The background

To meet the requirements of building a well-off society in an all-round way and a modern society in the near future, a national-level expressway network, as part of the nation's macro development strategy and an endeavor to keep the nation's expressway on a fast, sustainable, and healthy track, needs to be planned. In the light of the nation's strategy, the planning and building of a national expressway network will facilitate the establishment of a big and integrated national market and the smooth nationwide mobility of goods and other resources, thus playing a vital role in narrowing down the regional development gap, creating job opportunities, and facilitating the development of other industries.

In the light of the new development requirements of the society, planning and building such an expressway network is prerequisite to the nation's overall development. The escalating human and material mobility demands in the early 20 years of the new century, given that a doubled total economic volume is scheduled, and the ever increasing transport efficiency and quality requirements imposed by the emerging industries, especially the fast growth of cars, new cities, and logistics all combine to make the planning work emergent.

Compared with the nation's vast land size, dense population, and fast growing transport demands, the total expressway mileage in China, given the existing 30,000km expressway, is insufficient. In addition, failing to formulate an integrated national expressway network plan to guide and coordinate the local expressway construction will result in irrational utilization of transport corridor resources and irrational cross-region transport corridor layout. And the road signs and names utilized are not standardized, which is also inconvenient to the road users.

In general, with the fast economic growth in the new period and the change of people's life style and the improvements of life quality, it is necessary to build an integrated national expressway network. After conducting extensive researches and discussions, the old plan was renovated. On Oct. 17, 2004, the National Expressway Network Plan (NENP) was passed by the State Council, marking the beginning of a new era for China’s expressway construction.

As the nation's important strategic resources, the building of the national expressway network will facilitate the establishment of a national uniform market, which plays a big part in improving productivity and competitiveness. It will exert, from a long-term view, big influence on people's modern lifestyle. It is believed that, through the joining endeavors of both the Central Government and localities, the active participation of both the government and the public, and international cooperation, the NENP will play an ever increasing role in enabling the public to enjoy a better transportation service.

The Plan

Formed by 7 radiating lines from Beijing, 9 lines from north to south and 18 from east to west, the network, known in short as "7918 Network", will cover a region with a population of one billion.

According to the plan, the 7 radiating expressways are the Beijing-Shanghai, Beijing-Taipei, Beijing-Hong Kong-Macao, Beijing-Kunming, Beijing-Urumqi, and Beijing-Harbin expressways. 

9 vertical highways connecting north and south: Hegang-Dalian,Shenyang-Haikou,Changchun-Shenzhen, Jinan-Guangzhou, Daqing-Guangzhou, Erlianhaote-Guangzhou, Baotou-Maoming, Lanzhou-Haikou, and Chongqing-Kunming expressways.

18 horizontal highways running east and west: Suifen River-Manzhouli, Hunchun-Wulanhaote, Dandong-Xilinhaote, Rongcheng-Wuhai, Qingdao-Yinchuan, Qingdao-lanzhou, Lianyugang-Huoerguosi, Nanjing-Luoyang, Shanghai-Xian, Shanghai-Chengdu, Shanghai-Chongqing, Hangzhou-Ruili, Shanghai-Kunming, Fuzhou-Yinchuan, Quanzhou-Nanning, Xiamen-Chengdu, and Shantou-Kunming/Guangzhou-Kunming expressways.

In addition, the Plan also includes 5 ring lines, 2 parallel routes and over 30 connecting links, of them the 5 ring lines are Liaozhong Ring Line, Chengyu Ring Line, Hainan Ring Line, Pearl River Triangle Ring Line, and Hangzhou Ring Line.

The influence

1. Significantly rising revenues for the expressway industry in the coming years

"Although an ambitious plan, the 85,000km will be completed ahead of schedule". According to resources, given the current growth rate of expressway, the 30-year plan is only a conservative one, which will be undoubtedly finished ahead of schedule. Meanwhile, with an explosion of car traffic, the expressway is expected to steadily grow at a 15%-20% rate.

The long-term influence exerted by the national expressway network will be far greater than the short-term influence. The reason is that after 5-6 years of operation, the revenues generated by the existing expressways has been maintaining a stable 15% growth rate, of which the traffic toll revenues account for 15%-20%. With the ever-increasing car traffic, the revenues for companies in this segment will further grow.

The NENP paves the road for the listing expressway companies, especially for the listing companies who own the trunk lines.

2. The listing expressway companies in Central China have geographic advantages.

According to resources, of the 30 million investment for one kilometer expressway, 15% comes from government grants, 45% are raised by the expressway development companies themselves, , 35-% comes from bank loans, and 5% from foreign investment.

According to the MOC, during the 30 years, the emphasis is put on the early 20 years in which the early 10 years is the top priority. Therefore we can draw a conclusion that in the coming 10 years, the expressway skeleton will take shape. By then, with the explosion of car traffic, the expressway will play an even bigger role in generating more revenues for the listing expressway companies, which will address the funding problem troubling the industry.

Meanwhile, the layout of the new expressway network also attracts people's high attention. According to resources, among the 44,000km expressway to be constructed, 8,000km are located in the Eastern region, 12,000km located in the Central region, and 24,000km are located in the Western region, thus the construction work is mainly focused on the Central and Western regions. Therefore, the listing expressway companies located in the above regions will benefit most. Since there is no large listing expressway companies in the Western region at present, thus the companies located in the Central region will have the geographic advantages.

3. The building material and construction segments will boom

The money

The total costs of the national expressway network will be 2 trillion yuan (some 240 billion US dollars), of which 430 billion yuan will be invested in the Eastern region, 570 billion yuan will be invested in the Central region, and 120 billion yuan in the Western region. From 2005 to 2010, the annual investment will run from 140 billion yuan (17 billion US dollars) to 150 billion yuan (18 billion US dollars), with an annual investment 70-80 billion yuan, while from 2010 to 2020, the annual investment will be around 100 billion yuan (12 billion US dollars). To ensure the sustainable and healthy development of the nation's expressway construction, the central government will, given a weak financing capacity and insufficient funding in Western region, input some 50-60 million yuan investment in the region.

The construction fund will come from vehicle purchase tax, fees and taxes collected by local governments, state bonds, domestic investment and foreign investment. Allowing diverse financing methods, private capital is also permitted to invest. And the investors will repatriate profits from the toll revenues.

China will continue to carry out the existing diverse financing methods. The input of foreign capital and private capital are expected to increase in the near future. However, the dominant position of domestic bank loans among the financing capitals will not change fundamentally.

Among the current diverse expressway financing systems, the commercial bank loans and state-owned bank loans account for a big part (some 60%-70%). In addition, some 6%-7% come from the input by central and local governments, and others come from foreign capitals and private capitals, thus constituting the four major funding resources for China's expressway construction.

In the light of such a financing structure, bank loans will account for a big part in the expressway construction capital chains, which indicates the importance of implementing toll road measures to repay the bank loans. Therefore, the building mode of loaning to build and tolling to repay will continue for a very long time in China. China will not remove the toll road policy in a short time.

The goal

Upon its completion, the national expressway network will serve to: 1) cover over 1 billion population. Among them eastern region accounting for 90%, central region 83%, and western region 70%. And the GDP of covered regions should amount for 85 percent of national GDP, achieving average 30min from the eastern region to expressway, average 1h from the central region, and average 2h from the western region. 2) Link all the provincial capitals (not including Hong Kong, Macau, and Taiwan), among them 83 percent of 500,000 populated big cities and 74 percent of 200,000 populated medium-sized cities. 3) Link all the important transportation hub cities, included are 50 railway hubs, 67 airway hubs, 140 overland hubs and 50 waterway hubs, forming a grand integrated communications network. 4) Strengthen the communications between such economically developed regions as the Yangtze River Triangle, the Pearl River Triangle, etc. aiming to build at least three expressways linking such areas; For the internal of each metropolitan region, a comparatively complete inter-city expressway network will be established. At the same time, the radiative role of such big cities as Beijing, Shanghai, Guangzhou, Chongqing, Xian, etc will be further strengthened. 5) Link main national first grade border highways to strengthen the external communications; In addition, the network also links the famous 4A tourism cities;

The features

1. Centered around the "human needs": meeting people's road travel needs, creating safe, comfortable, and convenient transport conditions, making the public experience the convenience enabled by the expressway system.

• The plan will link all the provincial capitals in China, and link big cities with a population of 500,000 and medium cities with a population of 200,000, and cover the 1 billion population all around China.
• The plan will achieve average 30min driving time for the Eastern region to access expressways, average 1h from the Central region, and average 2h from the western region, thus tremendously improving the society's mobility.
• The plan will link important AAAA tourism cities, thus providing quick corridors for the public’s travel and fun needs.

2. Focus on the "serving the economy" guidelines: strengthening the role of expressway in the homeland development, regional coordination, and economic development, fulfilling the nation's economic development strategy.

• The plan will strengthen the communications between such economically developed regions as the Yangtze River Triangle, the Pearl River Triangle, etc. aiming to build at least three expressways linking such areas; For the internal of each metropolitan region, a comparatively complete inter-city expressway network will be established, thus laying a solid foundation for the acceleration of regional economic integration and the establishment of big metropolitan circle and the modernization of Eastern region.
• The plan aims to essentially improve and optimize the highway network structure of Western region and the established industrial bases in Northeast China.
• The plan will link the major national class border highways and ports, and improve the transport conditions of the external connecting links, and serve the export-oriented economy.
• The GDP of the regions covered by the Plan amounts for 85% of the nation's total GDP. The implementation of the Plan will facilitate the economic growth, the development of related industries, and the creation of more job opportunities.

3. The emphasis is put on the "integrated transportation": the planned lines will link all the important hub cities in China, including 50 railway hubs, 67 airway hubs, over 140 highway hubs, and 50 waterway hubs, thus providing a grand, comprehensive and integrated transport system.

4. Serve the "sustainable development" strategy in an around way: the implementation of the Plan will help to save the homeland resources, environment protection, and save energy, thus supporting the sustainable development of social economy. It is estimated that in providing the same road capacity, the land area used for building an expressway only amounts to 40% of the land used for building a common road. The emission will be reduced by 1/3 on the expressway, the accident rate will be reduced by 1/3, and the fuel consumption is also remarkably reduced.

The status

Of the total length, 29,000km have been built, 16,000km under construction and 40,000km yet to be built, with 8,000km to be built in Eastern regions, 12,000km in Central regions, and 24,000km in Western regions, a big challenge for Western regions.