“The Shenzhen Metro has revealed massive losses. With so many security staff, is it really necessary to have two checkpoints at a single entrance?”
“A home bought for RMB 7 million is now worth only RMB 3 million (US$410,000). In just eight years, RMB 4 million evaporated. In 2017, my husband and I spent RMB 7 million on a 136-square-meter apartment in Yanjiao. Now, even at RMB 2 million, it’s hard to sell.”
“Sisters, the sky has collapsed. Last year I bought an apartment at RMB 16,000 per square meter. In less than a year, it dropped to RMB 12,000. That’s a loss of RMB 400,000. My husband and I are devastated, heartbroken, living in despair. Every time I think of it, the pain is unbearable.
For more than two decades, subways were seen as a key symbol of modernization. Local governments poured in huge sums, rushing to build new lines for political achievements. Yet with mounting annual losses and ballooning debts, subways have now become a heavy fiscal burden.
Excessive staffing and costs drive losses
“Looking at this photo, I finally understand why the Beijing subway is losing money. One exit has seven security checks. Each station, with at least four exits, requires around 30 staff per shift, or 60 per day, plus backups — about 84 people in total. Across 646 stations, that’s roughly 55,000 staff. At RMB 200 per day each, security staff alone cost RMB 11 million daily. Passenger revenue is RMB 31 million (US$4.2 million) daily, with more than 30 percent of costs spent on security alone. Add cleaning, drivers, customer service, maintenance, and electricity — how can it not lose money?”
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Subways struggle to turn a profit mainly because construction costs are so high. For example, Shanghai Metro Line 19 cost RMB 2 billion per kilometer — far above the average. Unchecked expansion and soaring operating expenses have only worsened the problem.
The deeper reason lies in real estate. For the past 20 years, subways have not been about transportation but about housing speculation. Build a subway, raise land prices, develop real estate, and use sales to offset subway losses.
In 2022, Shenzhen Metro earned RMB 3.6 billion from ticket sales but over RMB 16 billion from property. In essence, it operates like a real estate company, with subways as a sideline. Wuhan Metro is similar — RMB 5.39 billion from real estate versus RMB 3.12 billion from ticketing.
These subway projects underscore one reality: the business was never truly about ticket sales. On one hand, they build subways; on the other, they sell real estate. That’s the real model — using uncertain future property gains to plug today’s guaranteed operating losses.
The blogger added that metro systems also generate a portion of their revenue from ancillary businesses such as advertising and property management, which account for about 10–15 percent of total income. But as China’s property market plunges into a deep freeze, metro operators have been hit hard, since their entire commercial model has always revolved around real estate.
Shanghai Metro layoffs target older workers
Shanghai Metro has already begun implementing layoffs, with the first wave hitting mostly middle-aged employees in their 40s and 50s. The severance package follows a formula of N + 5 + RMB 10,000, where “N” represents the employee’s years of service, plus five months’ salary, and an additional RMB 10,000 in cash.
Why target older workers? The company has done the math: senior staff typically earn between RMB 8,000 and 15,000 per month, while new university graduates can be hired at just RMB 4,000. Cutting 2,000 veteran employees could save the metro over RMB 100 million in annual labor costs — a significant sum for an operation long teetering on the edge of profitability.
“Shanghai Metro is laying off staff. The severance plan for those who leave before the end of the year has already been announced: N + 5 + RMB 10,000. Anyone departing by Sept. 30 can claim this compensation,” one insider noted.
Li Xin (alias), a veteran employee at Shanghai Shentong Metro, told overseas media that while the payout looks generous on paper, for middle-aged workers it is far from sufficient. In a city like Shanghai, he explained, the money could only cover about three years of basic living costs — and with social security fees now falling on individuals, many will struggle to make ends meet once their jobs are gone.
Shanghai Metro executives have stated that with upgrades in train technology, many lines are expected to transition to driverless operation by 2028. Once that happens, a large number of outsourced staff and station attendants will also face layoffs.
“Shanghai Metro is laying off 2,000 employees in one go, citing mounting losses and the need to replace human labor with artificial intelligence,” one commentator remarked. “Honestly, when I saw this news, my heart sank. The economic climate is so bad right now — many companies can’t hold on, some have shut down entirely, while others are cutting jobs and turning to AI.”
Even the metro system, long considered an “iron rice bowl,” is no longer immune. “When you scroll through your phone these days, you’ll notice that many middle-aged people have switched to making videos online. It’s not because they love being content creators — it’s because they truly have no jobs left. At this pace, you have to wonder: why are we even raising children? Unless your child is a prodigy, what future will they really have?”
Shenzhen Metro’s real estate gamble backfires
Once hailed as “China’s most profitable metro company,” Shenzhen Metro Group posted a rare financial loss in the first half of this year — its first deficit in a decade. Even more striking, the group reported a massive loss of RMB 33.4 billion in 2024, most of it due to its equity investment in real estate giant Vanke. Why is the Shenzhen Metro so deeply entangled? Because it is Vanke’s largest shareholder, holding 27 percent of the company.
In 2017, Shenzhen Metro spent RMB 66.4 billion to acquire its stake. If Vanke collapses, that investment will evaporate. As a result, Shenzhen Metro now finds itself riding a tiger — unable to dismount, and forced to keep pumping in cash.
“Housing sales have stalled, and China’s most profitable metro company ended up losing in a single year all the profits it had earned over the past five. According to a recent announcement, Shenzhen Metro Group posted a RMB 33.46 billion loss last year. For context, between 2019 and 2023 the group had accumulated a net profit of RMB 27.3 billion — wiped out in one stroke.
Was it because no one was riding the metro? Hardly. In fact, ridership hit a record high last year, with more than 3.1 billion passenger trips. The company also operates railway services, bringing in nearly RMB 13 billion in revenue, a 26.7 percent increase. The real drain came from real estate — particularly its entanglement with Vanke. Back in 2017, Shenzhen Metro poured RMB 66.4 billion into becoming Vanke’s largest shareholder, and it still holds over 27 percent of the developer’s stock.”
According to commentators, Vanke was highly profitable in the early years of the partnership, paying out steady dividends to Shenzhen Metro Group. Between 2017 and 2022, Vanke handed over RMB 19.2 billion in dividends, making Shenzhen Metro the most profitable metro operator in China at a time when nearly all other subway companies were running losses.
Shenzhen Metro’s costly lifeline: Billions poured into Vanke with no end in sight
But as China’s real estate sector slid into a deep freeze, Vanke was hit with massive debt troubles, dragging Shenzhen Metro down with it. Last year alone, Vanke posted a net loss of RMB 49.5 billion, sending Shenzhen Metro’s profits tumbling. To keep Vanke afloat, the metro company has kept injecting cash; in 2024 alone, it funneled RMB 10.3 billion into the developer.
“No joke — every time we ride the subway, it’s basically giving Vanke another shot of life support. Just this week, Shenzhen Metro lent Vanke another RMB 2.064 billion. Since the beginning of the year, over the past nine months, the company has bailed Vanke out eight times, totaling RMB 25.9 billion — that’s nearly RMB 1 billion a day on average. At this point, Shenzhen Metro is riding a tiger. With so much money already sunk in, there’s no way to cut losses. They have no choice but to keep bleeding cash until Vanke somehow pulls through. If Vanke collapses, all that earlier investment goes straight down the drain.”
Commentators add that Shenzhen Metro has no real option but to prop up Vanke, given the sheer weight of its sunk costs. The company now holds just under a 30 percent stake in Vanke — representing more than 10 percent of its own total assets. Since its initial investment in 2017, Shenzhen Metro has poured nearly RMB 100 billion into the developer.
So when might Vanke climb out of its financial hole? For now, the outlook remains grim. In the first half of 2024, the developer posted a staggering loss of RMB 11.9 billion, with sales plunging by nearly 50 percent. Analysts note that this figure already reflects Shenzhen Metro’s ongoing bailouts — without them, Vanke would likely have collapsed months ago.
China’s subways: Overbuilt, overhyped, and drowning in debt
Meanwhile, Shenzhen Metro carried more than 3.1 billion passengers in 2024 — the highest ridership of any metro system in China. Yet it still reported a loss of over RMB 30 billion. Why is the world’s busiest metro system bleeding so much cash?
According to commentators, Shenzhen Metro has long relied on real estate ventures, auxiliary income streams, and government subsidies to stay afloat. But with the property sector in free fall, even this lifeline has been cut off. Many are left wondering: how did a symbol of urban modernization turn into a ravenous money pit that devours everything in sight?
The reason, they argue, is that subways are the quintessential example of speculative overbuilding. From the very start, they were a gamble — a bet that housing prices would never fall, that the economy would grow endlessly, and that debt would never need to be repaid.
Take Foshan as an example. Many residents have long wondered: why do subway lines always seem to be built in sparsely populated areas? Foshan has a population of nearly 10 million, so passenger demand should not be an issue. Yet the city’s Metro Line 3 deliberately bypassed the 200,000 residents of Ronggui, detouring into empty suburbs to serve newly built housing projects.
The logic was simple: gamble that housing prices would rise. The outcome? Metro capacity utilization across Foshan is below 10 percent. Despite massive government subsidies, the system has still posted annual losses exceeding RMB 100 million for two years in a row.
As one commentator pointed out, Chongqing’s subway network was only 13 kilometers long in 2005. By 2024, it had expanded to nearly 500 kilometers. This aggressive overbuilding was a bet on rapid economic growth, continuous population increases, and an ever-expanding urban footprint. The reality? Some lines, such as the Bitong Line, see as few as 19,000 riders per day — while the maintenance costs are staggering.
The broader subway debt crisis resembles nothing more than a giant game of “pass the parcel” that has dragged on for decades. The playbook is straightforward: plan a new subway line, push up land prices along the route, sell off parcels at inflated prices, and use the proceeds to cover operating losses. Then extend the network further, speculate on more land, and take on more debt.
The game is over
During the boom years of rapid growth and ever-rising property prices, the model looked like a perpetual motion machine. But now the game is over.
With land finance in retreat, these prematurely built subway systems face only three possible outcomes: raise fares to survive — as in Hong Kong, where a single ride can cost more than RMB 20; shut down and dismantle — like Zhuhai’s RMB 3 billion tram system, which was ultimately scrapped due to chronic losses; or follow Foshan’s example and cut costs by shutting off power during off-hours to “optimize efficiency.” But this crisis is bigger than the subway. It is a reflection of an era built on bubbles: sooner or later, someone must pay the price. When the housing bubble bursts, it is not just metro companies that suffer. Ordinary people are hit just as hard. Many who bought homes have seen values plummet, their savings evaporate, and even their down payments wiped out overnight.
“I sold my house and lost RMB 1.15 million in less than three years,” lamented one homeowner. “I listed it in June, thinking the orientation and floor were the best, so I set the price around the neighborhood average. I contacted over a dozen agencies, big and small, to post the listing. Some smaller ones even undercut my price by RMB 80,000 to 100,000 just to attract buyers. But still, nobody came — not even to ask.”
Eventually, he had no choice but to slash the price further. Only then did buyers start showing up. The final sale barely covered the mortgage balance. In the end, his RMB 600,000 down payment, RMB 400,000 in mortgage payments over the years, and RMB 100,000 in renovations — a total of RMB 1.15 million — was completely wiped out.
