Trans-Asian Railway Finance Models: Theory And Practice

Regional Integration is an effective way to promote regional economic develop-ment，the construction of the ASEAN free trade area is a necessary road to deal withinternational competition League and to achieve common prosperity for the ASEANcountries. The construction of the Pan-Asian Railway is one of the important initia-tives towards this goal. The Construction of the Pan-Asian Railway complies with theeconomic development aspirations of countries in Southeast Asia, and currently theconstruction of the time is ripe, the problem of investment and financing becomes arestricting bottleneck.Cross-border railways belong to the category of the quasi-public goods. The construc-tion of Pan-Asian Railway involves a number of participating States, faces very dif-ferent political, economic and legal environment and is woven by "State" as the mainbody of the complex game. At present the construction of the Pan-Asian Railway ap-pears an extreme of one cold and one hot: China’s progress is fast and the initiative ishigh; the process of Greater Mekong sub-region countries is very slow due to finan-cial issues, most countries have not even been started.Pan-European Transport Network belongs to cross-border transport infrastructure,there are at least four points of its successful experience of financing worthy of ourreference in the Pan-Asian Railway financing: the first is the introduction of "Fundsecured" financing mechanism and giving full play to the EU’s "credit" value; thesecond is setting up a special nonprofit organization for coordination which signifi-cantly reduces transaction costs and enhances efficiency; the third is making use offunds to subsidy less developed regions in order to mobilize their enthusiasm of con-struction; the fourth is to perfect legislation and to create a good environment of in-vestment and financing for cross-border railway.This paper analyzes the internal and external financing environment that Pan-AsianRailway has faced through SWOT analysis method, sums up the general idea of the construction of the Pan-Asian Railway. The financing of Pan-Asian Railway shouldfollow the general idea of "building cooperation platform, complementing insideforce with outside force, sub-regional financial cooperation." This paper explores theconstruction of the Pan-Asian Railway financing mechanism from the four areas ofthe construction of multi-level cooperation platform, internal financing and externalfinancing and sub-region regional financial cooperation. Government promoting tobuild multilevel complementary cooperation platform is a necessary precondition toachieve the construction of the Pan-Asian Railway.To finance through the establishment of a special fund for the Pan-Asian Railway, in-tegrated use of various new railway financing models to market financing, trying touse the "track" financing models, and combined with the use of traditional financingincluding railway bonds, domestic bank loans, government financial support.Making efforts to obtain international loans and international aid and other foreignfunding is the essential complement to the realization of the Pan-Asian Railway fi-nancing. The financing ways include ASEAN free trade area by actively constructingthe financial service system matched with sub-region economic and trade cooperation,strengthening cooperation with sub-regional financial institutions and promotingRMB internationalization are also important means of the financing of Pan-AsianRailway. The promotion of financing among China-ASEAN free trade area is a fun-damental way to achieve trans-Asian railway financing. China should be the financingbody of the Pan-Asian Railway.