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China Highway Industry Report, 2007(overview)
From www.gasgoo.com| February 01 , 2008

The indexes of China highway transportation in the first 9 months of 2006 continued to increase: the highway passenger transportation volume and the turnover volume of passenger increased 8.5% and 8.8% respectively compared to the same period of 2005, and the freight volume and freight turnover volume increased 8.9% and 11.6% separately. Under the continuously better external environment, the overall profitability of highway industry strengthens further, and the operating performance of the major listed companies beat or even exceeded the expectations generally.

Expressway Plan by Province during the 11th Five-Year Plan Period

China Highway Industry Report, 2007(overview)
Source: Research In China

Generally speaking, China expressway development is still in backwardness now. The area density of America, Japan and Germany in 2000 is 2.23 times, 3.74 times and 7.2 times than that of China in 2005 respectively. Compared by the population density, China's expressway mileage every 10000 population in 2005 is no more than 1/10, 1/6 and 1/4 of that of America, France and Germany separately. Compared by the highway network distribution, the expressway in America has connected all the cities with population more than 50,000, in Germany, the expressway has connected all the cities with population more than 50,000 and 90% of cities with population less than 50,000, and the expressway in Japan has connected all the cities with population more than 100,000, while in China, the expressway just covers provincial capital cities and cities with urban population more than 500,000, and in the medium cities with population more than 200,000, just 60% of which are connected by expressway. So the demand of expressway construction in China is still strong.

Meanwhile, with the rapid increase of automobile penetration rate and fast development of external logistics, expressway industry will embrace great opportunities. In addition, the implementation of the combination of income tax and the new accounting standard also bring along benefit to most of the expressway enterprises. In the near future, the risks of the expressway industry are mainly from the rise of the oil price and the fuel tax that will be probably imposed.

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