San Francisco, CA (PRWEB) July 03, 2013
Existing rail freight capacity in China can no longer meet the country’s rapidly growing transportation demand. As a result, the Chinese government is making substantial investments into the expansion of the nationwide railway network. By 2020, total investment is expected reach $216.0 billion and the network 120,000 kilometers, says IBISWorld. Although a large proportion of this investment is dedicated to railways for passenger traffic, the Freight Rail Transport industry will benefit as existing railways are freed up for freight traffic.
The Freight Rail Transport industry is expected to generate $36.2 billion in 2013. Over the five years through 2013, industry revenue has been growing 7.5% per year, says IBISWorld. This industry is subject to a medium concentration level as the top four players account for about 40.0% of industry revenue. Rail transportation businesses in China are dominated by 18 railway administrations under the Ministry of Railway, including the Taiyuan, Xi'an and Wuhan Railway Administrations that were established in March 2005.
The government has announced it will dismantle the original Railway Ministry and set up the China Railway Corporation to run transportation nationwide. This new entity will have the ability to implement reforms to the current rail transport pricing mechanisms, which has the potential to significantly affect the industry as freight transport pricing is currently market-oriented.
Due to investment shortages on railways and the inadequate railway transportation capacity, private capital and foreign investments have been encouraged by the government in recent years. The combination of the Ministry of Railway's role as both government organization and industry player, along with the policy of uniform scheduling and pricing, makes investing in the railway industry risky and relatively unattractive for many private firms. However, as reforms are made in the industry (like the transition to a market-oriented pricing mechanism), non-state-owned players are expected to increase in the industry.
For more information, visit IBISWorld’s Freight Rail Transport in China industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld Industry Report Key Topics
The Freight Rail Transport industry in China operates railways for the transportation of freight across China. The industry comprises state-owned railways as well as local railways (invested and operated by local governments) for transferring freight or cargo. Management and operations of railway terminals and station facilities are not included in this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.