China to Straighten Transport Bottlenecks by 2020

China aims to ease transport bottlenecks which are affecting economic development by 2020 with a plan announced on Saturday to tackle issues such as excessive road tolls and poor connectivity and to ensure the smoother flow of goods.

Despite billions of dollars being invested in recent years on roads, railways and ports, China's rapid economic growth has meant that transport facilities still easily clog up, raising the cost of doing business.

Last year, logistics costs made up 18 percent of gross domestic product (GDP), roughly double that of the developed world and higher even than Brazil or India, with a fractured industry made up of too many small players and lack of modern warehousing, the central government said in a statement on its website.

"Infrastructure is comparatively backward and cannot satisfy the demands of the development of modern logistics," it said, outlining a plan running to 2020 to deal with the problem.

Previously announced steps such as trying to rein in excessive tolls and penalties have failed to be fully effective, affecting the movement of goods within the country, the government added.

Logistics companies will be encouraged to merge to form larger entities, there will be better integration between railways and ports and more facilities will be built to improve the transport of coal and grains and resolve "chokeholds", the statement said.

The government will also encourage the building of oil and LNG tankers and ports which can handle imports of iron ore and other minerals, it added.

The plan, which did not mention any investment figures, comes as the government is pushing through a new round of reforms aimed at bolstering a slowing economy, including trying to cut red tape, but avoiding massive spending rises.

(Reporting by Ben Blanchard and Fang Yan; Editing by Kim Coghill)