Analysis of economic impacts of the Hangzhou-Ningbo expressway

http :/www. zju. edu. cn/jzus; E-mail : jzus@ zju. edu. cnISSN 1009 - 3095 Journal of Zhejiang University SCIENCE V.4 ,No.4 ,P .454 - 462 July - Aug. , 2003Analysis of economic impacts of the Hangzhou-Ningbo expresswayLIUNar(刘南 )( College of Management , Zhejiang Universisy , Hangzhou 310027 , China )E-mail : nliu@ mail. hz. zj.cnReceived May 9 , 2002 ; revision aecepted June 15 , 2002Abstract : This paper presents an analysis of the effects of the Hangzhou- Ningbo Expressway( in ZhejiangProvince of the People' s Republic of China ) on the region' s economic development. An econometric modelshows the estimated contributions attributable to the expressway have increased year by year. And statisticaldata indicate that the Hangzhou-Ningbo Expressway has promoted to some extent the region' s economic devel-opment in various aspects.Key words : Expressway , Regional economie development , Econometric modelDocument code : ACLC number : U4-9 , F540.3INTRODUCTIONin early 1990s. There are also several nationalsymposiums focusing on expressway and socialTransportation has been a basic industry in economic development ( PCESED，1998 ; SP-China' s national economy. By the end of 2001，BEA , 2000 ). Methodologies for most of theseexpressways in China have reached to 19 000 ki- studies , however , have been qualitative and de-lometers，ranking second ( behind the United scriptive in nature.States ) in the world.Based on the existing literature , economicInternationally，there had been numerous effects of transportation projects can be definedstudies on the relationship between road invest- as temporary and permanent effects ，and directment and productivity ( Fernald( 1999 ) on the and indirect effects. Temporary economic effctsU.S. experience ; Khanam( 1996 ) on the Cana- occur during the construction stage , both directlydian experience ; T&E Report( 1996 )on the re- and through demand( backward expenditure ) ef-search development and European experience fects indirectly. Permanent direct effects includeconcerning roads and economy ). There are also transport cost and time benefits for people ana number of studies dealing with the economic freight. Besides direct effects , there are alsoimpacts of transportation projects ( McDonald et permanent indirect economicFirst ,al. ( 1995 ) on the effects of transportation im- these relate to the backward expenditure effectsprovement on residential values ; Corsi et al. of the exploitation and use of infrastructure. Sec-( 1999 ) on the impact of interstate highway com- ond，these involve the induced effcts , whichmercialization on economic activity at inter- are defined as the consequences of the reductionchanges ; Louis Berger and Associates( 1998 )on in transport cost for production and location deci-a framework for analyzing social and economic sions of people and firms , and subsequent effectseffects of transportation projects ; and PBQD on income and employment of population al( 1999 )on a methodology to identify and assess中国煤化工、land use impacts of transportation investments ).of expressways can beIn China , in response to rapid development brieTMYHC N M H Gity models in regionalof expressway construction ，there have been science( Batten et al. , 1986 ). The opening ofsome research studies on the economic impacts of an expressway linking two cities enhances spatialexpressways , including a series of research re-interaction between activities or land uses in theports compiled t。by the Ministry of Communica- surrounding region , which is measured by acces-tions( 1995798Iseveral expressway projects built sibility that represents the attractiveness of po-Analysis of economic impacts of the Hangzhou-Ningbo expressway455tential destinations and ease of reaching them. tal of Zhejiang Province and also a famous tour-The potential for interaction between any two ism city. Shaoxing City , located in the middleplaces increases as the cost of movement between part of HNE , is famous for its textile industries .them , either in terms of money or time , decreas- The eastern end of HNE is Ningbo City , the sec-es. The region with this location advantage will ond largest port ( behind Shanghai ) in Chinaattract those transport-dependent businesses and with a throughput capacity of 102 million tons inproduction factors ，leading to the geographic 2000.concentration and cluster of industrial distribu-The region of the three cities as a whole hadtion , and thus promoting the region' s economic a total population of nearly 16 million in 2000 ,development.making up over 35 percent of that of ZhejiangThis paper examines the permanent indirect Province. The economy for the three-city regioneconomic effects of the Hangzhou-Ningbo Expre- plays a significant part in Zhejiang Province. Inssway( HNE ) , the first expressway built in Zhe- 2000 ，total GDP for the three-city regionjiang Province and opened to traffic in December reached 333. 8 billion yuan , accounting for overof 1996. The opening of HNE has certainly gen- 55 percent of GDP for the entire Province. Be-erated significant impacts on the economic devel- tween 1996 and 2000 , the economy in terms ofopment along the line. However , many of these GDP for the three- city region rose rapidly with anpositive effects have not yet been analyzed and annual average growth rate of 12. 7 percent ，ex-assessed in a quantitative way. This paper at- ceeding 11 .4 percent for Zhejiang Province dur-tempts to quantify the economic effects of HNE ing the same period.and provide some policy implications for the2. HNE enhancing the Hangzhou- Ningbo corridor' sZhejiang provincial government' s transportationtransportation capabilitiesdecision making .HNE has a total length of 145 kilometersPROFILE OF THE REGION AND THE HNE FA-with two lanes in each direction. The opening ofCILITYHNE greatly shortens the distance and traveltime between the Hangzhou-Ningo Corridor. Be-1. Regional economic environmenttween Hangzhou and Ningbo Cities ，travel dis-Since adoption of economic reform and open- tance is shortened by 70 kilometers and traveldoor policies，Zhejiang Province has been one of time is reduced from six hours previously to twothe fastest growing provinces in China in terms of hours at present. For passenger travel ，HNEits economic activities. Between 1979 and 2000，provides more frequent and faster services thanZhejiang Province witnessed a double-digit annu- its competitor - railway. For example , duringal average growth rate of 13.2 percent with its peak periods of a day , the Expressway Bus Com-GDP reaching 603. 6 billion yuan in 2000. In pany offers non-stop services between Hangzhouparallel to its economic boom , transportation in- and Ningbo every ten minutes with a travel timevestment in Zhejiang Province also grew rapidly of one hour and 45 minutes，nearly half hour re-with an annual average growth rate of 20 percent duction in travel time compared to the passengerbetween 1995 and 2000 , reaching 16 billion railway line.yuan and ranking third in the nation in 2000. ByHNE has changed the modal shares and pro-the end of 2000 , highways in Zhejiang Province moted the highway transport development in thehad reached a total of 41 970 kilometers ，and region. As shown in Table 1，highway is theexpressways had reached to 627 kilometers , rep- dominant mode of serving both passenger andresenting increases of three percent and 60 per- freig中国煤化工iy region. In 2000 ;cent from 1999 , respectively .nearpassenger traffic andHNE connects the three important cities ofoverMHC N M H Gght raff were trans-Hangzhou , Shaoxing and Ningbo , which repre- ported by highway. For freight , waterway is ansent three respective prefectures ( the administra- other important mode because of the rich watertive unit that is below province and above county resources in the region , accounting for nearly 21in China lin Zhejiang Province( Fig.1 ). Hang- percent of total freight traffic .zhou City,tir Western end of HNE , is the capi-456LIU Nan●20H0HAN ARCIHLA0OESr muher●inplencn.BASOE NOYBNCLJesinueEast China SeaLFOEDFig.1 The Hangzhou-Ningbo expresswayTable 1Passenger ( 1000 persons ) and freight crease of over 17 percent from 1999( ADTV of( 1000 tons ) traffic by mode in the region :HNE in 1999 increased by 29. 5 percent from20001998 ). The rapid growth in traffic volume wasPassengerFreightprincipally attributable to the following :TrafficPercentThe economy in the three-city region main-'Three-City Total533978100% 287 650100%tained a steady growth momentum , with a dou-ble-digit GDP growth rate during the period ;Highway511100 95.7% 216 44075.2%A network effect was created when HNE be-Railway178843.3%12 0904.2%came fully operational ;W aterway31420.6% .59 120 20. 6%More people have chosen to use HNE toCivil Aviation18520.4%一travel for tourism and vacations ;Source : Zhejiang Statistical Yearbook.Road conditions and service qualities hadbeen improved.Currently , HNE is operated by the Zhejiang3. Traffic characteristics of HNEExp。IJsers of HNE pay aSince commencing operation in December中国煤化工ollxe( yuan per vehicle )1996 , the average daily traffie volume( ADTV )andTYHCN M H Ger vehicle-km ). Theof HNE has surged rapidly. In 2000 , the ADTVtoll rates vary with five different vehicle classesof HNE reached 17 006 vehicles( 26 176 pas-and are presented in Table 2.senger car equivalents )，representing an in-Analysis of economic impacts of the Hangzhou-Ningbo expressway457Table 2 Toll rates for the Hangzhou-Ningbo expresswayEntrance feeDistance feeVehicle classClassification standard( Yuan/Vehicle ) ( Yuan/Vehicle-km )Passenger vehicles with up to 20 seats ; Trucks with50.45tonnage of 2 tons or belowPassenger vehicles with seats above 20 and below 40( inclusive ); Trucks with tonnage of above 2 tons0.80and below 5 tons ( inclusive )Buses with more than 40 seats ( including sleeping3buses with more than 32 seats ); Trucks with ton-11.20nage above 5 tons and below 10 tons ( inclusive )Trucks with tonnage above 10 tons and below 20201.60tons ( inclusive )Trucks with tonnage above 20 tons and below 502:2.00Source : 2000 Annual Report of Zhejiang Expressway Co. , Ltd.With respect to the vehicle composition onbo is a constant , T is a time trend that theHNE , Class 1 vehicles ( cars and light trucks ) technology increases over time period ，and bmade up a larger share of nearly 66 percent inrepresents the rate of growth per year in technical2000 as compared to the previous year. In 2000progress. In this study ，T=l ;Classes 2 and 3 vehicles ( buses and mediumL is total number of employed personstrucks ) commanded an aggregate share of 32.8 ( 10 000 persons ) for the three-city region , andpercent ,which was less than that in the previous br represents the output elasticity of labor whichyear; while Classes 4 and 5 vehicles ( heavy measures the percentage change in GDP for atrucks ) had an aggregate share of approximatelygiven percentage change in labor ;1.2 percent , increasing annually on the whole .K is total investment in fixed assets ( inMODEL FOR ASSESSING HNE' S EFFECTS ON10 000 of 1978 yuan ) for the three- city region ,and bx represents the output elasticity of capitalREGIONAL ECONOMYwhich measures the percentage change in GDPfor a given percentage change in capital ;1. Model specificationD; is a dummy variable to reflect the exist-The primary economic impacts associated ence of HNE : D, = 1 for year 1996 to 2000 andwith the HNE are its contributions to the three- D, = 0 otherwise. Noting that the expected valuecity region' s economy. An econometric modelis E( lInGDP; )is equal to bo+ brT, + b,InL; +used to calculate the effects of HNE on the re-brlnK, for year before 1996 and is equal to( bogional economy as a whole. The model is :+ bp)+ brT;+ b,lnLr + bxlnK, for year inCobb-Douglas function in logarithmic-linear formand after 1996 , so bp represents the change in( Khanam , 1996 ): .氏lnGDP );lnGDPi= bo+ brT, + b,InL, +∈l is the error term.bxlnK, + bpD, + ε,(1)where2. Estimation Resultst represents time period ;中国煤化工tudy were from 1978GDP is total real GDP( in 100 millions of to 2;ked the beginning of1978 yuan ) for the three-city region ;Chir:MYHCNMHGThe estimation rebo + brT; represents the level of technology，sults for model( 1 )are as follows :lnGDP= - 1.0699 + 0.0726T + 0.162lnL + 0.36961nK + 0.1733D( -0.6291爻5.7834 ) ( 0.4617 ) ( 8.1851 ) ( 4.2901 )= 0.9993 F = 3066.108 DW= 1. 892(2)458LIU Nanwhere the values in parenthesis are t- values .the comprehensive transportation capabilities ofThe estimates of regression coefficients in the Hangzhou-Ningbo Corridor , and intensifiedequation( 2 ) can be explained as follows :the connection between the inland and coast ，The coefficient for T( 0. 0726 ) indicates that between city and countryside. By facilitating afor the annual growth in GDP for the three-city massive amount of passenger and goods move-region , technology advanced at a rate of 7.26 ment within the region , HNE plays a crucial rolepercent per year over the period 1978 to 2000. in the region' s economic development. The pro-The cofficient for lnL( 0. 162 ) is statistically moting effects are evident in( 1 ) improved in-insignificant , partially because the number of vestment environment ,( 2 ) accelerated circula-employed persons fluctuated due to the re- tion of commodities ,( 3 ) facilitated tourism ac-structuring of state-owned enterprises in recent tivities ,( 4 ) improved employment and industrialyears.structure , and ( 5 ) accelerated development inThe coefficient for lnK ( 0. 3696 ) indicates small towns and urbanization.one percent increase in investment in fixed as-While the promoting effects of HNE are ex-sets leads to 0.37 percent increase in the GDP emplified ，other factors , especially the institu-for the three-city region .tional policies that have guided China' s andThe cofficient for D ( 0.1733 ) shows the Zhejiang Province' s economic reforms and de-opening of HNE has significant positive effects velopment since 1978 , also play important roleson the economic activities in the three-city re- in promoting the economic development in thegion.three-city region( Zou , 2000 ). Due to the limi-The DW statistic( 1.892 ) indicates there is no tation of space of the paper , these institutionalserial correlation for model( 2 ).policies are not analyzed here.From Eq.( 2 ) one can estimate the GDP for .1. Improving Investment Environmentthe years 1996 - 2000 , with the effect of HNE( including 0. 1733D ) and without HNE ( ex-The opening of HNE led to more effectivecluding 0.1733D ). The difference between theand reasonable utilization of resources and madetwo GDPs , denoted by GDPHE , can be approx- the region more atactive to investors , especiallyimated as the contributions attributable to HNE.those from foreign enterprises , to engage in eco-Table 3 shows that the HNE' s contributions tonomic and trade activities in the region. F oreignthe regional economy have risen by year. Infunded enterprises ( including those from Hong2000 , the estimated HNE' s contributions wereKong , Macao and Taiwan ) are operating in three51.916 billion yuan , accounting for 15.55 per-forms : foreign venture , co-venture , and co-op-cent of the total CDP for the three-city region .eration. Table 4 shows between 1996 and 2000，Table 3 Estimated HNE' s contributions to the re-the number of signed contracts for utilization offoreign capital in the three-city region increasedgional economy ( billion yuan )nearly 56 percent，in contrast to the increase of1996199719981999 200040 percent for Zhejiang Province as a whole. InHNE s Contributions 36. 40239.594 43.500 48.022 51 .9162000 , the region' s total value of foreign capitalactually used amounted to 1. 18 billion US dol-As % of total GDP16.43 15.66 15.76 16.16 15.55lars , accounting for 47.6 percent of that for Zhe-for the RegionNote : the figures in this table are calculated at current prices.jiang Province .Source : Estimates by the author using the data from Zhejiang StatisticalHNE has also promoted foreign trade in theYearbook .region along the expressway. In 2001 ，amongtheit+ counties of ZhejiangHNE' S EFFECTS ON THE REGION' S INDUS-Prov中国煤化工located along HNE.\md:YHCNMH Gand Shaoxing ，theTRIAL DEVEL POMENTperformance of Ningbo is most impressive. Theexternal economy in Ningbo City has developedThis section further analyzes the effects of rapidly in recent years by businessmen who relyHNE on the three-city region' s industrial devel- on HNE to link the inland and Ningbo Port inopment. trpening of HNE greatly enhanced their trade activities. In 2001 ，Ningbo CityAnalysis of economic impacts of the Hangzhou-Ningbo expressway459ranked first in the Province in terms of total val-Table 5 Total retail sales ( 100 million yuan ) of con-ue of exports and utilization of foreign capital. Insumer goodsthis year , there were 829 foreign funded enter-19962000Changeprises newly registered in the City , with totalThree-City Total672101350.7%value of investment ( accumulation ) reachingHangzhou27340448.0%2.647 billion US dollars , representing 55 per-Ningbo25939050.6% .cent and 96 percent increases respectively fromShaoxing140219 56. 4%the previous year .Zhejiang Province1599229943.8%Three-City as % of ZP42.0% 44.1 %Table 4Signed contracts for utilization of foreign"ZP= Zhejiang ProvincecapitalSource : Zhejiang Statitical Y earbook .3. Providing convenient transportation for tourists655102155.9% .Like commodity circulation ，tourism is an-22131542.5% .other important economic sector greatly facilitat-32955067.2%ed by HNE. HNE provides convenient , safe and10515648.6%comfortable transportation for tourists visiting the1243174240.1%region , and promotes the development of tourism52.7% .58.6%resources along the expressway. The three cities"ZP = Zhejiang Provinceare abundant in tourism resources ; in particular ,Source : Zhejiang Statistical Yearbook.Hangzhou is a key tourism city in China and isfamous for its beautiful West Lake .2. Promoting commodity exchange and circulationTable 6 shows that from 1996 to 2000 , totalDevelopment of the commodity markets hasforeign exchange earnings from internationalbeen the key factor promoting the economy oftourism for the three-city region rose by 74. 4Zhejiang Province. Convenient transportation by percent ，much higher than the 40.5 percent forHNE shortens the distance and time of commodi- Zhejiang Province as a whole. During the samety circulation ，promotes the exchange of com-period，the total number of tourists also grewmodities and reasonably adjusts the distributionsignificantly for the three-city region by 45. 7of various markets. Statistical data shows thatpercent. Of the three cities , the growth was mostamong 20 key commodity markets designated bypronounced for Ningbo( 229 percent ) and Sha-the Zhejiang provincial government ，eight ofoxing ( 102 percent )，while the growth wasthem are located along HNE. Of the eight mar-steady for Hangzhou( nearly six percent ) largelykets , the Shaoxing Textile Town is one of the twobecause of its early developed tourism resourceslargest markets in the nation , with its annual ex-which resulted in a larger tourist base ; althoughchange value exceeding 15 billion yuan. In Sha-the three-city region as a whole had a loweroxing City , are 370 commodity markets , includ-growth rate in total number of tourists( 45. 7 per-ing 328 markets for consumer goods , and 42cent ) than the entire province( 55.8 percent )In addition to the above effects , tourism alsomarkets for production materials , with a total ex-provides significant economic and social benefitschange value reaching 54. 5 billion yuan into the region , which can be measured by the to1998.The effects of HNE on commodity circulationtal number of jobs , sales , and wages generatedcan be seen from the rapid growth in total retailby the tourist spending. Due to the lack of data，sales of consumer goods( Table 5 ). Since HNEthese benefits are not presented here .opened to traffic in 1996 ，total retail sales of 4中国煤化工industral structureconsumer goods within the three-city region roseYHC N M H Gsportation and lays aat an annual average rate of 10.8 percent ，ex- firm foundation for the exploitation of resourcesceeding the rate of 9. 5 percent for Zhejiang and the development of the economy. With theProvince on average .In 2000 , the total retail advantage of HNE , a large number of industrialsales within, the region reached 897 millions development zones and parks were set up alongyuan , makhg棉44.1 % of the entire province .the line. This has led to the increase of enterpris-460LIU Nanes along HNE and the development of new high- As a result , the region' s industrial structure hastechnology industries , speeded up the constant shifted over the years. The shifting process is ex-adjustment and optimization of the agricultural hibited in Tables 7 and 8 describing the change ofproduction structure , and changed the original industrial structure from 1996 to 2000 in the re-economic layout to mutual beneficial advantages. gional employment and GDP respectively .Table 6 Development of tourismTotal foreign exchange earnings from interTotal number of tourists( 1000 persons )ational tourism( US$ 1000 )19962000ChangeThree- City Total2987435 145.7%21177036940074. 4%Hangzhou224623765. 8%16739029244074.7%Ningbo3781242229%289805588092.8%Shaoxing363733102 %15402108036.9%Zhejiang Province3773587055. 8%29184041010040.5%Three-City as % of ZP79.1%74.1%72.6%90.1%Source : Zhejiang Stistical Yearbook .Table 7 Number of employed persons( 1000 ) by type of industry199719981999Three-City Total *1115911139104611040910375Primary Industry( % )33.232.732 .030.9Secondary Industry( % )41.240.739.539.840.0Tertiary Industry( % )25.626.127.828.229.12625126197261 25262522726143.042.542.441.037.433.833.629.931.8Teriary Industry( % )23.223.924.930.8￥Note the decline in the number of employed persons for the three-city region was largely due to the laying-off of workers as a result of the restructuring ofstate- owned enterprises in recent years.* * For the 1999 tertiary share of Zhejiang Province , the author believes the figure was significantly overestimated , but still reported here.Source : Zhejiang Statistical Yearbook .Table 8 Gross domestic product( 100 million yuan ) by type of industryThree-City Total2216.22528 .32759. 62972.13338.110.99.79.38.98.355.855.955.455.134.435.3.35.736.64146.14638 .24987.55364.96036.314.713.712.711.811.0Secondary Industry( %6 ) .53.154.154.352.732.233.034.136.3Note : the figures in this table are calculated at current prices.中国煤化工Source : Zhejiang Statistical Y earbook.JCHCNMHGIndustrial structure is classified into three( 1 ) Primary industry includes farming , for-categories : primary , secondary , and tertiary in- estry ，animal husbandry ，sideline productiondustries. The classification is universal though it and fishery ;varies to some extent from country to country .( 2 ) Secondary industry includes mining andIndustrieb液数据na are classified into :quarrying , manufacturing , and construction ;Analysis of economic impacts of the Hangzhou-Ningbo expressway461( 3. ) Tertiary industry includes transporta- viously disconnected roads，HNE acceleratedtion ，communications ，wholesale andretail highway construction along its corridor locationtrade，finance and insurance , services ，and in the region. As a result ，a large number ofgovernment .suburban satellite cities and small towns haveTable 7 shows secondary industry was the re- been built up along the way. As shown in Tablegion' s major employer , with a share of 40 percent 9 , from 1996 to 2000 , the total number of townsin 2000 , followed by 31 percent for primary and in the three-city region increased by 130 per-29 percent for tertiary industries. The region' s cent , in contrast to an increase of only 12.5 per-employment structure shifted over the years : a cent for Zhejiang Province as a whole.decrease in primary industry , slight decline inTable 9 Number of towns in the region and provincesecondary industry , and steady increase in tertia-19962000Changery industry. Compared to Zhejiang Province , the Thee-City Total158364130.4%regional shares were lower in primary industry ，Hangzhou9314050.5 %and higher in secondary and slightly lower in ter-Ningbo30122306.7%tiary industries( note in 1999 , the tertiary shareShaoxing3:102191.4%for Zhejiang Province increased significantly fromZhejiang Province86397112.5%1998 due to change in statistics ).'Three-City as % of ZP18.3% 37.5%The above trend is also evident from Table 8* P= Zhejiang Provincedescribing the change of industrial shares of GDPSource : Zhejiang Statitical Y earbook .for the three-city region and the Province. Theregion' s share of secondary industry remained .In parallelto the rapiddevelopment inthe highest( 55.1 percent ) , followed by tertiary towns ，the region' s population structure hasindustry( 36. 6 percent ) , and primary industry shifted towards a reasonable direction. As shown( 8.3 percent ). The lower GDP proportion for in Table 10 , from 1996 to 2000 , the share ofprimary industry may reflect the low productivity agricultural population decreased and the sharein primary sectors. Note that the region' s shares of non-agricultural population increased in theare lower in primary industry , and higher in both three city region. This trend also held for Zhe-secondary and tertiary industries than those for jiang Province as a whole , but at a slower rate .the Province as a whole .In 2000 , the region' s proportion of non- agricul-4. Promoting Development in Small Towns and Ur-ture population was 28. 2 percent , higher thanthe Province' proportion of 22. 1 percent. In ad-banizationUrbanization is an important indicator for adition , the three-city region had a higher popula-nation' s modermnization. And promoting the ur-tion density than Zhejiang Province on average.banization of the countryside is an important poli-reflecting the region' s better living and workingcy in China' s long- term strategy of stimulating theconditions that attract population and labor forcedomestic demand to promote the national econo-from other areas in the Province .my. The opening of HNE links the three cities ofCONCLUSIONSHangzhou , Shaoxing and Ningbo , facilitates themovement of people in the region ，and greatlypromotes the development and construction of theThis paper presents an analysis of the eco-originally large and medium sized cities. Travel- nomic impacts of the Hangzhou- Ningbo Express-ing by expressway is so convenient , so safe and way that connects three important cities , Hang-so comfortable that people spend less time and zhou, Ni:--bo in Zhejiang Prov-中国煤化工money on travel , which in turn promote the mo- inceocused on the perma-bility of regional population , improve the living nen:TYHCNM H Gcts of the Hangzhou-environment and quality of life of all residents .Ningbo Expressway. Since its opening in De-Besides the large and medium sized cities ，cember of 1996 , the Expressway has generatedHNE also has to some extent promoting effects on significant savings in terms of distance and travelthe development of small towns in the region. time to the users , and its daily traffic volume hasOwing td怕密0ng network effect of linking pre- grown rapidly .462LIU NanTable 10 Total population( 1000 persons ) and population density ( persons/sq. km ) _19961997199819992000Three-City Total1560115702157701586215952Agriculture( % )75.474.773.872.771.8Non-Agriculture( % )24.625.326.227.328.2Zhejiang Province440014422344469446754501281.180.479.678.877.918.919.620.421.222.1Population Density :460.7463.7465.7468.4471.1432.2434.4.436.8438.8442.2Note : Residents in China are divided into agriculture( for residents in countryside ) and non-agriculture( for residents in cities and towns ). An agriculturalresident can become non-agriculture with his/her education or job endeavor. The tems agriculture s. non- agriculture , which are used in the Statisti-cal Yearbook , are somewhat equivalent to rural ts. urban .Source : Zhejiang Statistical Yearbook .According to an econometric model , the es- Corsi ,T.M. ,Windle ,RJ and Knemeyer ,A.M. ,1999.timated contributions of the Hangzhou- NingboEvaluating the Potential Impact of Interstate HighwayRights-of- Way Commercialization on Economic ActivityExpressway account for over 15 percent of the to-at Interchanges . Transportation .Journal ,( Winter )16 -tal gross domestic product for the three-city re-gion，and the contributions have risen over the European Federation for Transport and Environment( T&E),years. And statistical data provided evidence1996. Roads and Economy : State-of-the Art Report ,that the Hangzhou-Ningbo Expressway promotedT&E Publication 96/1.the region' s industrial development , by improv-Fermald,J.G. , 1999 , Roads to Prosperity ? Assessing theLink between Public Capital and Productivity. Americaning investment environment ，promoting exchangeEconomic Review , 89( 3 ) 619 - 638and circulation of commodities， providing conve- Khanam , B. R. , 1996. Highway Infrastrueture Capital andnient transportation for tourists ，improving theProductivity Growth : Evidence from the Canadianregion' s employment and industrial structureGoods-Producing Sector. Logistic and Transportationand promoting development in small towns andReview，p.251 - 268.Louis Berger & Associates ，1998. Guidanceor Estimatingurbanization.the Indirect Efects of Proposed Transportation Projects ,The analysis results have important policyNational CooperativeHighway ResearchProjectimplications as the Zhejiang provincial govern-( NCHRP ) Report 403 , Transportation Research Board ,ment has recently proposed a long- term strategyNational Research Council , Washington , D.C.of building a big transportation system to promoteMeDonald ,J.F. and Osuji ,C.I.，1995. 'The Efect of An-ticipated Transportation Improvement on Residentialbig economic development .And expresswayLand Values. Regional Science and Urban Economics ,construction is the key strategy in the province' sTenth Five-Year Plan( 2001- 2005 ). Further Ministry of Communications , 1995. A Research on the Eco-research may extend the scope of the study to thenomnic Efects of Expressways .entire expressway and highway system in Zhe- Parsons Brinckerhoff Quade & Douglas , Inc.，1999 landUse Impacts of Transportation : A Guidebook , NCHRPjiang Province. Concerning the methodology ,Report 423A , Transportation Research Board , Nationalthere is a need to develop more systematic andResearch Council , Washington , D.C.advanced methodology ，e. g.，input-output Proceedings of the Commitee for Expressway and Social Eco-analysis , to quantify the economic effects of ex-nomic Development , 1998. 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