BMI's Executive Summary

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China's economy continues to power ahead, driving trade and demand for freight transport. Our latest estimates put GDP growth at 11.5% this year, easing a fraction to 10.4% in 2008. China's foreign trade will continue booming: up by 23.9% in 2007 and 21.5% in 2008. This double-digit trade growth continues to create massive demands on the country's shipping, ports and infrastructure capacity.

BMI's China Freight Transport Report concludes that maritime and inland-waterway freight traffic will be a fast-growing transport mode in 2007-2012, with an average annual expansion rate of 14.9%. The driver for shipping growth is an economy that will grow by an average of 9.6% each year until 2012, as the country exports, manufactures and imports increasing volumes of key commodities such as oil, coal, gas and grains. Given this state of affairs, prospects for shipping and the wider freight transport industry are very encouraging over the forecast period. Our forecast is that freight carried across all modes in 2007-2012 will expand at an annual average of 13.9%, expressed in billion tonnekm (bntkm). As our figures indicate, the freight sector will continue to grow at a significantly faster rate than the economy as a whole, in line with intensifying demand for transport at this stage in the development of the Chinese economy.

Underpinning the optimistic outlook is a supportive operating environment. BMI has given China's freight-industry business environment a rating of 56 (out of a theoretical maximum of 70), which places it right up at the top of the Asia Pacific region. Extremely high scores for freight growth and transport intensity (a measure of foreign trade dynamism) more than offset a weaker showing for political risk and the regulatory framework. By transport modes, growth will be led by oil and gas pipelines (at an average rate of 17.0% per annum), air freight (16.5%), shipping and inland waterways (14.9%), road haulage (14.4%) and rail freight (11.1%).

For the 2007-2012 forecast period we expect the transport and communications sector to continue outpacing the economy as a whole. It will achieve average annual growth of 10.7%, versus 9.6% for overall GDP. The total value of transport and communications GDP will rise to US$336bn in nominal terms by 2012, representing 6.1% of China's GDP. The transport and communications sector employed 21.7mn people, or 2.8% of the labour force, in 2006. We see those figures rising to 23.2mn and 2.9% by 2012.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

China’s Rail Industry SWOT

China Economic SWOT

Chapter 3 - Business Environment Overview

Asia Pacific Freight Business Environment Ranking

Business Environment Ranking

Economics – Long-Term Risk

Politics – Long-Term Risk

Freight Transport Growth

Transport Infrastructure Growth

Regulatory Environment

Competitive Environment

Transport Intensity Index

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Legal Code/Corruption

Red Tape

Labour Force

Chapter 4 - Industry Trends And Developments

Road

Rail

Air

Sea

Pipelines

Chapter 5 - Industry Forecast Scenario

Macroeconomic Environment

Table: China – Macroeconomic Data And Forecasts

Chapter 6 - Country Snapshot: China Demographic Data

Section 1: Population

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education And Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages Per Annum

Transport Outlook

Table:China Freight Transport Industry Forecast

Table: China Freight Transport Carried

Chapter 7 - Trade Environment

Table: China Value of Exports by Category (US$mn)

Table: China Value of Imports by Category (US$mn)

Table: Top Export Destinations, US$mn

Table: Export Trade, % y-o-y

Table: Top Import Sources

Table: Import Trade, % y-o-y

Chapter 8 - Market Overview

Multimodal

Competitive Landscape: Multimodal

Company Profiles

Road

Infrastructure

Competitive Landscape: Road

Rail

Infrastructure

Competitive Landscape: Rail

Air

Infrastructure

Competitive Landscape: Aviation

Company Profiles

Water

Infrastructure

Competitive Landscape: Maritime

Company Profiles

Pipelines

Infrastructure

Competitive Landscape: Pipelines

Chapter 9 - BMI Forecast Modelling

How we generate our industry forecasts

Transport Industry

Sources

Chapter 10 - Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave per annum), US$

Table - Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Asia Freight Transport Reports: Sample of Companies Ranked

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Analysis of latest projects across the freight transport sector – road, rail, air, sea, logistics – including market overview which provides an outline of the key elements driving development. SWOT analysis of the state’s business environment, transport sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of Asian Freight Transport Sources

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BMI's Asian Freight Transport Reports are based on an extensive network of multilateral organisations, government departments, freight transport industry associations, chambers of commerce and company reports. Information sources include: