China will invest about 1.27 trillion yuan ($199 billion) to build subways and light rail lines during the current five-year plan ending in 2015 to ease traffic congestion and spur urban development, the official China Securities Journal reported on Friday.

The newspaper, without identifying sources, said local governments would finance 35 percent of the bill and the rest would come from commercial banks, China Development Bank as well as other channels.

The National Development and Reform Commission, China's powerful economic planner, will also provide low interest loans via China Development Bank, one of the country's three policy lenders, it added.

That includes new investment of 170 billion yuan in the capital city of Beijing in the years up to 2015, adding six new lines to the crowded city's underground and light rail network. ($1 = 6.390 Chinese Yuan)

(Reporting by Langi Chiang and Ken Wills)