"The system is for public service, which means little profitability, and bank loans interests will bring long-term pressure for the cities," he said.

Given the long cycle of construction, bank loans can hardly meet government's financing needs.

Nanchang is planning to seek funding through various channels in 2013, including issuing local government bonds and equity trust.

In Shenzhen, the government said capital will mainly come from land developments along the lines.

As the system expands and brings more convenience to connected areas, land along the routes has become more expensive, which lifted revenues from land sales, but at the same time, investment costs also rose.

Jin Dongsheng, a researcher with the State Administration of Taxation, said the reliance on land revenues to cover costs is not sustainable as land transfers are limited.

"Although the local government is very active in promoting investments, financing will not be easy," said Zhao Qingming, senior analyst with China Construction Bank.

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