China is set to spend on airport development in the next five years more than it did in the last 15 opening up huge investment opportunities for overseas and domestic investors.

According to the Civil Aviation Administration of China (CAAC), the industry regulator, 140 billion yuan (US$17.4 billion) has been earmarked from this year to 2010, compared to the 120 billion yuan (US$14.8 billion) from 1990 to last year.

The spending will be focused on 42 new airports and upgrading existing infrastructure.

Zhao Hongyuan, a senior CAAC official, told China Daily that the number of airports would rise to about 190 from the current 142, with the figure reaching 220 by 2020.

The fleet strength of commercial aircraft will grow to 1,580 by 2010, up from the current 863, before reaching about 4,000 in 2020.

The first step is to strengthen Beijing, Shanghai and Guangzhou airports as key international hubs. The CAAC also wants Chengdu, Kunming, Xi'an, Wuhan and Shenyang to become regional hubs.

It is not just the developed coastal and eastern areas which will hog the funds other regions, too, get a big chunk of the spending pie.

For example, Southwest China's Yunnan Province plans to invest more than 20 billion yuan (US$2.5 billion) in airport projects in the next five years, accounting for nearly one-seventh of the country's total, Xinhua News Agency reported.

By 2010, the province will have 15 airports, up from 10 now, forming a comprehensive network linking all parts of Yunnan with the outside world, specially southeastern and southern Asia.

"All the projects, national or local, will offer investment opportunities for investors at home and abroad," said Zhao.

China opened the aviation infrastructure sector to foreign and domestic investment in 2002; and there have been many takers.

For instance, German airport operator Fraport recently bought a 25 per cent stake in East China's Ningbo airport and is in talks for an even bigger stake in Xi'an's Xianyang airport in Northwest China.

Experts said that airport development is vital to keep pace with soaring air traffic. Last year, domestic airlines carried 138 million passengers, up 15.5 per cent from the previous year, and 3.4 million tons of cargo, up 13.8 per cent.

The CAAC said it expects passenger and cargo traffic to grow at an average of 14 per cent annually until 2010, with growth slowing to 11 per cent annually from 2011 to 2020.

"The current number of airports does not match the present and long-term needs of China," said Gao Jinhua, professor at Tianjin School of Civil Aviation Management.

According to CAAC figures, there are only 142 certified airports to serve a population of just over 1.3 billion. In comparison, the United States, with 270 million people, has 14,807 airports; and Australia, with just over 20 million, has 444.

"The challenge is not only to increase the number of airports but to improve existing infrastructure as well," said Gao.

The World Tourism Organization estimated recently that China would be the fourth-largest international source of leisure travellers by 2020, predicting about 100 million international Chinese tourists that year; and the country to become the world's top inbound tourist destination the same year.

But of the current 142 airports, only 25 are equipped to handle large aircraft such as the Boeing 747.

(China Daily 05/09/2006 page1)

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