China is laying plans for a huge expansion of the country’s beleaguered railroad system, and some analysts expect significant upside for railway stocks.
Analysts say Shanghai-listed companies such as Daqin Railway and China Railway Tielong Container Logistics should benefit from a five-year industry blueprint unveiled in October by the Ministry of Railway. The government intends to spend 1.25 trillion yuan, or about $160 billion, between now and 2010.
The plan calls for construction of 17,000 kilometers, or about 10,540 miles, of track so service can be brought to areas that don’t have it. At the end of 2005, China had 46,600 miles of rail in operation. [Full Text, subscribers only]