CONNECTED TRANSACTION

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong
Limited take no responsibility for the contents of this announcement, make no
representation as to its accuracy or completeness and expressly disclaim any
liability whatsoever for any loss howsoever arising from or in reliance upon
the whole or any part of the contents of this announcement.

                        ZHEJIANG EXPRESSWAY CO., LTD.

 (A joint stock limited company incorporated in the People's Republic of China 
                            with limited liability)                            

                               (Stock code: 0576)

                            CONNECTED TRANSACTION

                   ACQUISITION OF 4.775% EQUITY INTEREST IN         

                        ZHEJIANG EXPRESSWAY INVESTMENT                         

                             DEVELOPMENT CO., LTD.                             

ACQUISITION                                                                    
                                                                               
On 13 August 2010, the Company entered into the Acquisition Agreement with the 
Vendor whereby the Company has conditionally agreed to purchase from the Vendor
an aggregate 4.775% equity interest in Development Co held by the Vendor (of   
which 3.9% are held by the Connected Persons) subject to the conditions and in 
accordance with the terms of the Acquisition Agreement.                        
                                                                               
LISTING RULES IMPLICATIONS                                                     
                                                                               
The Connected Persons comprise, Mr. Jiang, Mr. Zhang and Mr. Fang, who are     
connected persons of the Company for the purposes of Chapter 14A of the Listing
Rules. Therefore the Acquisition constitutes a connected transaction of the    
Company. Since each of the applicable percentage ratios in respect of the 3.9% 
equity interest in Development Co held by the Connected Persons in relation to 
the Acquisition is less than 5%, the Acquisition is therefore subject to the   
reporting and announcement requirements but is exempt from the independent     
shareholders' approval requirement under the Listing Rules.                    
                                                                               
As the Acquisition is subject to the approval of the State Asset Management    
Bureau under Zhejiang Provincial Government, the Acquisition may or may not    
proceed. Shareholders of the Company and potential investors should therefore  
exercise caution when dealing in the shares of the Company.                    

On 13 August 2010, the Company entered into the Acquisition Agreement with the
Vendor whereby the Company has conditionally agreed to purchase from the Vendor
an aggregate 4.775% equity interest in Development Co held by the Vendor (of
which 3.9% are held by the Connected Persons) subject to the conditions and in
accordance with the terms of the Acquisition Agreement.

ACQUISITION AGREEMENT

Date

13 August 2010

Parties

The Vendor

Company

Assets to be acquired

4.775% equity interest in Development Co

Consideration

The aggregate consideration for the Acquisition is RMB8,996,100 (equivalent to
approximately HK$10,222,841) and the consideration will be satisfied by the
Company in cash.

The consideration for the Acquisition was determined after arm's length
negotiation between the parties based on normal commercial terms and with
reference to the audited net asset value of Development Co for the year ended
31 December 2009.

Conditions precedent

The Acquisition Agreement is conditional on obtaining the approval of the State
Asset Management Bureau under Zhejiang Provincial Government.

Completion

The Acquisition Agreement shall take effect on the date on which all relevant
approvals and consents have been obtained. Completion of the Acquisition
Agreement shall take place when the consideration for the Acquisition is
settled in full and the Vendor execute any transfer documents pertaining to the
Acquisition.

INFORMATION OF THE GROUP

The Company is a joint stock company established under the laws of the PRC with
limited liability on 1 March 1997, the H Shares of which are listed on the Main
Board of the Stock Exchange. The main business of the Group is the investment
in, operation and management of, and collection of tolls on the Expressways.
The Group also carry out certain ancillary businesses such as automobile
servicing, operation of gas stations and billboard advertising along the
Expressways, as well as securities business.

INFORMATION OF DEVELOPMENT CO

Development Co is a limited liability company incorporated in the PRC on 28 May
2003. The registered capital of Development Co is RMB120,000,000 (equivalent to
approximately HK$136,363,636).

Development Co is principally engaged in the operation of the Services Area
along the 247.6km Shanghai-Hangzhou-Ningbo Expressway and the 142km Shangsan
Expressway in the Zhejiang Province owned by the Company and Shangsan Co
respectively, and through its subsidiaries, billboard advertising as well as
vehicle servicing operations along the two expressways.

The net asset attributable to owners of Development Co based on its audited
financial statements for the financial year ended 31 December 2009 is
RMB198,624,877.15 (equivalent to approximately HK$225,710,088).

The net profit/(loss) before and after tax and extraordinary items of
Development Co based on its audited financial statements for the financial
years ended 31 December 2008 and 2009 are as follows:

                                                          For the      For the
                                                     period ended period ended
                                                      31 December  31 December
                                                             2008         2009
                                                                              
                                                          RMB'000      RMB'000
                                                                              
net profit/(loss) before tax and extraordinary items      100,718       68,032
                                                                              
net profit/(loss) after tax and extraordinary items        84,405       46,709

REASONS FOR AND BENEFITS OF THE ACQUISITION

Pursuant to the Opinion, save in circumstances set out in the Opinion,
employees of state-owned enterprise may not directly or indirectly hold shares
in the affiliates and subsidiaries of state-owned enterprise. Senior and middle
management staff of the state-owned enterprise holding such shares are required
to transfer such shares or to resign from their office. The Vendor has agreed
to sell her 4.775% equity interest in Development Co to the Company in
accordance with the Opinion.

The Directors (including all of the independent non-executive Directors)
believe that the terms of the transaction are fair and reasonable and in the
interests of the shareholders as a whole.

CONNECTED TRANSACTION

Amongst the Connected Persons, Mr. Jiang and Mr. Zhang are the directors of the
Company and Mr. Fang is a supervisor of the Company. Under the Listing Rules,
Mr. Jiang, Mr. Zhang and Mr. Fang are connected persons of the Company and
accordingly the entry into of the Acquisition Agreement is a connected
transaction for the Company within the meaning of the Listing Rules.

Each of the applicable percentage ratios in respect of the 3.9% equity interest
in Development Co held by the Connected Persons in relation to the Acquisition
is less than 5%, the Acquisition is therefore subject to the reporting and
announcement requirements but is exempt from the independent shareholders'
approval requirement under the Listing Rules.

Save for Mr. Jiang and Mr. Zhang, none of the Directors has any material
interest in the transactions contemplated under the Acquisition Agreement. Mr.
Jiang and Mr. Zhang have abstained from voting on the board resolution
approving the Acquisition Agreement and the transactions contemplated
thereunder.

The original capital contribution in Development Co by the Connected Persons
was RMB4,680,000 (equivalent to approximately HK$5,318,182).

GENERAL

The Company is expected to enter into agreements with the remaining
shareholders of Development Co to acquire the remaining 44.225% equity interest
in Development Co. Further announcement will be made once the Company enters
into the definitive agreements to acquire the remaining 44.225% equity interest
in Development Co and the Company will comply with the applicable reporting,
announcement and independent shareholders' approval requirements under the
Listing Rules when entering into such definitive agreements.

Upon completion of the Acquisition and the acquisition of the remaining 44.225%
equity interest in Development Co, Development Co will become a wholly-owned
subsidiary of the Company. The Company may consider disposing its entire 100%
equity interest in Development Co to Communications Investment Group in the
future, and such disposal would depend on various factors, such as the
valuation of the net asset value of Development Co and the negotiations of the
terms of the sale between the parties. At present, there are no concrete plans
to make such disposal. Further announcement will be made if the Company enters
into any definitive agreement to dispose of its 100% equity interest in
Development Co and the Company will comply with the applicable reporting,
announcement and independent shareholders' approval requirements under the
Listing Rules when entering into such definitive agreement.

Definitions

"Acquisition"             the acquisition by the Company from the Vendor of    
                          4.775% equity interest in Development Co pursuant to 
                          the terms and conditions of the Acquisition Agreement
                                                                               
"Acquisition Agreement"   the conditional sale and purchase agreement dated 13 
                          August 2010 between the Vendor and the Company       
                          relating to the Acquisition                          
                                                                               
"Ancillary Businesses"    Ancillary businesses of the Group involving billboard
                          advertising, operation of the Service Areas and the  
                          business of provision of towing and repair of        
                          vehicles and emergency services to users on the      
                          Expressways                                          
                                                                               
"Communications           Zhejiang Communications Investment Group Co., Ltd., a
Investment Group"         wholly State-owned enterprise established on December
                          29, 2001 in PRC and a controlling shareholder of the 
                          Company                                              
                                                                               
"Company"                 Zhejiang Expressway Co., Ltd.                        
                                                                               
"Connected Persons"       Mr. Jiang, Mr. Zhang and Mr. Fang, who collectively  
                          hold 3.9% of the equity interest in Development Co   
                                                                               
"connected persons"       shall have the same meaning as ascribed thereto in   
                          the Listing Rules                                    
                                                                               
"Development Co"          Zhejiang Expressway Investment Development Co., Ltd, 
                          a 51% owned subsidiary of the Company                
                                                                               
"Directors"               the directors of the Company                         
                                                                               
"Expressways"             the Shanghai-Hangzhou-Ningbo Expressway and the      
                          Shangsan Expressway                                  
                                                                               
"Group"                   the Company and its subsidiaries                     
                                                                               
"HK$"                     Hong Kong dollars, the lawful currency of Hong Kong  
                                                                               
"Hong Kong"               the Hong Kong Special Administrative Region of the   
                          PRC                                                  
                                                                               
"Listing Rules"           The Rules Governing the Listing of Securities on the 
                          Stock Exchange                                       
                                                                               
"Mr. Fang"                Mr. Fang Zhexing, a supervisor of the Company        
                                                                               
"Mr. Jiang"               Mr. Jiang Wenyao, an executive director of the       
                          Company                                              
                                                                               
"Mr. Zhang"               Mr. Zhang Jingzhong, an executive director of the    
                          Company                                              
                                                                               
"Opinion"                 Opinion of SASAC on regulating shareholdings and     
                          investment of employees of state-owned enterprises   
                          (Guo Zi Fa Gai Ge [2008] No. 139) published on 8     
                          October 2008                                         
                                                                               
"PRC"                     The People's Republic of China                       
                                                                               
"RMB"                     Renminbi, the lawful currency of the PRC             
                                                                               
"SASAC"                   State-owned Assets Supervision and Administration    
                          Commission of the State Council                      
                                                                               
"Service Areas"           Service areas along the Expressways which provide    
                          food catering, petrol filing, parking and vehicle    
                          repair services for users of the Expressways         
                                                                               
"Shanghai-Hangzhou-Ningbo the 247.5km Shanghai-Hangzhou-Ningbo Expressway in   
Expressway"               the Zhejiang Province owned by the Group             
                                                                               
"Shangsan Co"             Zhejiang Shangsan Expressway Co., Ltd, a 73.625%     
                          owned subsidiary of the Company in the PRC           
                                                                               
"Shangsan Expressway"     The 142km Shangsan Expressway in Zhejiang Province   
                          owned by Shangsan Co                                 
                                                                               
"Stock Exchange"          The Stock Exchange of Hong Kong Limited              
                                                                               
"Vendor"                  Ms Huang Qiuxia acting as nominee on behalf of the   
                          following parties who own in aggregate 4.775% of the 
                          equity interest in the registered share capital of   
                          Development Co: (i) Connected Persons; and (ii) One  
                          independent third party, who is not connected with   
                          the directors, promoters, supervisors, chief         
                          executive or substantial shareholders of the Company 
                          or its subsidiaries or any of their respective       
                          associates                                           

In this announcement, the translation of RMB into HK$ is based on the exchange
of rate of HK$1 to RMB0.88. Such conversion shall not be construed as a
representation that amounts in RMB were or may have been converted into HK$
using such exchange rate or any other exchange rate or at all.

                                                          By Order of the Board
                                                             Zhang Jingzhong   
                                                            Company Secretary  

Hangzhou, PRC, 23 August 2010

As at the date of this announcement, the executive directors of the Company
are: Messrs. Chen Jisong, Zhan Xiaozhang, Jiang Wenyao and Zhang Jingzhong; the
non-executive directors are: Messrs. Zhang Luyun and Zhang Yang; and the
independent non-executive directors are: Messrs. Tung Chee Chen, Zhang Junsheng
and Zhang Liping.