China's Road Transport Enterprises Encouraged to Develop in Scale

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Last updated at: (Beijing Time) Wednesday, October 23, 2002

China's Road Transport Enterprises Encouraged to Develop in Scale

The time has come for China's road transportation enterprises to increase their scale through intensive management and through reform and a restructuring of assets.

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The time has come for China's road transportation enterprises to increase their scale through intensive management and through reform and a restructuring of assets.

The increase of scale is crucial in light of China's sustained economic development, the rapid expansion of its road network and in light of the fierce competition from foreign enterprises in China.

Wang Zhanyi, chairman of the China Road Transport Association, made the remarks at the 2002 China Road Transport Development Forum in Beijing on Tuesday.

Wang said that before the 1980s, highway transportation was managed exclusively by state-owned enterprises. Since the mid-1980s, the sector has been largely deregulated, with private enterprises injecting new vitality into the industry.

While the number of transport companies has grown, most of the companies remain small and uncompetitive.

In the late 1990s, as a result of reform and asset restructuring, some large transportation groups, such as the New National Express Group, began to appear in provinces including Hubei, Heilongjiang, Zhejiang and Shandong.

Reform and asset restructuring, characterized by intensive management in scale, have helped the transportation industry to advance in focus from expansion in terms of the number of enterprises to the promotion of quality.

Recently, the Jielong Express Group of Hubei Province merged with three other companies in this province to form a larger one. Wang said that Jielong's example is serving as a model for those who wish to develop in scale through intensive management.

Chen Shujing, general manager of a transport company in southwest China's Chongqing municipality, recently told journalists that she feels increasing pressure from international and domestic competition. The only solution, she said, is to join forces with a strong partner to confront the intense competition.

Wang also commented that attracting foreign investment and generating income through the stock market are other effective ways to develop the enterprise in scale, and stressed that the road transport companies in China should choose the most suitable method to make the great leap forward in line with market demand.

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