China’s Subway Bubble Has Exploded: Shenzhen Metro Is Bleeding 100 Million Yuan a Day!

This is the loneliest subway station in my country. An exit that opens to pure emptiness. No buildings, no roads, just open fields. Farmers still work the land right beside the station. Netizens joke, do we need to bring a hoe just to get out? Where are we even going? Many are now questioning whether the subway project was rushed or simply a product of the city's overly ambitious Metro Line 9, stretching 50.4 kilometers, began construction in 2013. More than a decade later, it remains out of service. Aerial shots show the main structure completed and tracks fully laid, yet no one knows why it still isn't open. The ones suffering the most are the homeowners who bought apartments near Line 9. The station is literally at their doorstep, but after more than 10 years, they still can't ride the train. Many must feel completely betrayed. In October this year, passenger numbers on China's urban subways have fallen for eight straight months, and two thirds of cities failed to meet construction standards. Low ridership has become the biggest reason many subway proposals were denied this year. With real estate collapsing and local governments tightening spending, the era of China's rapid subway expansion is officially over. Before the property crisis, subway construction was unstoppable. Before 2008, only 10 cities had metro systems. Boosted by the 4 trillion yuan stimulus and the housing boom, the network exploded over 20 cities had subways by 2015 and more than 40 by 2019. But since 2024, many 14th five-year plan projects have finished, while new applications are being repeatedly blocked due to Beyond Chengdu, at least 20 cities are still stuck waiting. Metro plans in Ningbo, Qingdao, Luoyang, Xining, Harbin, and others have all been rejected due to insufficient ridership or other failed indicators. In the future, second- and third-tier cities will almost have no chance of getting subway approval, and even first-tier cities will struggle. Recently, Ningbo's application for phase 4 construction was rejected, shocking the entire region. And this is despite Ningbo being a sub-provincial city with independent planning status and a GDP of 1.8148 trillion yuan, higher than Tianjin and ranking 11th nationwide. So why was it rejected? Subway policy has tightened with three major indicators. First, the city's GDP must exceed The blogger notes that four provincial capitals, Lhasa, Xining, Yinchuan, and Haikou, still don't have subways because their GDP hasn't crossed the 300 billion yuan mark. The second indicator, the urban population must exceed 3 million. Cities like Guangzhou, Yantai, and Tangshan all have GDPs above 300 billion yuan, some even exceeding 1 trillion, but still can't get The third requirement, local government revenue must surpass 30 billion yuan. The fourth, passenger flow intensity. Ningbo meets the standards for GDP, population, and fiscal revenue. So why did its new project fail? The answer is passenger flow intensity. The national rule now requires a minimum of 0.7 million passengers per kilometer per day. In other words, each kilometer must carry more than 7,000 passengers daily. For example, a city with 100 kilometers of rail lines would need over 700,000 daily riders. Multiply that by 365, and the annual ridership must exceed 256 million. This threshold is extremely hard for many cities to reach. Subway stations should ideally be built in densely populated areas with strong transportation demand. However, in many Chinese cities, a strange scene keeps appearing. The subway stations are brand new, brightly lit, and impressively spacious. Yet once you step outside, everything turns into empty wasteland. All you see are scattered construction fences, overgrown weeds, and not even a proper sidewalk for pedestrians. Why does the CCP keep building subway stations on undeveloped or even completely uninhabited land? Analysts argue that although it is often packaged as advanced, forward-looking planning, the deeper logic is tied to raising land prices, driving local land auctions, and stimulating forced urban expansion. One of the most common tools used by local governments to enlarge their administrative and urban footprint is the combination of rail transit construction and surrounding land development. In simple terms, wherever a subway line is built, the land around it naturally appreciates, attracting developers and raising auction premiums. This in turn provides local governments with more fiscal revenue through land sales. During periods of rapid economic growth and a red-hot property market, this model functioned smoothly. The rapid rise in land and housing prices covered up all the structural issues. But once the real estate sector cooled down, this development model became impossible to sustain. Housing and land prices stopped rising, and several long-term consequences began to emerge. The most direct one is a sharp decline in subway passenger traffic, while land sale revenue no longer comes close to covering staggering operational costs. In 2024, total subway passenger volume nationwide reached 32.24 billion rides. However, because construction costs are excessively high, fair revenue in many cities is still far from enough to support operational expenses, making them heavily dependent on continuous central government subsidies. For many years, almost all subway companies in China have been operating mainly through government subsidies. According to 2024 data, excluding subsidies, 26 of the 28 major city subway operators reported losses. Even Shenzhen Metro, once regarded as the most profitable subway company in the country, reported a shocking 33.461 billion yuan loss in 2024. This loss surpassed its total accumulated net profits over the previous five years, setting a historic record in China's subway industry and causing a major shock in the Experts say the losses come from three main factors. First, construction costs are extremely high, 700 million to 1 billion yuan per kilometer, and up to 2 billion in difficult terrain. Second, operating costs such as labor, electricity, maintenance, and depreciation push Beijing Metro's annual expenses to nearly 15 billion yuan. Third, the real estate slump has sharply reduced revenue from land and commercial development near stations, making further expansion unviable. On top of that, subway fares are tightly regulated, and ticket revenue covers only about 35 percent of operating costs. With local governments tightening their budgets, every expense must now be carefully managed. Subway companies are being forced to adopt both cost reduction and revenue-generating strategies just to stay afloat. For example, Kunming Metro increased fares for the first time in its 13-year history. Chongqing adjusted its fare structure as well, officially ending the longstanding 2 yuan era. Foshan Metro also introduced extreme energy saving measures, such as reducing train frequency, dimming station lighting, and raising air conditioning temperatures, leading passengers to complain that the trains felt like ovens during the sweltering summer months. As China's economic growth slows and consumer spending weakens, the subway industry, long considered the backbone of urban public transport, is now confronting unprecedented pressure. Looking back at 2024, Shenzhen Metro alone had a net loss of 33.46 billion yuan. Shenzhen's losses today are fundamentally different from those in 2015. In 2015, its 1.8 billion yuan loss was due mainly to temporary factors, and the company quickly returned to profitability the following year. But the enormous losses recorded in the first half of 2024 are directly tied to China's sluggish real estate market. Metro fares remain tightly regulated, meaning operators can never rely on tickets alone to achieve profitability. Shenzhen Metro has long depended on the TOD, Transit Oriented Development Model, which centers on developing integrated office, commercial, cultural, educational, and residential areas within 400-800 meters of subway stations. Through the Rail Plus property and station-city integration approach, Shenzhen Metro created a diversified business ecosystem that includes office towers, shopping malls, hotels, co-working spaces, and large-scale advertising networks. The issue, however, is that since 2021 following the burst of China's property bubble and the prolonged decline in housing prices, the TOD model has become nearly impossible to sustain. Scholars point out that Shenzhen Metro's dramatic shift from profit to deep losses marks the end of an era when Chinese metro systems could rely on real estate development to stay financially healthy. It reflects the broader collapse of the real estate-driven economic model. Although Shenzhen Metro's performance showed slight improvement in early 2025, the company still failed to escape loss-making territory. According to its latest financial report, it generated around 7.284 billion yuan in revenue in the first half of the year, a 21.7% year-on-year decline. By the end of June, the company's total liabilities had reached 479.6 billion yuan, with a debt-to-asset ratio of about 60%, revealing immense financial strain. Shenzhen Metro's financial troubles are closely linked to its heavy As Bankei's largest shareholder, the company currently holds a 27% stake. In 2017, at the height of China's property boom, Shenzhen Metro invested roughly 66.4 billion yuan to acquire Bankei shares. But after the housing market collapsed, Bankei's market value plunged to just over 80 billion yuan, less than one-fifth of its peak. Bankei is expected to post a net loss of 11.95 billion yuan in the first half of 2025. Its continued poor performance has dragged down Shenzhen Metro's investment returns. Meanwhile, Shenzhen Metro continues extending financial support. On November 11, Bankei announced it would receive up to 1.666 billion yuan in loans from Shenzhen Metro. Excluding this latest loan, Shenzhen Metro has already provided 29.13 billion yuan in financing to Bankei. Shenzhen Metro's situation is not an isolated case, but a snapshot of the entire Chinese subway industry. Amid the economic downturn, shrinking passenger flow, and the collapse of the real estate sector, the overall operating environment has sharply deteriorated even for top-tier cities. Beijing Metro recorded a loss of 24.1 billion yuan in 2024, equivalent to around 66 million yuan per day, with fair revenue covering only 14.5% of operating costs. Guangzhou Metro's revenue coverage rate has also dropped below 30%. These figures reveal one undeniable truth. Even China's wealthiest and most developed cities are struggling to maintain a basic balance between subway operating income and operating expenses.