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"Merger & Acquisitions in China"
David S. Eberly

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backCHINAtalk May, 2012

All about the fives: China’s transportation plans

China plans to keep building roads and infrastructure, particularly in the countryside.

For all China’s massive investment – and significant progress – in developing its infrastructure over the past five years, the country still faces significant transport bottlenecks.

“China’s transport development is still very uneven, there are still areas of insufficient transport capability, breadth and depth of coverage are still very lacking, and links between different transport modes are not effective enough,” the State Council said in an official statement.

To solve those problems, Beijing has rolled out a 12th Five-Year Pan for transportation, based on a national transport network concept involving 10 major east-west and north-south transport links called the “Five Verticals and Five Horizontals.”

While providing few specific numbers, the document indicates that China plans a return to stimulating form after a slower period of infrastructure investment following a deadly high-speed rail crash near the city of Wenzhou last July.

Among the main goals of the plan, the State Council says, is for China to “basically establish” national networks of high-speed railways and highways, extend road networks to all towns and villages, and ensure coverage of freight rail in cities with populations of over 200,000 – potentially leading to safer and more reliable transport of goods across a country where winter coal shortages exacerbated by weak transport links are not uncommon.

In good news for air travelers faced with chronic delays, the country’s civil aviation network is also in line for expansion and improvement, though the specifics are fuzzy. More concrete were recent comments from China’s civil aviation regulator that the country will expand a pilot program to ease airspace restrictions to the whole country by 2015 (airspace below 1,000 meters in China is controlled by the Civil Aviation Administration of China and the Chinese military).

Flight delays, frequently blamed on military domination of all but a fraction of Chinese airspace, have been a persistent problem for Chinese airlines, with angry customers known to stage violent protests in airport waiting rooms.

Taken together, the goals point to continued heavy investment in infrastructure over the next several years.

Source: BusinessWithoutBorders - GAI

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