundabouts at the intersection of two major roads. When the station first opened, commuters had to cross a busy road to reach the surrounding residential areas, office buildings, and bus stops. Although Beijing’s transport authorities added two new footpaths in 2016, it’s tempting to wonder what the area might have looked like if the station had been better integrated into its surroundings from the start.

Properly deployed, subways can and should be an engine for developing better, more livable, and more environmentally friendly urban spaces. That’s only possible if they don’t become synonymous with empty carriages, deserted stations, and red ink first.

Translator: David Ball; editors: Cai Yineng and Kilian O’Donnell; portrait artist: Wang Zhenhao.

(Header image: A view of a construction site in Beijing, Feb. 23, 2021. Huang Liang/Beijing Youth Daily/People Visual)