Description

"In 2007, China’s freight transport volume reached 3.14 billion tons, increased by 9% compared with 2006. And the total freight transport was 2379.7 billion tons/km, increased by 8.4% on the basis of 2006.

Chart Volumes of freight transport by railway in China from 2003 to 2007

In 2007, the total volume of passenger transport by railway reached 1.36 billion person times, increased by 8% compared with 2006. The number of direct passenger was 530 million, 38.9% in the passenger capacity of the year, also increased by 10.4% compared with 2006. The volume of passenger transport reached 721.631 billion persons /km , increased by 9% as compared with 2006
In 2007, the total revenue of domestic railway transport added up to 317.068 billion RMB Yuan, increased by 10.7% year by year.

China becomes No.1 in the railway industry in terms of passenger capacity, freight capacity, volume of circular flow and transportation density. With the operation distance which only accounts for 6% of the global railway transportation distance, China has successfully completed approximately 25% of the world railway transportation capacity.

During China’s 11th Five-Year Plan, the construction of passenger transport oriented railway, intercity railway transport as well as coal transport oriented railway will be emphasized in order to form quick transport networks for passengers and coalmine. China’s railway transport industry will gain a tremendous developing opportunity in the coming years. Till 2012, the passenger capacity and freight capacity by railway will reach 2 billion and over 5 billion respectively in China.

China’s railway construction is still in its prime time. During 11th Five-Year Plan, 19,000 km railway in which 9,800 km is for passenger transport will be constructed at a total cost of some 1500 billion RMB Yuan. The operation distance of China’s railway will go up to 95 thousand kilometers in 2010, in which multiple tracks and electrical tracks will account for 45% respectively. The price of railway transportation has a trend to go up in the long run. It has formed a wide gap between railway freight and road freight. And a new price system comes into being among state-owned railway, shareholding railway and joint venture railway. The price of state-owned railway transport has a trend to go up in the long run, and the system reform for the investment and financing of railway will be conducted under this guideline which can be described as government-leading, investment diversification and market-oriented operation. Following this guideline, we will have diverse investors, and more financing channels. In 2007, the 6th large-scale acceleration for railway has raised the speed to 200 kilometers per hour. And the speed in some sections of main lines such as Beijing-Harbin, Beijing-Shanghai, Beijing-Guangdong and Jinan-Qindao has reached 250 kilometers per hour. The acceleration for railway will change the operation system and service structure and raise the average price of passenger transport.

Express transport of passengers and heavy freight are key solutions to deal with the bottleneck of railway transport, the 6th acceleration for railway has increased the freight capacity and passenger capacity by 12% and 18% respectively. The railway construction will benefit these railway enterprises involved in fixed facility construction, equipment manufacture and transportation.

After a comprehensive analysis, we come to a conclusion that railway transport industry has a wide prospect for investment. Although the investment cycle is a bit long, it has high profits and low risks. And you will gain many investment opportunities from railway construction and equipment manufacture.
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