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China’s Huge Highway Liabilities Relate to Years of ‘Great Leap Forward’ Development

On September 25, 2012, People’s Daily published an article related to the nation’s highways asking, “How can highways survive with over one hundred billion yuan in highway liabilities?”  The liabilities of the 19 listed highway companies amounted to 124.79 billion yuan (US$19.8 billion) for the first half-year of 2012, compared to 105.33 billion yuan (US$16.72 billion) for the same period last year.

On August 2, 2012, China’s State Council announced a plan to lift road tolls for passenger cars taking the highways during major Chinese holidays in order to promote tourism and related industries. At present, the listed highway companies are affected because they have little other income except toll revenue. They have entered into a cycle of “over charge tolls, build more highways, borrow more money, and build more highways.”

Source: People’s Daily, September 25, 2012