THE BUSINESS OF TRANSPORTATION IN CHINA

The Business of Transportation in China

From airports, road networks and ports to freight and logistics services, China’s transportation sector is growing rapidly. Just a few of the transportation-sector targets outlined in the 13th Five-Year Plan include:

• 30,000 km of high-speed railways, connecting more than 80% of all large cities
• construction of at least 50 civil airports
• 3,000 km of new urban rail transit lines
• construction of multimodal passenger and freight hubs
• 5,000,000 new energy vehicles
• Internet-based operation of transportation infrastructure^[1]

Areas of Growth

German consultancy GIZ outlines the main growth areas in the transportation sector as:

• green and low carbon transportation
• interconnected and multimodal transportation
• smart transportation
• international transportation networks
• safe transportation

Opportunities for Canadian Organizations

KPMG’s report on opportunities for Chinese and foreign businesses emerging from the 13th Five-Year Plan states that the focus on a co-ordinated regional system “will help create foreign investment opportunities in the development of trans-regional and city cluster infrastructure.” It goes on to say that “Chinese and foreign investors, financing providers, construction firms and project operators can use their competitive advantages in capital, technology and construction to play active roles in the construction of major Beijing-Tianjin-Hebei trans-regional infrastructure projects, and at the same time seek desirable investment opportunities.”

The need for new airports, high-density rail networks, co-ordinated port clusters, integrated transport systems, improvements to aviation hubs and other initiatives offer opportunities for companies with expertise in “infrastructure construction and operations, transportation management and design, construction, and the operation of intelligent transportation facilities […] to find investment opportunities.”^[2]

Electric vehicles and autonomous driving are other potential growth areas, with Export Development Canada noting that there “there is heavy R&D spending on development of smart vehicles, connectivity, and autonomous driving—all areas where Canada possesses strengths.” Another opportunity for Canadian companies comes from entering into partnerships with Chinese OEMs entering the North American market.

The Made in China 2025 initiative need not limit opportunities for Canadian organizations. Canada West Foundation provides the example of Ballard to underline the potential to collaborate with Chinese companies to promote innovative technologies. Through its partnerships with Chinese companies like Guangdong Nation-Synergy Hydrogen Power Technology, Ballard is delivering deliver zero-emission fuel cell transportation solutions in China, making the company “part of China’s energy-efficient vehicle ecosystem with room to develop in the domestic market and bring back new R&D and market learning through co-operation.”^[3]

There are also opportunities to encourage Chinese investment in Canada. In the fall of 2018, for example EHL International Logistics, a Chinese logistics firm, signed an agreement to make Edmonton International Airport its logistics consolidation centre for goods moving between China and North America.^[4]

Increased trade between Canada and China will benefit Canadian companies that operate or provide services to railways, ports, logistics networks and other related areas. Canada has a location advantage, with BC ports offering the shortest transportation routes from Asia to North America.

March, 2019

^[1] GIZ CHINA, Overview of China’s Five-Year Plans in the Transport Sector.

^[2] KPMG, The 13th Five-Year Plan – China’s Transformation and Integration with the World Economy, October 2016.

^[3] Canada West Foundation, Strong Signals: China’s Changing Trade Direction and What it Means for Canada, January 25, 2019.

^[4] Canada West Foundation, Chinese Logistics Firm to Build Hub at EIA, Boosting North America-China Trade.