(Yicai Global) Dec. 19 -- Chinese authorities have earmarked CNY298.3  billion (USD43.3 billion) for Shanghai's subway system over five years,  expanding the eastern city's network to 27 lines with over 1,100  kilometers of track.

The  subway will connect Hongqiao Airport, Pudong Airport, Shanghai South  Railway Station, Shanghai East Railway Station and other transport hubs  by 2023, according to a document on China's National Development and  Reform Commission's website. The city's municipal and district  governments will bear some 45 percent of the total cost while the  remaining part will come via bank financing.

Shanghai  government has been considering a rapid transit connection between the  city's two airports for many years to better serve citizens and the  development of the Yangtze River Delta, Mayor Ying Yong said in October.

Taicang  and other cities nearby are also actively planning to build city  railways connected with Shanghai's subway, Yicai Global learned.

The  development of railways in major urban centers has greatly shortened  commute times between outer suburbs and city centers, creating suburban  areas where people can live, Hu Gang, a professor at Jinan University  and president of the South China Urban Research Association, told Yicai  Global. Convenient rail transit will attract more people to move to  suburbs where there is adequate land, cheap housing and a good  environment. 

The  spread of the population and industry will reduce pressure on traffic,  the environment and house prices in key cities while optimizing the  spatial pattern of big urban areas, Hu added.

Developments in First, Second-Tier Cities.

Other  new plans for rail transit network expansions were unveiled in the  cities of Chongqing, Hangzhou and Jinan earlier this month. 

Chongqing  will develop a 486km-long orbital traffic network and build 70.5 km of  new subway lines. The total investment is CNY45.6 billion and 40 percent  will come from the government. There are also plans for 68 km of extra subway lines in Hangzhou and 36.4 km in Jinan.

Cities  that have approved rail transit plans in the second half of this year  are all first and second-tier cities with large urban populations.

Building  subways in some third and second-tier cities may put pressure on local  financial institutions because of the small population and lower  utilization. However, there is still much room for growth in major urban  rail transit networks as populations in big cities continue to grow, a  subway system industry insider told Yicai Global.

The  lower traffic on many routes in third and weak second-tier cities will  generate limited advertising revenue or land appreciation compared with  those in big cities where populations and traffic are larger, he added.  Subways will effectively meet people's travel needs and create both  economic and social benefits for major urban centers so first and second-tier cities are the focus for this round of investment.

Plans for expansions in Hefei, Xi'an, Wuhan, Chengdu and other cities are also in the works.

Cities  applying for urban rail construction should have over CNY30 billion in  general public budget revenues, and over CNY300 billion in regional  gross domestic product as well as urban populations of more than three  million, the State Council clarified in a document issued in July.