Infrastructure in China: Sustaining quality growth (PDF 3.3MB) - KPMG

INFRASTRUCTURE

Infrastructure in ChinaSustaining quality growth

kpmgcomcn

copy 2013 KPMG International Cooperative (ldquoKPMG Internationalrdquo) KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated

ContentsIntroduction

12th Five-Year Plan

Roads

Railways

Metro and light rail

Ports

Airports

Water and waste

Energy

KPMGrsquos Global Infrastructure practice

4

6

10

14

18

20

24

28

34

42

3Infrastructure in ChinaSustaining quality growth


Introduction

1 World Urbanization Prospects The 2011 Revision (httpesaunorgunupWallchartsurban-rural-areaspdf) wwwunpopulationorg

Both the world economy and the Chinese economic landscape have faced major challenges since 2009 in the aftermath of the global financial crisis Gross domestic product (GDP) growth continued in 2009 2010 and 2011 bolstered by support from the RMB 4 trillion government stimulus package announced in late 2008 but growth rates slowed from the double digit annual rates previously achieved Moreover the continuing weak recovery of many economies overseas and the impact of tighter domestic monetary policy and other administrative measures implemented to tackle Chinarsquos hot property sector in particular resulted in generally tougher business conditions in 2011 which continued into 2012 However growing signs could be seen in the latter part of 2012 of a more stable Chinese economy emerging which resulted in fourth quarter GDP growth of 79 percent and which helped bring the annual GDP growth for 2012 to 78 percent

In this publication we outline the key trends and developments in the Chinese mainland infrastructure sector since 2009 a period in which the sector benefited significantly from the acceleration of infrastructure projects as part of the above stimulus package We also discuss the implications of the latest Five-Year Plan (2011ndash2015) which sees a shift in emphasis from the rapid economic growth of previous years to higher quality sustainable growth for the future

The recently closed 18th Party Congress saw a new generation of leadership coming to the fore who are set to steer Chinarsquos development for the next 10 years Among many other important initiatives the new leadership announced lsquobuilding an ecological civilisationrsquo as an official policy initiative together with economic political cultural and social developments In addition an ambitious goal was set that by 2020 both GDP and average individual income would double their current levels These initiatives convey a message of creating a high-quality standard of living for the citizens Demand for infrastructure particularly those related to peoplersquos livelihood and the environment will be strong

We are seeing greater opportunities for both domestic and foreign players to invest private sector capital in infrastructure projects The fiscal constraints faced by local governments on the frontline of infrastructure construction and development are creating conditions that may encourage faster development of the alternative financing and procurement methods seen in mature Western economies Central government support and policy initiatives in this area will be areas to watch in the medium term

Over half of the population now live in urban areas (681 million people out of a total 134 billion at the end of 2011) and the United Nations forecasts that the proportion of urban dwellers will reach 75 percent by 2050 (another 300 million plus individuals)1 Whether the pace of urbanization will continue as expected over the next 30 to 40 years is uncertain but it is likely there will be continuing demand for more and better infrastructure as new urban areas develop and existing cities expand

As China moves ever closer to being the largest economy in the world its growth and development will remain at the top of the agenda for politicians business leaders economists and scholars both inside and outside the country Enhancing infrastructure such as water power transport communications education and healthcare which are needed to support nearly all aspects of modern life will be vital ingredients for achieving sustainable high quality growth in the future

Stephen Ip Peter Fung

Partner and Head of Government amp Infrastructure sectors KPMG China

Global Chair KPMG Global China Practice

4 Infrastructure in China Sustaining quality growth




12thFive-Year Plan



On 14 March 2011 the National Peoplersquos Congress approved a new national development program for the five years to 2015 The plan marks a turning point in Chinarsquos economic development no longer is the emphasis on headline growth Rather China seeks lsquohigher quality growthrsquo Having raised the living standards of hundreds of millions in the last 30 years China is now seeking sustainable growth through overcoming challenges such as pollution intensive energy use and resource depletion To achieve this higher quality growth the government intends to move Chinarsquos production capabilities up the value chain reduce the disparity between differing social and geographic groups and promote domestic consumption and by doing so make more efficient use of the countryrsquos resources2

The 12th Five-Year Plan identifies seven priority industries for public and private sector investment the aim of which is to move China up the value chain and promote better energy efficiency and sustainable use of resources

bull New energy

bull Energy conservation and environmental protection

bull Biotechnology

bull New materials

bull New IT

bull High-end equipment manufacturing

bull Clean energy vehicles

Key infrastructure developmentsThe 12th Five-Year Plan targets a continuation of the shift in focus to domestic consumption seen over the last five years and production of higher value-added products This should see changes in transport and logistics needs as well as reduced emphasis on investment opportunities in export-oriented industries However it will also lead to more opportunities for improving technology levels and quality in the transport service industry Sustainability and a lower carbon economy are also key focuses of the latest Five-Year Plan This is likely to have further implications for the transport and logistics sectors as they are both heavy

emitters of carbon dioxide The corresponding challenges and opportunities involve embracing the greater demand for domestic logistics arising from the added focus on internal consumption-led growth Coal-based power generation and other carbon-intensive industries will be the most affected by sustainability targets although more opportunities in the renewable and clean energy sectors should be evident

With the 12th Five-Year Planrsquos seven percent annual GDP growth target for the period up to 2015 and the government starting to look more closely at alternative sources of finance infrastructure investments are increasingly being opened to private capital Relaxed rules on Qualified Foreign Institutional Investors and other forms of direct and indirect investment have improved the outlook Foreign investments have traditionally been welcomed where technology or expertise are lacking in China For example renewable energy and nuclear power have seen substantial injections of local and foreign capital for that reason with French firm Areva and on-shore wind power manufacturers such as Vestas and Suzlon all participating in the Chinese market3

The 12th Five-Year Plan focuses on moving China up the value chain and to a more sustainable model of quality economic growth and many opportunities are emerging in higher value-added technologies Substantial investments in roads railways and other kinds of economic infrastructure have been integral to the Chinese growth story and seem likely to continue to be so as China seeks to become less reliant on exports and more reliant on the domestic market

On 5 and 6 September 2012 the National Development and Reform Commission (NDRC) approved the launch of 55 major infrastructure projects (see table on page 8) Ten environmental protection projects have been approved nine of them initiated in western China while seven projects have been initiated for port construction and channel reconstruction five in the east and two in central China There are a total of 13 highway construction projects evenly disbursed throughout the eastern central and western regions of China Finally 25 rail transit and intercity railway projects have been approved 16 in the east six in the west and three in central China The majority of NDRC-approved infrastructure projects (45 percent) are for rail transit and intercity railways The eastern region still leads the central and western region in terms of infrastructure development and approved projects


2 12th Five-Year Plan 3 Business Monitor International China Infrastructure Report Q2 2012


Infrastructure projects announced by NDRC in September 2012

Region

Industry East Middle West Total

Environmental protection - 1 9 10

Port construction and channel reconstruction 5 2 - 7

Highway construction 4 3 6 13

Rail transit and intercity railway 16 3 6 25

Total 25 9 21 55

Source National Development and Reform Commission (NDRC)

The following information is related specifically to each individual provincial plan These plans have been approved but their funding has not been initiated

In 2012 many provinces and cities also officially announced major construction plans in the infrastructure field In July Guangdong province announced 44 new projects with a total investment of RMB 2353 billion Traffic and urban construction account for close to 60 percent of these projects In August Guizhou approved development of its ecological culture tourism industry and close to RMB 100 billion will be used for transportation hospitals and other infrastructure construction One of the most ambitious investment plans has come from Sichuan province with an announcement on 25 September 2012 to spend as much as RMB 37 trillion by 2013 The plan specifies 2242 key projects including around RMB 15 trillion for infrastructure construction with other industrial projects and projects for peoplersquos well-being and social welfare and environment accounting for the balance Including Sichuan the total announced expenditure by other regions and cities up to September 2012 is over RMB 10 trillion4

The local governmentrsquos investment plans in the past several months can be attributed to the central governmentrsquos plans to focus on transportation infrastructure and construction Nearly 20 percent of funds focus on environmental protection and new energy Transportation infrastructure investment has a strong impact on improving domestic demand from traditional industries such as steel and cement Presently these traditional industries face a serious over-capacity problem but the stronger demand will help reduce the negative effects of production over-capacity On the other hand environmental protection and new energy have become major components of Chinarsquos 12th Five-Year Plan Significant investment plans in these industries show the increasing attention from local governments on the

importance of stimulating domestic demand in the short term and sustainable growth in the long term

To ensure high quality economic growth upgrading industries has gradually become a common approach of local governments We can observe that most of the investment focuses on the key provinces and cities of the lsquoGreat Western Development Strategyrsquo (西部大开发) and the development of the western regions in China in the next five to ten years Inner Mongolia Shaanxi and Gansu are provinces where most of Chinarsquos resources lie but at the same time are major provinces that face serious pollution problems Investments in environmental protection and highway construction in these regions fit the local development characteristics and also help local governments create more potential investment demand On the other hand transport construction within the eastern cities is concentrated on rail transit the key purpose is to ease traffic congestion and shorten intercity travel time

At the same time local governments are also paying more attention to the quality of economic growth and trying to solve local problems encountered in the process of developments Limited financing channels fund shortage low investment returns and recurring construction are key challenges that local governments are currently facing

In order to ease financing pressures the Ministry of Housing and Urban-Rural Development (MOHURD) has issued a notice which lays out the implementing opinions (the lsquoopinionsrsquo) on further encouraging private capital into municipal public utilities The opinions state that private investment in the construction of municipal public utilities will be eligible for the same treatment as other types of investment and not subject to any additional conditions


4 Shanghai Daily 25 September 2012 lsquoSichuan invests US$582b to lead local spendingrsquo httpwwwshanghaidailycomnspBusiness20120925Sichuan 2Binvests2BUS582b2Bto2Blead2Blocal2Bspending


MOHURDrsquos opinions state that direct investment of private capital is encouraged to be made through wholly-owned companies equity and cooperative joint ventures as well as asset acquisition in the construction and operation of projects in urban gas supply heat supply sewage treatment and household garbage disposal Private capital is encouraged to participate through equity and cooperative joint ventures in the construction of transport facilities like roads in cities bridges railways and public car parks

The opinions stress that based on the characteristics of different sectors and circumstances in different regions the government can resort to methods such as shareholding or appointment of public-interest directors to retain the necessary control over these utilities Furthermore the opinions emphasize that the government should strengthen the monitoring of prices and costs of municipal public goods and services A regular supervision system on the costs of goods and services should be instituted to collect updated information on enterprisesrsquo operating costs Such information will be used by the government as a basis for setting prices with a view to putting in place a scientific reasonable price setting mechanism to prevent unreasonable hikes in costs and prices5


5 HKTDC 1 August 2012 lsquoPolicies to encourage private investment in municipal public utilitiesrsquo httpeconomists-pick-researchhktdccombusiness-newsarticleBusiness-Alert-ChinaPolicies-to-encourage-

private-investment-in-municipal-public-utilitiesbacnen11X0000001X07XN8Vhtm


Roads



Years of continual growth in road construction have given China a vast network of highways and expressways especially in the eastern regions of the country Since 2000 Chinarsquos expressway network has grown annually by over 16 percent6 now making it the second largest in the world at over 75000 km by 20127

The 11th Five-Year Plan outlined an increase in the National Trunk Highway System (NTHS) to 65000 km by 2010 However helped by the 2008 government stimulus package at the end of 2010 the NTHS network was over 74000 km The 12th Five-Year Plan has outlined further expansion targeting an increase in the NTHS to 83000 km by 20158 linking at least 90 percent of cities with populations of over 200000 The proportion of Class 2 or above highways is expected to increase from 62 percent of the total highway network to 70 percent comprising a total of 650000 km by 20159 an increase of 45 percent from 2010 levels10

With the slowdown seen in Chinarsquos GDP growth rate in 2012 there was a small decrease in the proportion of road investment in the first half of 2012 comprising 44 percent of total fixed asset investments in China for the period down from 53 percent in H1 201111 Nonetheless various factors suggest more construction is still needed in the years ahead

bull Increased focus on domestic consumption driving increased freight and logistics transport within China and the need to reduce the costs of such transport

bull Forecast annual GDP growth of seven percent or more beyond 2012

bull Demand for vehicles is still substantial China is already the worldrsquos largest car market but per capita ownership is significantly lower than more developed nations

bull Highway investment is an important factor in supporting the success of Chinarsquos lsquoGo Westrsquo policy

On the supply side the national highway plan is structured around a 34-trunk network seven highways radiating from Beijing nine north-south lsquoverticalrsquo expressways and 18 lsquohorizontalrsquo expressways12 The system will connect more than one billion people around China as well as major ports

180

160

140

120

100

80

60

40

20

2002

Num

ber o

f new

veh

icle

regi

stra

tions

(in

hun

dred

thou

sand

s)

2003 2004 2005 2006 2007 2008 2009 20100

Passenger Truck Others

New vehicle registrations in China

Source China Statistical Yearbook 2011 Vehicle Registrations

and railway infrastructure There are also a number of smaller rural road constructions planned with the 12th Five-Year Plan stating that by 2015 all townships and 90 percent of villages will be accessible by road


6 KPMG Analysis7 Business Monitor International China Infrastructure Report Q2 20128 12th Five-Year Plan9 Transportation 12th Five-Year Development Plan 201210 KPMG Analysis

11 China Bureau of Statistics Investment in Fixed Assets July 201212 12th Five-Year Plan


Private sector involvementThe majority of highway and expressway construction and maintenance are traditionally conducted by local city governments but this poses significant pressures on their fiscal budgets

Since the establishment of the first Build Operate and Transfer (BOT) concession in the 1990s the private sector has been more actively courted to participate in the toll roads sector However while there are now more than 70 percent of the worldrsquos toll roads within China13 the private sector still plays only a minor role in Greenfield construction accounting for a mere seven percent of expressway financing in China14

Nevertheless there has been an increasingly active secondary market as local authorities and domestic construction companies start to look to release capital from their assets Previously this was facilitated through initial public offerings (IPOs) the Jiangsu Zhejiang Anhui Shenzhen Huayu and Sichuan Expressway companies are

all listed on the Hong Kong Stock exchange as H-shares Much of the capital raised through an IPO is targeted for reinvestment into building more expressways Infrastructure focused funds and other operators have also begun to invest in Brownfield assets although deals have often been aborted due to valuations that needed to be supported by overly optimistic traffic forecasts However fundamentals appear strong with a large recovery in traffic in 2010 and double digit growth in revenues for the Jiangsu Expressway Zhejiang Expressway Shenzhen Expressway and Sichuan Expressway15

The July 2012 China Insurance Regulatory Commission (CIRC) decision to allow insurance companies to invest up to 10 percent of their balance sheets in both real estate and private equity16 as well as expected growth in infrastructure investments from other pension and equity funds means pricing for good operating assets is becoming increasingly competitive Nonetheless with private sector investment in fixed road assets increasing 397 percent year-on-year for the first half 201217 solid growth in the roads sector looks likely to continue

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Tota

l len

gth

of e

xpre

ssw

ays

(in

ten

thou

sand

kilo

met

ers)

Growth of expressways in China

Source China Statistical Yearbook 2011 12th Five-Year Plan


13 Xinhua News Agency 6 August 2007 14 Thomas White Global Investing BRIC Spotlight Report Toll Roads in China

June 201115 Thomas White Global Investing BRIC Spotlight Report Toll Roads in China June 2011

16 Asian Venture Capital Journal 267201217 China Bureau of Statistics

0

1

2

3

4

5

6

7

8

9


The Ministry of Communications planning department said that present highway construction funding is sourced as follows 6ndash7 percent from central financial investment 20ndash30 percent from local governments and the remainder from commercial banks and policy bank loans as well as foreign capital and private capital investment Introducing private capital played a very significant role in easing pressure from other sources and allowing the government to redirect funds elsewhere

Guizhou is one example of maximizing the degree of private investment related to traffic construction When deciding on the construction model Guizhou adopted BOT combined with EPC (engineering procurement construction) as a means to assist the government By Guizhou introducing private capital into the construction of highway infrastructure the local operation increased the diversification of funds and helped solve the problem of fund shortage It also helped break up any monopolistic competition and improved the industryrsquos management standards and efficiency



Railways



The November 2008 government stimulus package and the 12th Five-Year Plan both place railways at the center of Chinarsquos long-term infrastructure development strategy In 2009 there were significant investments in high-speed rail and a target of 120000 km of total track by 202018 was outlined during the stimulus program The 12th Five-Year Plan has continued on with this investment pipeline with a total high-speed track of 40000 km set to be completed by 2015 and the total track target of 120000 km brought forward to 201519 To attain these ambitious targets annual investments of RMB 800 billion into railway infrastructure were previously announced20

However the July 2011 Wenzhou rail incident caused a substantial revision of planned expenditures The fallout from the incident began to raise fears over the safety and reliability of the system as well as the financial health of the Ministry of Railways (MoR) Total debts of RMB 19 trillion21 raised concerns that the central government would have to step in and work at a large number of sites were either stopped or slowed down Investment for the year was reduced to a planned RMB 400 billion22 investments in fixed railway assets shrank 369 percent in the first half of 2012 down from 19 percent of total investment expenditure to just one percent23 The sector was reported to have recorded a RMB 7 billion loss in the first quarter of 201224

There have also been some positive developments with the central government supporting the MoR through actions like halving the rate of tax paid on interest earnings of bond holders25 There has also been a rebound in planned investment throughout the year with an increase from RMB 400 billion to a planned RMB 516 billion26 although much of

this has not been deployed yet27 Of the worksites stopped as a result of the Wenzhou incident around 70 percent have resumed construction and three successful bond issues throughout the year by the MoR have improved their fundraising outlook substantially It is expected that they will use their allowance of RMB 150 billion in bond issues for 2012 to continue the recovery in construction

Despite the MoRrsquos difficulties in July 2012 the state council reiterated targets of 40000 km of high-speed track by 2015 and a total of 120000 km of track by 2015

One of the goals of the high-speed rail program is to free track capacity for freight logistics A vital aspect of the rail freight network is the transportation of coal and minerals In 2010 coal accounted for 506 percent of total freight traffic and metal ores another 12 percent28 This is likely to be adversely affected by the sustainability targets in the 12th Five-Year Plan and a reduction on Chinarsquos dependence on coal-fired power generation However this will be accompanied by increases in domestic consumption and its need for freight transport as evidenced by the four percent year-on-year increase in the June freight traffic29

Despite these medium-term difficulties the longer term fundamentals of railway development appear strong The 12th Five-Year Planrsquos focus on sustainability and freight railrsquos nature as a relatively lower carbon emission mode of transport and the success of the lsquoGo Westrsquo policy is dependent on building effective transport links and rising domestic consumption needing increased logistical capabilities all suggest that there is still significant room for continued rail investment

18 KPMG Infrastructure in China Foundation for Growth 20091912th Five-Year Plan20 Business Monitor International China Infrastructure Report Q2 201221 Ministry of Railways Bond prospectus July 201222 Business Monitor International China Infrastructure Report Q2 201223 China Bureau of Statistics

24 Ministry of Railways Bond Prospectus25 Xinhua News Agency Chinarsquos railways ministry auctions CNY30bn Bonds 8112011 26 Ministry of Railways Bond Prospectus July 201227 Ministry of railways China Bureau of Statistics28 China Bureau of Statistics29 China Bureau of Statistics

2006400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013

Chinarsquos railway fixed asset investment

Source China Bureau of Statistics China Daily lsquoChina to Cut Railway Investment in 2012rsquo 20111224 Ministry of Railways

Source World Bank

Rai

lway

inve

stm

ent e

xpen

ditu

re

(in

RM

B b

illio

n)



Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou

Baoji Xirsquoan Lanzhou

Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu

Private sector involvementThere have been limited methods to invest directly into railway for the private sector as foreign companies are not permitted to have a controlling interest in the construction or operation of rail networks or passenger services However due to the MoR facing more financial challenges there are an increasing number of opportunities for the private sector

The MoR announced in May 2012 that private capital will be given equal market entry access in an effort to make its railways more market competitive This is good news for local firms as there is substantial opportunity to invest in Chinarsquos railway infrastructure by tendering contracts to build and operate segments of track or through more indirect means Qualified Foreign Institutional Investors (QFII) are now allowed to hold railway bonds and with a July 2012 China Securities Regulatory Commission (CSRC) announcement to reduce the level of assets under management to qualify for QFII status from USD 5 billion to USD 500 million there are a significant number of new players entering the financing market and new methods to invest in the railway sector

Chinarsquos high-speed railway network plan

Maximum speed of railway

350 kmh (220 mph)

200ndash250 kmh (125ndash155 mph)

Source Ministry of Railways and KPMG analysis



Some foreign firms have also begun tendering contracts from the government such as GE Bombardier and Kawasaki Heavy Industries However in many of these cases there has only been an opportunity to supply componentry rather than into railways more directly

For foreign or private investment to enter the market the hope is that they can recapitalize their investment in three to five years However due to specific characteristics of railway construction the return cycle is usually between 15 to 20 years If the government wants to attract more funds from non-state capital into the infrastructure projects they need to spend more time solving the dilemma of their monopoly over the railroads and the unclear distinction between the function of government and enterprises These problems can dampen foreign investorsrsquo interest in entering this field Under the current conditions foreign enterprises are only able to capture limited opportunities in spare parts control equipment and other ancillary equipment manufacturing aspects

Source of funds for railway investment

Others11

State budget 12

Domestic loans 42

Self-raised funds 34

Foreign investment

1

Self-raised funds refer to extra-budgetary funds for investment in fixed assets received during the reference period from central governments enterprises and institutions

Source Weighted Average of Railways Investment Sources 2006ndash2010 China Statistical Yearbooks






Metro and light railway are critical in alleviating urban traffic congestion which is becoming increasingly prominent in Chinarsquos large and emerging cities In 2011 Shanghai and Beijing carried over two billion passengers in 2011 placing them alongside Guangzhou in the top six busiest metro systems in the world30 Due to constantly increasing demand for metro links the 12th Five-Year Plan has outlined extensions to the Shanghai Guangzhou Shenzhen and Beijing systems along with new completions in Tianjin Chongqing Shenyang Changchun Wuhan Xirsquoan Hangzhou Fuzhou Nanchang and Kunming and plans for more systems in other cities

By 2015 it is estimated that there will be over 2100 km of metro and light rail track laid31 However opportunities to participate for foreign firms are limited Hong Kongrsquos MTR Corporation (MTRC) is the most active and highest profile foreign player in the market and with the need for more financing arrangements there are likely to be newer methods of participation as well To date however foreign investors have been more successful supplying technical equipment and solutions to the sector

Private sector involvement Under the current government expanding plan private investors will have more and more opportunities to participate in Chinarsquos metro and light rail construction than ever before

On 28 February 2011 Alstom the French multinational company announced in Beijing that its two joint ventures in China secured a EUR 140 million contract to provide Beijing metro line 6 with the latest traction system and one of the worldrsquos leading signal systems On the same day Air Train International Group held a press conference in Beijing to introduce the H-Bahn sky train and announced the promotion of the H-Bahn sky train in China According to Air Train International Group the H-Bahn sky train can save on plant property and equipment cost and requires a short construction time

30 China Bureau of Statistics31 China Daily 16 June 2009

Hitachi group has also gained access to Chinarsquos metro and light rail market Their product contains a new generation of urban traffic system that covers high speed trains commuter trains monorail products signal control support operation management Intergrated Chip (IC) card ticketing user action support and other systems The group has installed its solution in a Tianjin project which was funded by the China and Singapore governments The system is also being promoted in Guangdong province

Excluding equipment manufacturing advantages foreign enterprises have also participated in Chinarsquos metro design and construction MTRC in particular is involved in the operations of Beijing metro line 4 Shenzhen Longhua line phase 2 and more recently the new Hangzhou metro line 1 (opened in November 2012) which MTRC operates under a joint venture concession for 25 years with Hangzhou Metro Group

Given that the 12th Five-Year Plan aims to increase metro and light rail construction around many of the first- and second-tier cities in China this industry presents significant opportunities for foreign and private capital Although participation methods are still limited these companies can find other scaled benefits that will allow them to participate in Chinarsquos metro and light rail industry and advance the industry at a significant pace in the next five to ten years



Ports



Shanghai is the worldrsquos busiest container port by throughput Two other Chinese cities are in the top five and nine in the top 20 with further expansion in the pipeline32

32 Government of Hong Kong SAR Marine Department access 27 August 2012 httpwwwmardepgovhkenpublicationpdfportstat_2_y_b5pdf

33 China Daily lsquoFreight Financial Ambitions take Flightrsquo 2082012 httpwwwchinadailycomcncndy2012- 0818content_15685546htm

34 12th Five-Year National Development Plan 35 China Bureau of Statistics36 12th Five-Year Plan

Rank CityContainer volume in 2011 (in million TEU)

1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617

The major ports are located around Chinarsquos three key manufacturing hubs the Pearl River Delta around Guangdong the Yangtze River Delta around Shanghai and the Bohai Rim around BeijingTianjin

With the global economy still facing challenging headwinds Chinarsquos ports have also seen a substantial slowdown in growth with throughput in national ports (above a designated size 10 million tons for inland 15 million tons for coastal) up 72 percent representing a 61 decline of percentage points from the growth rates seen a year ago Total national container throughput fell in year-on-year growth terms by 43 percent but perhaps more significantly domestic throughput growth fell 113 percent year-on-year to 30 June 201233

Despite the weaker activity in 2012 and the volatile growth rates shown above the longer-term outlook for this sector appears more robust Ports and shipping feature prominently in the 12th Five-Year Plan Though coal and other fossil fuels are significant throughputs and are likely to be adversely affected by the sustainability focus there are still plans to construct 440 deep-water berths equipped for vessels 10000 tons or above34

In the half year to 30 June 2012 despite the lower throughput numbers fixed asset investment in the waterways sector grew 199 percent 35 indicating confidence in the long term value of port infrastructure For example Zhanjiang Port in Guangdong is continuing to expand its berthing capacity in anticipation of a number of substantial projects from firms such as Baosteel and Sinopec

The 12th Five-Year Plan has also highlighted Chinarsquos need for better inland transport systems providing for a number of inland waterway expansions Channel extensions in the Yangtze estuary increasing the capacity of Xijiang River trunk and the Beijing-Hangzhou canal improvement project are all intended to be completed by 201536

Breakdown of bulk throughput

Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22

Source China Statistical Yearbook 2011

Top 10 Mainland China ports

CityContainer volume in 2011 (in million TEU)

World ranking

Shanghai 3174 1

Shenzhen 2257 4

Ningbo-Zhoushan 1472 6

Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28

Worldrsquos busiest container ports

TEU = Twenty-foot equivalent unit

Source World Shipping Council





Private sector involvement In the wake of the global financial crisis Chinese foreign trade was seriously affected by weak overseas demand but port investments have shown no sign of slowing down According to data from the Ministry of Transport coastal port investment increased to RMB 80 billion in 2011 Other than the active participation of state-owned and domestic privately owned enterprises there is also a clear trend showing foreign investorsrsquo interest in port construction in China In June 2012 Maersk group and Ningbo port signed a USD 43 billion agreement to mutually invest and manage the No3 4 and 5 berths of Meilong pier at the Meishan bonded harbor area Through August 2012 Maerskrsquos investment in the Ningbo port reached an annual growth rate of 85 percent despite the weaker global economic climate and shrinking foreign trade in China

Maersk is one example of a successful mutual partnership approach in China but Chinese ports are not without some serious issues that need to be considered for example improving service quality managing excessive competition and tackling homogeneity Furthermore it is reasonable to expect that Chinarsquos port investment is likely to shift from high growth to a more moderate growth mode Cooperation between ports also needs to be further expanded in order to achieve enhanced integration of regional ports Thus foreign investment in Chinese port construction not only needs to pay more attention to local government policies and the future trend of foreign trade but also needs to consider the target portrsquos geographic location management capability as well as other issues regarding differentiation and integration

For merger and acquisition activities to continue strategic alliances with surrounding small ports should be forged together with the development with and cooperation from larger ports Special consideration should also be given to a portrsquos location and geographic or regional advantages

that the port possesses Such mergers and acquisitions between ports may also be a future trend for the purpose of resource integration demographically value-added andor complementary functions associated with different sized ports

Presently domestic private capital is mainly concentrated on small and medium-sized coastal and inland ports in China This is because domestic private enterprises do not have an abundance of capital or the ability to invest in larger ports Therefore for the large ports private capital is more concentrated on warehousing freight forwarding truck transportation customs clearance and packing activities

Liaoning Jinzhou Port is the first domestic private capital-held coastal port In Jinzhou Port Co Ltd the original state-owned port capital accounts for only 22 percent domestic private capital accounts for 33 percent and private capital shares including employees holding shares of more than 50 percent As a result of the participation of domestic private capital there has been a significant change in the Jinzhou port system and mechanism The port construction and production operations developed rapidly and achieved positive economic benefits37

However if China cannot attract domestic private capital the most likely way to privatize the ownership of ports is to actively attract more foreign capital This will broaden financing channels for port construction and greatly reduce the proportion of state-owned capital

Sino-foreign joint ventures for construction and management are still the main form of Chinese portsrsquo privatisation There are significant overseas investors in coastal ports primarily through minority strategic stakes such as those by Hong Kong players and other worldwide port operators According to NDRCrsquos 2012 Catalog of Foreign Investment Industries (effective 30 January 2012) foreign private sector involvement is encouraged with up to 100 percent foreign ownership permitted

37 International Maritime Information 1 December 2007 ldquoThe diversification of port investment development in Chinardquo httpwwwsimicnetcnnews_showphpid=5683





Airports



38 IBISWorld Airports in China May 201239 ldquo2011年全国机场吞吐量排名rdquo Civil Aviation Administration of China 2012-03-21 httpwwwcaacgovcn I1K3201203 40 rdquo2011年全国机场吞吐量排名rdquo Civil Aviation Administration of China 2012-03-21 httpwwwcaacgovcnI1 K3201203P020120321570053265625xls 41 Center for Aviation Asian Airport Capex Report 201142 IBISWorld Airports in China May 2012

Increasing GDP over the past 10 years is helping fuel an increase in air travel Passenger volume through Chinarsquos airports increased 124 percent in 2011 although that represents a slight slowdown in growth rates of 2010rsquos 161 percent growth Despite this airport revenues still rose 167 percent to nearly RMB 49 billion38

Both domestic and international passenger traffic is growing quickly In 2004 242 million Chinese travelled domestically By the start of 2011 this was up to 570 million39 This has benefited larger regional airports which are starting to achieve more substantial traffic numbers

In 2011 China had more than 180 airports representing 225 percent overall growth since 2007 when 147 airports were in operation However to ensure availability of capacity as travellers near 700 million per annum the government has announced plans to build 50 more by 201540 RMB 46 billion

in airport construction investment was incurred in 2011 alone with another RMB 100 billion expected over the next five years41

The five largest airports in China ndash Beijing Guangzhou Shanghai Pudong Shanghai Hongqiao and Chengdu ndash make up around 366 percent of airport passenger traffic in 201142 However as passenger numbers have increased industry concentration has decreased In 2007 there were just 10 airports with more than 10 million passengers By 2011 there were 21 and the share of total traffic of the largest 10 has consistently declined43 Beijing Capital Airport handled 78 million passengers in 2011 growing 63 percent making it (by passenger traffic) the largest passenger airport in China and Asia second only to Atlanta International in the world Shanghai Pudong is the largest cargo airport handling 31 million tons in 2011 one-third of Chinarsquos total44

43 rdquo2011年全国机场吞吐量排名rdquo Civil Aviation Administration of China 2012-03-21 httpwwwcaacgovcnI1K3201203P020120321570053265625xls


Passenger traffic of Chinarsquos top 10 airports

Source Civil Aviation Administration of China httpwwwcaacgovcnI1K3201203P020120321570053265625xls

2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)

Percentage of passengers using C

hinarsquos top 10 airports

60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0

Passengers using top 10 airportsTotal number of passengers

Sustaining quality growth Infrastructure in China 25



Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming

Passenger through-put per annum

gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo

Shanghai HongqiaoShanghai Pudong

Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing

Source CAAC Statistical Report 2008

Major airports in China



The government is continuing its Hub-and-Spoke network much like the United States model to move rapidly growing tons of cargo and passenger numbers Between 2011 and 2015 50 new airports will be opened taking the total to 230 in line with the long-term goal set in 2008 of having 244 operational airports in 2020 and it is estimated that by 2030 another 5000 airplanes will be needed to service demand45

A central piece to the aviation development plan is a new Beijing Airport to accommodate the rapid growth in both domestic and international passengers46

In September 2012 NDRC approved the Gansu province Dunhuang airport expansion proposal The main constructions are a new 6000 sq m terminal expansion of the parking lot by 5500 sq m as well as 46700 sq m of related commercial facilities NDRC also approved a new Holingol airport feasibility project in the Inner Mongolia autonomous region The main constructions are a new 27 km long runway a new 3000 sq m terminal ramp parking space for three aircrafts and other related commercial facilities In addition NDRC approved the Shanxi Linfen airport western-imposed reconstruction project comprising construction of a new 26 km long runway 4200 sq m terminal ramp parking space for four aircrafts and other related commercial facilities

According to NDRCrsquos announcement all are expected to be completed and operational by 2020 and meet or exceed additional passenger projections ranging from 150000 (Holingol Airport) to 960000 (Dunhuang Airport) additional passengers per year

Private investors According to the latest Catalog for Guidance of Foreign Investment Industries foreign investors are allowed to take up to a 49 percent equity interest in the construction and operation of airport activities including terminals and runways Private investors may own up to 100 percent of regional airports but are limited to a 49 percent stake in major airports such as capital cities of provinces and autonomous regions municipalities and some selected large cities

One of the key challenges for private investors in Chinarsquos airports has been the difficulty to create revenue from secondary activities such as shop leases car parking and advertising Many airports have had difficulty generating the critical mass of traffic to drive strong non-aeronautical

revenue streams Concessions such as rent and advertising currently make up 23 percent47 of Chinese airport revenue substantially lower than some international counterparts such as Germany where airports have seen as much as 332 percent48 or the USA where non-aeronautical revenues can account for over 50 percent of total revenue leaving significant room for growth in their non-aeronautical platform

The relative lack of international travel from within China limits duty-free shopping and the Hub-and-Spoke network focuses passenger transit times in only a few airports Thus commercial retail leases especially in more regional locations and other non-aeronautical revenues have been weaker than in other airports of similar scale worldwide Given the tightly regulated nature of airport fees charged a lack of non-aeronautical revenue is a substantial problem However as pure passenger numbers grow so have the value of advertising leases etc driving more revenue growth for airport operators

Most of the private investments in Chinarsquos airports have come from operational investors such as HNA Airport Group Hong Kong Airport Authority Fraport AG Singapore Changi Airport and Aeroport de Paris With air transit ridership at just 015 trips per capita industry penetration is low thus providing substantial expansion opportunities for the future

International financial investors have also shown interest in the sector due to the expectation of longer term passenger traffic growth (for example GIC is a significant minority shareholder in Beijing Capital International Airport) However accepting structural features such as regulatory control over airport fees have proved challenging and more attention has been given to auxiliary services such as catering and logistics

The other key issue for investors is the timing of investment in relation to the capital expenditure cycle Capital investment by airports is generally lockstep and large (for example the building of a new terminal or expansion of runways) and there can be a lag for cash inflow for such an investment Timing therefore has a significant impact on the risk profile of an investment

45 American Chamber of Commerce in the Peoplersquos Republic of China (AmCham China)46 NDRC 12th Five-Year Plan 47 IBISWorld Airports in China 201248 Zenglein M amp Muller J (2005) Non-Aviation Revenue in the Airport Business ndash Evaluating Performance Measurement for a Changing Value proposition Berlin School of Economics



Water and waste



49 China Statistical Yearbook 201150 Ministry of Water Resources wwwmwrgovcn51 Ministry of Water Resources wwwmwrgovcn

Chinarsquos water marketChina has more than 100 cities with a population of 1 million or more and this sustained urban growth and the continued economic development have necessitated greater domestic

utilities infrastructure49 To ensure the water quality and sanitation of its municipalities as well as to improve its water efficiency the 12th Five-Year Plan has targeted substantial investments into the water and the environmental protection sector whilst encouraging the private sector to follow

Due to geographic factors China has limited and unevenly distributed water resources across the country Rainfall and water resources are primarily located in southern China while there have been significant shortfalls in the north of China Out of the 662 cities in China more than 400 are

Unified Water Charge - water scarcity charge + tap water charge + wastewater charge + infrastructure charge

WWTP payment

WWTP chargeDistribution paymentsWTP

payment Potable waterRaw water

Water Treatment Plant(WTP)

Distribution System toCustomer

Waste Water TreatmentPlant (WWTP)

Government(Bureau of Finance)

Customer

Municipal UtilityCompany

Structure of Chinarsquos water market

Growth of Chinarsquos water resources

RiverFlow of water

Flow of cash

Waste water Sludge

DischargePotable water

Discharge

suffering from water shortages with 110 classified as severe Alongside these challenges there has been no substantive improvement in water resources with water availability per capita of only 2220 cubic meters which is one quarter of the world average51

Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)



Recognizing the importance of water for sustainable growth the government remains committed to tackling the challenges of managing national water resources It has set a target of 30 percent reduction in water consumption per unit of GDP in the 12th Five-Year Plan compared with 2011 levels and to combat problems of water quality a number of pollution targets have been implemented ndash cuts to ammonia levels for the first time alongside cuts in chemical levels of nitrous oxides sulfur dioxides and chemical oxygen demand With the new ammonia targets new monitoring and compliance technologies will need to be implemented representing an opportunity for private sector providers

The government is also targeting an investment of RMB 380 billion on wastewater treatment systems including reuse over half of which is expected to be from the private sector52

representing a 14 percent increase in allocated investment over the previous plan In the first half of 2012 investment in fixed water assets was up 289 percent53 There are moves to a more market-oriented method of water allocation suggesting an awareness of the current inefficiency and inefficacy of much of the existing infrastructure Under the 11th Five-Year Plan wastewater treatment coverage increased from 52 percent in 2005 to 72 percent in 2010 but saw little sustained increase in water resources per person

Private sector involvementAccording to a January 2012 IBISWorld report lsquoWater Supply in Chinarsquo the market is relatively fragmented at the moment with the largest players in the water supply industry Beijing Waterworks Group Guangzhou Water Supply Corporation and Shenzhen Water Group Corporation holding just 21 percent 2 percent and 17 percent of the market respectively54 In wastewater treatment the market is more consolidated with French firm Veolia holding 13 percent of the market55

Foreign investors are encouraged to invest in water treatment and wastewater treatment plants in urban areas through wholly owned foreign enterprises or joint ventures With the current Five-Year Planrsquos goal of 85 percent wastewater treatment coverage nationwide and 90 percent in urban areas there is significant scope for investment56 Foreign shareholders are also permitted to own a maximum of a 49 percent stake in distribution networks through joint ventures with municipal companies

Due to the difficulties in ensuring the safety of groundwater which is a major component of Chinarsquos water production the government is restricting groundwater initiatives and in lieu is promoting the building and operation of desalination plants57 The desalination market is expected to grow by around 18 percent per annum over the next five years58

primarily in cities where water is particularly scarce Capacity is expected to reach between 22 and 26 million cubic meters daily thanks to RMB 20 billion of investment between now and 201559 Though desalination has traditionally struggled to be price-competitive water suppliers will be allowed to lsquoseek a rational price formation mechanismrsquo to reflect the scarcity in some islands and coastal cities60

helping make desalination a market-viable option

Key risks for concessionaires on water projects are often related to operations such as the ability to reflect the quality of influents on the quality of treated water or wastewater or the ability to pass on significant cost rises for key inputs such as chemicals or energy in a timely manner With pollution targets now firmly in place there exists extra costs and risks for investors who must not only be mindful of but actively monitor their impact on the environment

There are also opportunities in the application of specialist technologies such as water-reuse and sludge treatment as well as monitoring and compliance technologies for existing plants

52 12th Five-Year Plan53 China Bureau of Statistics54 IBISWorld Water Supply in China January 201255 IBISWorld Water Supply in China January 201256 12th Five-Year Plan57 12th Five-Year Plan

58 Business Wire Research and Markets China Water Desalination 67201259 China Business News China to Raise Seawater Desalination Capacity 1412012 60 China Business News China to Raise Seawater Desalination Capacity 1412012







61 China Dialogue China Waste the burning issue 201186 httpwwwchinadialoguenetarticleshowsingleen4739

62 Yongfeng Nie (2010) The technology and policy of urban solid waste disposal in China International Journal of Environmental Studies 672 183-19363 Yongfeng Nie (2010) The technology and policy of urban solid waste disposal in China International Journal of Environmental Studies 672 183-19364 Yongfeng Nie (2010) The technology and policy of urban solid waste disposal in China International Journal of Environmental Studies 672 183-19365 China Environmentcom 12 September 2012 lsquo$40 billion renewable resources industry is ready for developmentrsquo httpwwwcarcuorghtmlguonawaixingyedongtai201209129628html66 KPMG Infrastructure in China Foundation for Growth67 Yongfeng Nie (2010) The technology and policy of urban solid waste disposal in China International Journal of Environmental Studies 672 183-19368 CHINANEWS 24 September 2012 lsquothe 12th FYP will spend 50 billion yuan on garbage disposalrsquo

httphuanbaocnrcnfocus201209t20120924_510979472shtml

Solid wasteSustained GDP growth and continuing urbanization beyond 50 percent of the population requires a vast number of waste disposal facilities to be created With foreign investment encouraged and governments looking to attract private capital for Build Operate and Transfer (BOT) concessions there are a variety of opportunities available to target

Treatment will depend on the specific manner of the waste but is predominantly through reuse landfill or incineration China is the worldrsquos largest producer of municipal waste and to combat the waste management difficulties of an expanding economy and a rapidly urbanizing population the government has green-lit RMB 140 billion of waste management investments increasing capacity by 400000 tons per day by 2015 Most of this will be spent on incineration projects as the most efficient and effective method of waste disposal By the end of the 12th Five-Year Plan China will have 300 incinerators capable of handling around 30 percent of Chinarsquos waste disposal needs61

There are difficulties with incineration such as protests outside proposed and existing plants with people not wanting the potential pollution or other problems associated with their presence However due to the complex issues posed by urbanization namely that landfill is not an effective option there seems little choice to consider other means

Most incineration facilities are Waste to Energy (WtE) developments with active encouragement for alternative energy sources from the central government providing tax incentives and concessions to private investors However the calorific quality of Chinarsquos waste is often very low due to moisture content and the substantial organic matter presence At as low as 43 MJkg it is often below the necessary 5 ndash 6 MJkg to burn without additional fuel62 This required fuel has numerous associated problems Firstly it adds more pollutants to the atmosphere increasing the opposition from local residents and damaging the environmentally desirable nature of a WtE plant part of the reason for government concessions Secondly it significantly increases operational risks due to carbon reduction targets and movements in coaloil prices becoming central to the viability of the business

Due to the high moisture content present in Chinarsquos waste leachate management is extremely important As many older

sites have inadequate leachate management systems which can cause water contamination issues new efforts are being undertaken to mitigate such risks63 All new landfills must now use adequate leachate control systems the central government discourages all initiatives that could damage groundwater resources and has expanded investment to reduce the dependency of Chinarsquos waste disposal systems on landfills64

Although the main process of solid waste treatment is incineration there are some considerable environmental side effects China is looking to expand on the way waste is disposed One of these ways of maximizing total value is through recycling Presently China is operating inefficiently neither taking advantage of renewable resources and nor recycling products efficiently According to statistics each year 35ndash40 billion of recyclable resources is wasted in incineration which means that the renewable resource industry has plenty of growth potential Furthermore social benefits can be reaped from recycling Recycling would not only greatly reduce the production and investment cost of incineration but would also reduce the costs and hazards of pollution and save energy The economic and environmental benefits would create competitive markets in this industry65

Private sector involvement China encourages both domestic and foreign investors to invest in the solid waste treatment sector with local governments attracting both private and foreign capital for BOT and Build Operate and Own (BOO) concessions With substantial investment as well as government concessions to foreign players there are a number of growth opportunities

WtE projects may also be eligible for generation of carbon credits under the Clean Development Mechanism66 which provides additional sources of revenue Opportunities are also available for those wanting to participate with less direct investment such as the provision of Stoker-system technologies for incineration better leachate management systems for Chinarsquos landfill or more efficient incinerators less reliant on external fuel67

As Chinarsquos solid waste treatment industry developed relatively late it still needs the governmentrsquos strong support BOT projects have been common to introduce domestic and foreign investment as a means to construct operate and manage After the expiration of concession rights the power plants will return to government ownership

In order to alleviate the shortage of municipal waste disposal capacity NDRC will focus on the disposal of household waste for the 12th Five-Year Plan period State and local governments will provide RMB 6 billion and RMB 45 billion respectively as capital support They will also offer preferential policies to encourage private capital into the garbage incineration treatment field68



Energy



69 12th Five-Year Development Plan 70 BP Statistical Review of World Energy 201271 BP statistical review of World Energy 201272 IBISWorld Thermal Power Generation China 201273 International Energy Agency 2452012

httpwwwieaorgnewsroomandeventsnews2012mayname27216enhtml74 World Nuclear Association httpwwwworld-nuclearorginfoinf63html

With Chinarsquos continued economic growth more demands are being placed on energy production and transmission networks With a currently installed capacity of over 900 GW second only to the US and plans to reach over 1500 GW there seems to be little sign of a long-term slowdown in Chinarsquos energy demands

The majority of this growth and the majority of Chinarsquos energy production are expected to remain contingent on coal-based power generation but the 12th Five-Year Planrsquos objectives for sustainability have set ambitious targets for reductions in Chinarsquos dependency on coal and other fossil-fuel derived power The government has set out to increase non-fossil fuel usage in primary energy consumption to 114 percent by 2015 with a longer term target of 15 percent by 2020 This coupled with a reduction of 16 percent in overall energy consumption per unit of GDP and a 17 percent reduction in carbon dioxide highlight Chinarsquos commitment to reducing its reliance on fossil fuels69

Energy consumption structure 2011

Oil18

Coal72

Natural gas5

Others5

Source National Energy Administration

CoalCoal remains Chinarsquos primary source of power generation accounting for over 658 percent of the countryrsquos current energy production Already 495 percent of the worldrsquos coal burnt for electricity is done so in China and despite possessing more than 13 percent of the worldrsquos known coal reserves it is still a substantial net importer70

Due to the governmentrsquos continual desire for more efficient coal-fired plants in 2006 it introduced the lsquoProgram of Large Substituting Smallrsquo shutting down inefficient smaller coal

and other thermal plants In 2010 alone more than 16 GW of capacity was removed The replacement of these comes from medium and larger plants as well as through renewable and other non-thermal power generation techniques

Due to stricter emissions standards from the government falling profitability from the high price of coal and rising wages operating margins for coal-fired plants are just 35 percent causing many enterprises to shut down The governmentrsquos initiatives and margin-squeezing through higher coal prices and higher wages have seen the number of enterprises falling by 15 percent annually71 down to 1198 in 2012 which has further concentrated the industry However currently the largest player Datang International Power Generation holds just six percent of the market and the top four less than 16 percent of total revenue72

Although foreign companies face licensing restrictions and due diligence requirements they are actively encouraged to participate in related businesses such as coal bed methane or coal mine methane extraction projects where there is scope for new energy capital and emissions efficient technologies

In 2011 Chinarsquos emissions rose 93 percent driven substantially by higher coal usage and reaffirming its rank as the worldrsquos largest emitter of carbon dioxide By 2030 China is expected to account for 52 percent of the worldrsquos coal-fired power emissions73 74 Given the importance of coal-fired power in China sustained government initiatives to reduce Chinarsquos carbon emissions intensity appear a long-term threat to the coal-fired power industry However due to the scale of Chinarsquos energy needs the relatively low-cost nature of coal-fired power and Chinarsquos substantive coal reserves there appears little likelihood of coal power being replaced as Chinarsquos dominant energy provider

According to the coal industryrsquos 12th Five-Year development plan to 2015 Chinarsquos coal production capacity will reach 41 billion tons per year During the 12th Five-Year Plan period the national coal development plan is to control the eastern stabilize the central and develop the western region In addition through mergers and acquisitions the number of national coal mine enterprises should be limited to within 4000 with the average size increased to over 1 million tons per year

In order to ensure safety in production and achieve the integration of coal resources the Chinese government has carried out the 2010 plan of integrating the coal industry but the actual effect has not been wholly satisfactory Thousands of small coal mines have merged with state-owned or state-backed coal enterprises greatly reducing the private composition proportion This reduction of private coal mines has decreased production efficiency and to a certain extent has negatively affected the price of coal



75 BP Statistical Review of World Energy 201276 BP Statistical Review of World Energy 201277 BP Statistical Review of World Energy78 12th Five-Year Development Plan79 BP Statistical Review of World Energy 2012

80 12th Five-Year Plan81 Peoplecomcn 20 February 2012 lsquoPrivate enterprises have become an important power of Chinarsquos oil reserversquo httpfinancepeoplecomcnGB104517164409html

Oil and gasOver the last 10 years Chinarsquos crude oil production has seen little expansion in production volumes despite an ever growing demand for oil Production has grown at just over two percent per annum since 2002 meaning China is now heavily reliant on imported oil The 12th Five-Year Plan intends to see an acceleration and development of offshore and deep-water oil and gas fields in an apparent recognition of a mounting issue

Downstream refining capacity has seen strong growth since 2002 with capacity increasing from 59 million barrels per day to nearly 11 million per day in 201175 and demand for oil reaching 98 million barrels per day

Natural gas is an increasingly important natural resource to China due to its lower cost and carbon nature With the central government committed to reducing the intensity of Chinarsquos carbon dioxide emissions while providing a secure energy future tapping the 31 trillion cubic meters of natural gas reserves will become increasingly important76 With production in 2011 hitting 107 billion cubic meters an 8 percent increase on 2010 and consumption of nearly 1307 billion cubic meters a 205 percent increase77 investment in natural gas from explorations to pipeline is booming In the first half of 2012 there was an 89 percent year-on-year

growth in oil and gas extraction investments Under the current Five-Year Plan China will construct the second phase of its China-Kazakhstan oil pipeline its portion of the China-Myanmar pipeline as well as significant longitudinal gas pipeline investments The aim of which is to have around 150000 km of pipelines for oil and gas by 201578

China is the worldrsquos largest consumer of primary energy fuel consuming 26 billion tons of oil equivalents in 2011 to fire its power stations with a little over 900 GW of capacity available By contrast the United States uses a lean 23 billion tons of oil equivalent to generate over 1000 GW79 Much of this inefficiency is located within the power plants themselves and substantial scope for improvement remains However equally contributory is the outdated transmission networks within China To accelerate this the government plans to build over 200000 km of super-high voltage lines and build and develop smart grids to facilitate more efficient energy transmission80 Foreign players such as Siemens have already begun involvement with the building and operating of smart grids and foreign investment is permitted for innovations and efficiency technologies

Since 1992 there have been various channels of private capital flowing into the oil industry The entry points include oil refining warehousing logistics and product sales fields Presently China has more than 80000 private oil enterprises and total storage capacity of up to 200 million tons81

Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source BP Statistical Review of World Energy 2012



Nuclear powerWith a stable base-load power limited carbon emissions and a coastal location nuclear power has been perceived as an attractive method of powering Chinarsquos burgeoning eastern cities After a nationwide halt in nuclear power construction in the wake of the Fukushima nuclear incident for the purpose of conducting a safety review construction has now resumed in the sector By the end of 2011 China had seven nuclear power plants put into operation reaching 126 million kW and saw a 169 percent increase in nuclear power consumption in 201182 with a production target of 80 GW by 202083 Due to the post-Fukushima temporary halt on construction in 2012 this is not expected to be reached rather it is more likely to see 60 to 70 GW installed

Currently 13 nuclear power plants are being constructed or expanded with installed capacity of 340 million kW and a construction scale ranked first in the world By 2015 China is expected to have over 40 GW of nuclear capacity84 By 2020 Chinese installed nuclear power capacity is planned to reach 58 million kW with 30 million kW under construction With 100 new plants in the pipeline China will eventually be the worldrsquos largest nuclear producer

Due to the sensitivity and importance of nuclear power the government has set up strict qualifications and regulations for nuclear power enterprises Currently only three companies (China National Nuclear Corporation China Guangdong Nuclear Power Holding and China Power Investment Corporation) can undertake nuclear investment and development However domestic private capital has already begun to express an active interest in the nuclear power equipment manufacturing field

Renewable energyChina is currently the worldrsquos largest producer of renewable energy but it plays only a minor role in the national supply mix The 12th Five-Year Planrsquos major focus is on sustainability The development and expansion of both the new energy and energy conservation industries are central themes to the nationrsquos direction A target of 114 percent of all primary energy to be non-fossil fuels has been set by 2015 and 95 percent of the nationrsquos power to come from non-hydro renewables This is planned to reach 15 percent of all primary energy consumption by 202085

Hydroelectricity is the dominant clean energy source in China Currently over 180 GW of hydroelectric power is installed domestically making it the largest hydroelectricity producing country in the world Nonetheless in 2011 just six percent of Chinarsquos electricity came from hydroelectric sources86

The government has signalled its intentions to increase hydroelectric capacity to 290 GW by 2015 primarily by traditional hydropower with supplementation from pumped storage plants87

Wind power is another major source of renewable energy in China Centered mostly in the northeast and northwest provinces China has vast wind energy resources Estimates place Chinarsquos theoretical capacity at over 250 GW88 The governmentrsquos recently announced 12th Five-Year Development Plan for Renewable Energy seeks to harness this targeting 100 GW of wind power by 2015 and 200 GW by 2020 Much of Chinarsquos wind-power resources are held in Inner Mongolia which is expected to make up 271 percent of revenue in 2012 for the wind farm industry The region holds around 50 percent of the technically exploitable wind reserves in China89

Solar energy and biomass are also gaining prominence in the renewable energy market but remain small compared with hydro and wind Solar is expected to produce more than 50 GW of Chinarsquos power needs by 2020 and biomass an additional 30 GW

Private sector involvement Foreign investment in renewable and alternative energies is strongly encouraged by the Chinese government Foreign private capital owns 274 percent of wind power generation another 193 percent by domestic private enterprise and only 20 percent is state-owned90 Tax breaks and other initiatives are being used to incentivize both domestic and foreign private sector investors This has seen a substantial rise in private equity interests in the renewable sector especially on the technology side Hony Capital SAIF and Shenzhen Capital Partners all have significant interest in upstream renewable energy technologies There has also been a recent trend in IPOs in relation to renewable energy Renewables have represented a substantial share of the private equity backed IPOs since 2011

82 BP Statistical Review of World Energy 201283 World Nuclear Association httpwwwworld-nuclearorginfoinf63html84 World Nuclear Association httpwwwworld-nuclearorginfoinf63html85 National Energy Administration Accessed from Platts 882012

httpwwwplattscomRSSFeedDetailedNewsRSSFeedElectricPower7955459

86 BP Statistical Review of World Energy 201287 National Energy Agency12th Five-Year Plan Renewable Energy88 IBISWorld Alternative Energy in China May 201289 IBISWorld Alternative Energy in China90 IBISWorld Alternative Energy in China May 2012



Date Firm Market capitalisation (RMB billion)

Industry sector Exchange

6 May 2011 Jiangsu Jixin Wind Energy Technology Co

1014 Wind turbines and equipment

Shanghai Stock Exchange ndash AndashShare

21 May 2012 Jiangsu Sunrain Solar Energy CoLtd

860 Solar energy equipment


2 November 2011 Sungrow Power Supply Co Ltd

547 Solar energy photovoltaic systems and consulting within renewables sector

Shenzhen Stock Exchange ndash CHINEXT

11 May 2012 Zhejiang Jingsheng Mechanical and Electrical CoLtd

440 Photovoltaic materials and semi-conductors


15 August 2011 Jiangsu Akcome Solar Science amp Technology CoLtd

320 Solar aluminum frames and technology

Shenzhen Stock Exchange ndash AndashShare

Largest five private equity backed renewable energy listings in China since 2011

Source Asian Venture Capital Journal Statistical Database PEVC IPO Exits since 112011



Other favourable policies to encourage such investments include a lsquo3+3rsquo corporate income tax holiday and 50 percent reduction on VAT payable for wind farm projects In addition a subsidy of RMB 20 per watt of solar photovoltaic installed for plants over 50 kW representing about 50 percent of the total installation cost

The following table shows total private investment in different renewable resources at 30 June 2012

The following table shows total private investment in renewable resources related projects at 30 June 2012

Energy category Total investment (RMB billion)

Hydropower 250

Wind power 64

Solar photovoltaic power generation

23

Biomass energy 20

Wind power equipment solar power battery crystalline silicon manufacturing

230

Solar water heater 220

Private investment projects

CapacityOutput

As percentage of national total amount

New energy and renewable energy power generation projects installed

49 million kW 18

Total production of wind power equipment manufacturing

32 million kW 50

Production of solar power battery and components manufacturing

25 million kW 83

Solar crystal silicon manufacturing annual production

01 million tons

80




According to the National Energy Bureau plan they will support private investment to have full access to each domain and links to new energy and renewable energy They will also establish public transparency for a project exploitation rights approval mechanism ensure the equality of private enterprises which obtain the project exploration rights provide detailed support and measures in the field of equipment manufacturing industrial system construction distribute energy development and expand the international market

China has a total investment of USD 52 billion in the renewable energy investment field ranked first in the world (according to the United Nations environment program lsquoGlobal Trends in Renewable Energy Investment 2012rsquo) The renewable energy industry is a cornerstone of Chinarsquos efforts to be more sustainable in the long term and reduce its pollution challenges It should see steady expansion in the foreseeable future



About KPMG China In 1992 KPMG was the first international accounting network to be granted a joint venture license in mainland China and its Hong Kong operations have been established for over 60 years This early commitment to the China market together with an unwavering focus on quality has been the foundation for accumulated industry experience and is reflected in the firmrsquos appointment by some of Chinarsquos most prestigious companies

Today KPMG China has around 9000 professionals working in 13 offices Beijing Shanghai Shenyang Nanjing Hangzhou Fuzhou Xiamen Qingdao Guangzhou Shenzhen Chengdu Hong Kong SAR and Macau SAR

With a single management structure across all these offices KPMG China can deploy experienced professionals efficiently and rapidly wherever our client is located

AuditIntegrity quality and independence are the building blocks of KPMGrsquos approach Our audit process does more than just assess financial information It enables our professionals to consider the unique elements of the clientrsquos business ndash its culture the industry in which it operates competitive pressures and the inherent risks

KPMG member firms have developed a globally consistent audit process that is designed to concentrate on the key areas of risk based on a companyrsquos operational characteristics and performance profile Our partners and professionals are trained to look closely at all aspects of financial reporting so they are better able to isolate risk

TaxKPMGrsquos tax professionals analyze organizations and proactively identify tax-related opportunities and challenges With a thorough understanding of industries and regulations KPMG professionals deliver tax advisory and planning services that help organizations adopt efficient tax treatments enhance compliance and improve cash flow

Combining an intimate knowledge of the China and Hong Kong SAR tax laws and regulations with experience dealing with foreign investment enterprises KPMGrsquos Tax practice aims to deliver quality tax services Our advice regularly helps in reducing effective tax rates thereby bringing about real cash savings

AdvisoryKPMGrsquos Advisory professionals assist clients through a range of services relating to Transactions amp Restructuring Risk Consulting and Management Consulting Together these services can help address a clientrsquos strategic needs in terms of growth (creating value) governance (managing value) and performance (enhancing value)



About KPMGrsquos Global China Practice KPMGrsquos Global China Practice (GCP) was established in September 2010 to assist Chinese businesses that plan to go global and multinational companies that aim to enter or expand into the China market The GCP team in Beijing comprises senior management and staff members responsible for business development market services and research and insights on foreign investment issues

There are currently over 50 China Practices in key investment locations around the world These China Practices comprise locally based Chinese speakers and other professionals with strong cross-border China investment experience They are familiar with the Chinese local culture and business practices allowing them to effectively communicate between member firmsrsquo Chinese clients and local businesses as well as government agencies

The China Practices assist investors with China entry and expansion plans and on both inbound and outbound China investments They can provide assistance on matters across the investment life cycle including market entry strategy location studies investment holding structuring tax planning and compliance supply chain management MampA advisory and post-deal integration



When it comes to infrastructure KPMG firms know what it takes to drive value With extensive experience in most sectors and countries around the world our Global Infrastructure professionals can provide insight and actionable advisory tax audit accounting and compliance-related services to government organization infrastructure contractors operators and investors

We help our clients to ask the right questions that reflect the challenges they are facing at any stage of the life-cycle of infrastructure assets or programs ndash from planning strategy and construction through to operations and hand-back At each stage KPMGrsquos Global Infrastructure professionals focus on cutting through the complexity of program development to help member firm clients realize the maximum value from their projects or programs

Infrastructure will almost certainly be one of the most significant challenges facing the world over the coming decades That is why KPMGrsquos Global Infrastructure practice has built a practice of highly experienced professionals (many of whom have held senior infrastructure roles in government and the private sector) who work closely with member firm clients to share industry best practices and develop effective local strategies

By combining valuable global insight with hands-on local experience KPMGrsquos Global Infrastructure practice understands the unique challenges facing different clients in different regions And by bringing together numerous disciplines such as economics engineering project finance project management strategic consulting and tax and accounting KPMGrsquos Global Infrastructure professionals work to consistently provide integrated advice and effective results to help our member firmsrsquo clients succeed

For further information please visit us online at wwwkpmgcominfrastructure or email infrastructurekpmgcom


Integrated services Impartial advice Industry experience

kpmgcominfrastructure





Thought leadershipSince the publication of our first lsquoInfrastructure in Chinarsquo report in 2009 we have issued several separate sector-specific publications on China and the global infrastructure market For more information please visit our website wwwkpmgcomcn

The Changing Face of Healthcare in China

Infrastructure 100 World Cities Edition

Education in China

Cities Infrastructure

Water in China

INSIGHT Infrastructure Investment






Contact us

Peter FungGlobal Chair KPMG Global China PracticeT +86 (10) 8508 7017 E peterfungkpmgcom

Thomas StanleyChief Operating Officer KPMG Global China Practice T +86 (21) 2212 3884 E thomasstanleykpmgcom

David FreyPartnerHead of China InboundKPMG Global China Practice T +86 (10) 8508 7039E davidfreykpmgcom

Nelson LaiPartner in chargeInfrastructure Government amp HealthcareT +86 (21) 2212 2701E nelsonlaikpmgcom

Stephen IpPartnerHead of Government amp InfrastructureT +86 (21) 2212 3550E stephenipkpmgcom

Alison SimpsonPartnerInfrastructureT +852 2140 2248E alisonsimpsonkpmgcom

Simon BookerDirectorInfrastructureT +852 2140 2336E simonbookerkpmgcom

Michael JiangPartnerCorporate finance T +86 (10) 8508 7077E michaeljiangkpmgcom

John GuPartnerTaxT +86 (10) 8508 7095E johngukpmgcom

Danny LePartnerConsultingT +86 (10) 8508 7091E dannylekpmgcom

James PangPartnerConsulting T +852 2847 5059E jamespangkpmgcom

John IpPartnerConsulting T +852 2143 8762E johnipkpmgcom

Sean GilbertDirectorConsulting T +86 (10) 8508 5956E seangilbertkpmgcom

Jonathan YanDirectorConsulting T +86 (21) 2212 3566E jonathanyankpmgcom





The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity Although we endeavour to provide accurate and timely information there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation

copy 2013 KPMG International Cooperative (ldquoKPMG Internationalrdquo) a Swiss entity Member firms of the KPMG network of independent firms are affiliated with KPMG International KPMG International provides no client services No member firm has any authority to obligate or bind KPMG International or any other member firm vis-agrave-vis third parties nor does KPMG International have any such authority to obligate or bind any member firm All rights reserved Printed in Hong Kong

The KPMG name logo and ldquocutting through complexityrdquo are registered trademarks or trademarks of KPMG International

Publication number HK-PI12-0001

Publication date February 2013

kpmgcomcn

Chengdu18th Floor Tower 1 Plaza Central 8 Shuncheng AvenueChengdu 610016 ChinaTel +86 (28) 8673 3888Fax +86 (28) 8673 3838

Nanjing46th Floor Zhujiang No1 Plaza1 Zhujiang RoadNanjing 210008 ChinaTel +86 (25) 8691 2888Fax +86 (25) 8691 2828

Shanghai50th Floor Plaza 66 1266 Nanjing West RoadShanghai 200040 ChinaTel +86 (21) 2212 2888Fax +86 (21) 6288 1889

Guangzhou38th Floor Teem Tower 208 Tianhe RoadGuangzhou 510620 ChinaTel +86 (20) 3813 8000Fax +86 (20) 3813 7000

Fuzhou25th Floor Fujian BOC Building136 Wu Si RoadFuzhou 350003 ChinaTel +86 (591) 8833 1000Fax +86 (591) 8833 1188

Hangzhou8th Floor West Tower Julong Building9 Hangda RoadHangzhou 310007 ChinaTel +86 (571) 2803 8000Fax +86 (571) 2803 8111

Beijing8th Floor Tower E2 Oriental Plaza1 East Chang An AvenueBeijing 100738 China Tel +86 (10) 8508 5000Fax +86 (10) 8518 5111

Qingdao4th Floor Inter Royal Building 15 Donghai West RoadQingdao 266071 ChinaTel +86 (532) 8907 1688Fax +86 (532) 8907 1689

Shenyang27th Floor Tower E Fortune Plaza 59 Beizhan RoadShenyang 110013 ChinaTel +86 (24) 3128 3888Fax +86 (24) 3128 3899

Xiamen12th Floor International Plaza8 Lujiang RoadXiamen 361001 ChinaTel +86 (592) 2150 888Fax +86 (592) 2150 999

Shenzhen9th Floor China Resources Building 5001 Shennan East RoadShenzhen 518001 ChinaTel +86 (755) 2547 1000Fax +86 (755) 8266 8930

Hong Kong8th Floor Princersquos Building 10 Chater RoadCentral Hong Kong

23rd Floor Hysan Place500 Hennessy RoadCauseway Bay Hong Kong

Tel +852 2522 6022Fax +852 2845 2588Macau

24th Floor BampC Bank of China BuildingAvenida Doutor Mario Soares MacauTel +853 2878 1092Fax +853 2878 1096



12th Five-Year Plan

Roads

Railways


Ports

Airports

Water and waste

Energy


4

6

10

14

18

20

24

28

34

42



Introduction















12thFive-Year Plan





bull New energy


bull Biotechnology

bull New materials

bull New IT












Region






Total 25 9 21 55


















Roads











180

160

140

120

100

80

60

40

20

2002

Num

ber o

f new

veh

icle

regi

stra

tions

(in

hun

dred

thou

sand

s)

2003 2004 2005 2006 2007 2008 2009 20100














1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Tota

l len

gth

of e

xpre

ssw

ays

(in

ten

thou

sand

kilo

met

ers)







0

1

2

3

4

5

6

7

8

9






Railways












2006400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013



Source World Bank

Rai

lway

inve

stm

ent e

xpen

ditu

re

(in

RM

B b

illio

n)



Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou


Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu





350 kmh (220 mph)








Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau



12th Five-Year Plan

Roads

Railways


Ports

Airports

Water and waste

Energy


4

6

10

14

18

20

24

28

34

42



Introduction















12thFive-Year Plan





bull New energy


bull Biotechnology

bull New materials

bull New IT












Region






Total 25 9 21 55


















Roads











180

160

140

120

100

80

60

40

20

2002

Num

ber o

f new

veh

icle

regi

stra

tions

(in

hun

dred

thou

sand

s)

2003 2004 2005 2006 2007 2008 2009 20100














1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Tota

l len

gth

of e

xpre

ssw

ays

(in

ten

thou

sand

kilo

met

ers)







0

1

2

3

4

5

6

7

8

9






Railways












2006400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013



Source World Bank

Rai

lway

inve

stm

ent e

xpen

ditu

re

(in

RM

B b

illio

n)



Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou


Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu





350 kmh (220 mph)








Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau


Introduction















12thFive-Year Plan





bull New energy


bull Biotechnology

bull New materials

bull New IT












Region






Total 25 9 21 55


















Roads











180

160

140

120

100

80

60

40

20

2002

Num

ber o

f new

veh

icle

regi

stra

tions

(in

hun

dred

thou

sand

s)

2003 2004 2005 2006 2007 2008 2009 20100














1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Tota

l len

gth

of e

xpre

ssw

ays

(in

ten

thou

sand

kilo

met

ers)







0

1

2

3

4

5

6

7

8

9






Railways












2006400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013



Source World Bank

Rai

lway

inve

stm

ent e

xpen

ditu

re

(in

RM

B b

illio

n)



Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou


Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu





350 kmh (220 mph)








Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau




12thFive-Year Plan





bull New energy


bull Biotechnology

bull New materials

bull New IT












Region






Total 25 9 21 55


















Roads











180

160

140

120

100

80

60

40

20

2002

Num

ber o

f new

veh

icle

regi

stra

tions

(in

hun

dred

thou

sand

s)

2003 2004 2005 2006 2007 2008 2009 20100














1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Tota

l len

gth

of e

xpre

ssw

ays

(in

ten

thou

sand

kilo

met

ers)







0

1

2

3

4

5

6

7

8

9






Railways












2006400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013



Source World Bank

Rai

lway

inve

stm

ent e

xpen

ditu

re

(in

RM

B b

illio

n)



Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou


Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu





350 kmh (220 mph)








Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau


12thFive-Year Plan





bull New energy


bull Biotechnology

bull New materials

bull New IT












Region






Total 25 9 21 55


















Roads











180

160

140

120

100

80

60

40

20

2002

Num

ber o

f new

veh

icle

regi

stra

tions

(in

hun

dred

thou

sand

s)

2003 2004 2005 2006 2007 2008 2009 20100














1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Tota

l len

gth

of e

xpre

ssw

ays

(in

ten

thou

sand

kilo

met

ers)







0

1

2

3

4

5

6

7

8

9






Railways












2006400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013



Source World Bank

Rai

lway

inve

stm

ent e

xpen

ditu

re

(in

RM

B b

illio

n)



Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou


Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu





350 kmh (220 mph)








Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau




bull New energy


bull Biotechnology

bull New materials

bull New IT












Region






Total 25 9 21 55


















Roads











180

160

140

120

100

80

60

40

20

2002

Num

ber o

f new

veh

icle

regi

stra

tions

(in

hun

dred

thou

sand

s)

2003 2004 2005 2006 2007 2008 2009 20100














1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Tota

l len

gth

of e

xpre

ssw

ays

(in

ten

thou

sand

kilo

met

ers)







0

1

2

3

4

5

6

7

8

9






Railways












2006400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013



Source World Bank

Rai

lway

inve

stm

ent e

xpen

ditu

re

(in

RM

B b

illio

n)



Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou


Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu





350 kmh (220 mph)








Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau



Region






Total 25 9 21 55


















Roads











180

160

140

120

100

80

60

40

20

2002

Num

ber o

f new

veh

icle

regi

stra

tions

(in

hun

dred

thou

sand

s)

2003 2004 2005 2006 2007 2008 2009 20100














1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Tota

l len

gth

of e

xpre

ssw

ays

(in

ten

thou

sand

kilo

met

ers)







0

1

2

3

4

5

6

7

8

9






Railways












2006400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013



Source World Bank

Rai

lway

inve

stm

ent e

xpen

ditu

re

(in

RM

B b

illio

n)



Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou


Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu





350 kmh (220 mph)








Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau








Roads











180

160

140

120

100

80

60

40

20

2002

Num

ber o

f new

veh

icle

regi

stra

tions

(in

hun

dred

thou

sand

s)

2003 2004 2005 2006 2007 2008 2009 20100














1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Tota

l len

gth

of e

xpre

ssw

ays

(in

ten

thou

sand

kilo

met

ers)







0

1

2

3

4

5

6

7

8

9






Railways












2006400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013



Source World Bank

Rai

lway

inve

stm

ent e

xpen

ditu

re

(in

RM

B b

illio

n)



Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou


Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu





350 kmh (220 mph)








Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau


Roads











180

160

140

120

100

80

60

40

20

2002

Num

ber o

f new

veh

icle

regi

stra

tions

(in

hun

dred

thou

sand

s)

2003 2004 2005 2006 2007 2008 2009 20100














1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Tota

l len

gth

of e

xpre

ssw

ays

(in

ten

thou

sand

kilo

met

ers)







0

1

2

3

4

5

6

7

8

9






Railways












2006400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013



Source World Bank

Rai

lway

inve

stm

ent e

xpen

ditu

re

(in

RM

B b

illio

n)



Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou


Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu





350 kmh (220 mph)








Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau










180

160

140

120

100

80

60

40

20

2002

Num

ber o

f new

veh

icle

regi

stra

tions

(in

hun

dred

thou

sand

s)

2003 2004 2005 2006 2007 2008 2009 20100














1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Tota

l len

gth

of e

xpre

ssw

ays

(in

ten

thou

sand

kilo

met

ers)







0

1

2

3

4

5

6

7

8

9






Railways












2006400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013



Source World Bank

Rai

lway

inve

stm

ent e

xpen

ditu

re

(in

RM

B b

illio

n)



Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou


Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu





350 kmh (220 mph)








Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau







1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Tota

l len

gth

of e

xpre

ssw

ays

(in

ten

thou

sand

kilo

met

ers)







0

1

2

3

4

5

6

7

8

9






Railways












2006400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013



Source World Bank

Rai

lway

inve

stm

ent e

xpen

ditu

re

(in

RM

B b

illio

n)



Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou


Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu





350 kmh (220 mph)








Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau






Railways












2006400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013



Source World Bank

Rai

lway

inve

stm

ent e

xpen

ditu

re

(in

RM

B b

illio

n)



Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou


Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu





350 kmh (220 mph)








Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau


Railways












2006400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013



Source World Bank

Rai

lway

inve

stm

ent e

xpen

ditu

re

(in

RM

B b

illio

n)



Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou


Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu





350 kmh (220 mph)








Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau











2006400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013



Source World Bank

Rai

lway

inve

stm

ent e

xpen

ditu

re

(in

RM

B b

illio

n)



Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou


Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu





350 kmh (220 mph)








Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau


Harbin

Changchun

Shenyang

Qinhuangdao

DalianYantai

Qingdao

Tianjin

Beijing

Hohhot

ShijiazhuangTaiyuan

Baotou

Jinan

XuzhouZhengzhou

Lanzhou


Hefei

Wuhan

Wenzhou

Fuzhou

Xiamen

ShenzhenHong Kong

Zhanjiang

Haikou

Nanning

Kunming

Macau

Guangzhou

Liuzhou

Guizhou

Changsha

Fujian

Nanchang

AnqingJiujang

Chongqing

Chengdu

Nanjing

ShanghaiHangzhou

Ningbo

Bengbu





350 kmh (220 mph)








Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau





Others11

State budget 12

Domestic loans 42


Foreign investment

1


















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau















Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau












Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau


Ports








1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau







1 Shanghai 3174

2 Singapore 2994

3 Hong Kong 2438

4 Shenzhen 2257

5 Busan 1617







Others39

Coal22

Ores19

Buildingmaterials

19

Petrochemical 22




World ranking

Shanghai 3174 1

Shenzhen 2257 4


Guangzhou 1426 7

Qingdao 1302 8

Tianjin 1159 11

Xiamen 647 19

Dalian 640 20

Lianyungang 485 26

Suzhou 469 28





















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau















Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau




Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau


Airports













2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau












2006 2007 2008 2009 2010 2011

700

Tota

l num

ber o

f pas

seng

ers

usin

g

Chi

nese

airp

orts

(in

mill

ions

)



60593

579

569

5655

54

3323876

40584861

5643

6205

59

58

57

56

55

54

53

52

51

600

500

400

300

200

100

0





Urumqi

Harbin

Dalian

Shenyang

Qingdao

Zhengzhou

NanjingChongqing

Chengdu Wuhan

ChangshaGuiyang

Kunming


gt 25 million

15ndash25 million

5ndash15 million

lt 5 million

Guilin

Guangzhou

Shenzhen

HaikouSanya

Xiamen

Fuzhou

WenzhouNingbo


Jinan

Taiyuan

Xirsquoan

Tianjin

Beijing



















Water and waste








WWTP payment







Customer




RiverFlow of water

Flow of cash

Waste water Sludge


Discharge


Surface Ground

2000

3500

3000

2500

2000

15002001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Tota

l am

ount

of w

ater

reso

urce

s (i

n bi

llion

cub

ic m

eter

s)





































Energy








Oil18

Coal72

Natural gas5

Others5




















Domestic oil usage

Production Imports

Volu

me

of o

il us

age

(in

thou

sand

bar

rels

per

day

)

2001

12000

10000

8000

6000

4000

2000

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011











































Hydropower 250

Wind power 64


23

Biomass energy 20


230



CapacityOutput



49 million kW 18


32 million kW 50


25 million kW 83


01 million tons

80






































Education in China


Water in China







Contact us
























kpmgcomcn














Tel +852 2522 6022Fax +852 2845 2588Macau


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Infrastructure in China: Sustaining quality growth (PDF 3.3MB) - KPMG

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