China will build or renovate 300,000 km of rural roads this year to aid development in the countryside, Minister of Transport Li Shenglin said on Thursday.

Last year, 188.7 billion yuan (US$27.6 billion) was spent on building and renovating 391,000 km of rural roads, and the network now serves almost 89 percent of all towns, he said.

China had 3.68 million km of roads by the end of last year, more than triple what it had in 1978, he said.

The national expressway network stretches 60,300 km, of which 6,433 km were built last year, he said.

China has the world's second longest highway network, after the United States, the Xinhua News Agency reported.

The transport ministry is currently looking at new ways to fund the construction of roads, Li said.

Since the fuel tax reform took effect on January 1, road projects lost their usual financing platform, he said.

Under the reform plan, six fees collected by the ministry, including road maintenance, waterway maintenance and road transport surcharges, have been canceled.

The collection of tolls on secondary roads will also be phased out, Li said.

"The fees and tolls used to be a guarantee against bank loans and support for road construction projects," an insider said on the condition of anonymity.

When the collection of tolls on secondary roads is canceled, banks will have no guarantee of a return, and will therefore be reluctant to issue loans, he said.

(China Daily January 16, 2009)