Issue of Equity/Acquisition

Zhejiang Expressway Co
11 January 2001


ZHEJIANG EXPRESSWAY CO., LTD.
(a joint stock limited company incorporated in the People's
Republic of China with limited liability)

PROPOSED APPLICATION TO ISSUE A SHARES IN THE PRC,
PROPOSED ACQUISITION OF INTERESTS IN SHANGSAN CO
AND PROPOSED AMENDMENT TO THE ARTICLES OF ASSOCIATION

SUMMARY
The Company intends to apply to the CSRC and the Shanghai
Stock Exchange of the PRC for the issue and placement of A
Shares (the 'A Share Issue') to institutional and general
public investors in the PRC and for listing of the A Shares on
the Shanghai Stock Exchange. The Company intends to use part
of the proceeds of the A Share Issue to acquire 18.4%
shareholding interest in Shangsan Co held by Huajian (the
'Acquisition').

Saved as disclosed herein, the Directors hereby confirm that
they are not aware of any matter discloseable under the
general obligation imposed by paragraph 2 of the Listing
Agreement, which is or may be of a price-sensitive nature.

The Company intends to apply to the CSRC and the Shanghai
Stock Exchange for the A Share Issue to institutional and
general public investors in the PRC and for the listing of the
A Shares on the Shanghai Stock Exchange. The Company intends
to use part of the proceeds to acquire interest in Shangsan Co
held by Huajian.

ARRANGEMENTS FOR THE A SHARE ISSUE
The proposed arrangements for the A Share Issue are as
follows:
(i)  Number of A Shares to be issued:
     Not more than 300,000,000 A Shares.
(ii) Target placees:
     All natural persons and institutional investors with A
     Shares stock trading accounts at the Shanghai Stock
     Exchange (other than those prohibited by the laws and
     regulations of the PRC).
(iii)Issue price and its determination
     The issue price range will be determined on the basis of
     market demand for the A Shares and the book building
     method will be adopted. The issue price of A Shares will
     be negotiated between the underwriters responsible for
     the A Share Issue and the Company with reference to the
     market demand of A Shares.
(iv) Use of Proceeds
     The Company intends to use the net proceeds of the A
     Share Issue, which will amount to approximately RMB 1
     billion as follows:
     - approximately RMB425,000,000 for the first stage of
      widening of a section of the Hangzhou-Ningbo Expressway
     - the balance for funding the Acquisition
If the balance exceeds the consideration of the Acquisition,
the surplus will be used as working capital of the Company. If
the balance is not sufficient to fund the Acquisition, the
deficiency will be supplemented by internal resources of the
Company.

IMPACT OF THE A SHARE ISSUE ON THE SHAREHOLDING STRUCTURE OF
THE COMPANY
On the basis of the maximum number of A Shares to be issued
under the A Share Issue, the respective percentage of the
Company's shareholding before and after the completion of the
A Share Issue is as follows:

                      Before the A              Percentage of 
Class of Shares       Share Issue               Shareholding (%)

State-owned Shares    2,909,260,000 shares      66.99
A Shares                                 -          -
H Shares              1,433,854,500 shares      33.01
Total                 4,343,114,500 shares     100.00

                      After the A               Percentage of 
Class of Shares       Share Issue               Shareholding (%)

State-owned Shares    2,909,260,000 shares      62.66
A Shares                300,000,000 shares       6.46
H Shares              1,433,854,500 shares      30.88
Total                 4,643,114,500 shares     100.00

ACQUISITION OF INTEREST IN SHANGSAN CO HELD BY HUAJIAN
Shangsan Co. is 61% and 18.4% held by the Company and Huajian.
The remaining interests of Shangsan Co. are 7%, 6.6%, 3%, 2%
and 2% held by Tiantai County Transport Development Company,
Zhejiang Provincial High Class Highway Investment Company
Limited, Shangyu Municipal Transport Investment Company,
Shengzhou Shangsan Development Company and Xinchang Transport
Development Company respectively.

The Company intends to acquire the 18.4% shareholding interest
in Shangsan Co held by Huajian on normal commercial terms and
conditions. Huajian holds approximately 11% of the issued
share capital of the Company. Huajian is also one of the
promoters and a substantial shareholder of Shangsan Co..
Therefore, the Acquisition will constitute a connected
transaction of the Company under the Listing Rules of the
Stock Exchange. The terms and conditions of the Acquisition
are still being negotiated, and will require the approval of
the independent non-executive directors of the Company and the
independent shareholders of the Company at the EGM of the
Company, and subject to the consents to be granted by the
relevant government authorities such as the Ministry of
Communications and the Ministry of Finance.

Further announcement in respect of the Acquisition will be
made by the Company as soon as the terms and conditions of the
Acquisition have been determined.

An independent board committee of the Company comprising the
independent Directors will be formed to consider the terms of
the Acquisition and to advise the independent shareholders of
the Company in this regard. An independent financial adviser
will also be appointed to advise the independent board
committee as to the fairness and reasonableness of the
Acquisition.

A circular containing further details of the A Share Issue and
the Acquisition, the letter from an independent financial
adviser containing its advice to the independent board
committee and the recommendation of the independent board
committee and the Company's financial adviser on the
Acquisition for the purpose of considering and, if thought
fit, approving the Acquisition and other related matters, will
be despatched to the shareholders of the Company as soon as
practicable. Huajian and its associates will abstain from
voting on the resolutions approving the Acquisition in the
EGM.

PROPOSED AMENDMENT OF THE ARTICLES OF ASSOCIATION
As a result of the transfer of 476,760,000 State-owned shares
of the Company to Huajian on 28th December 2000, the Company
also intends to amend the Articles of Association of the
Company to reflect the existing shareholding structure of the
Company. Special resolutions will be proposed to the
shareholders of the Company for considering and if thought
fit, approving the proposed amendment to the Articles of
Association.

EXTRAORDINARY GENERAL MEETING
An EGM will be held during which special resolutions will be
proposed to the shareholders of the Company for their
consideration and approval of, if thought fit, the A Share
Issue and the Acquisition. The Company will despatch a notice
of the EGM to the shareholders of the Company informing the
exact date of convening the EGM. Upon the approval of the A
Share Issue and the Acquisition during the EGM, the A Share
Issue will still be subject to the approval of CSRC and the
Shanghai Stock Exchange for the listing of and dealing in the
A Shares on the Shanghai Stock Exchange.

GENERAL INFORMATION
Saved as disclosed herein, the Directors are not aware of any
matter discloseable under the general obligation imposed by
paragraph 2 of the Listing Agreement, which is or may be of a
price-sensitive nature.

DEFINITIONS
In this announcement, unless the context otherwise requires,
the following expressions have the following meanings:
'A Shares'               means the domestic ordinary shares of the
                         Company of RMB 1.00 each proposed to be
                         issued by the Company
'Board'                  means the board of Directors of the
                         Company 'Directors' means the directors,
                         including the independent non-executive
                         directors, of the Company
'the Company'            means Zhejiang Expressway Co., Ltd., a
                         joint stock company with limited
                         liabilities which was incorporated in the
                         PRC on 1 March, 1997, the H Shares of
                         which are listed on the Stock Exchange and
                         on the London Stock Exchange
'CSRC'                   means the China Securities Regulatory
                         Commission
'H Shares'               means the foreign shares of the Company of
                         RMB 1.00 each which are listed on the
                         Stock Exchange and on the London Stock
                         Exchange
'Listing Rules'          means the Rules Governing the Listing of
                         Securities on The Stock Exchange of Hong
                         Kong Limited
'Stock Exchange'         means The Stock Exchange of Hong Kong Limited
'Hong Kong'              means Hong Kong Special Administrative Region 
                         of the PRC
'Listing Agreement'      means the listing agreement entered into between 
                         the Company and the Stock Exchange pursuant to 
                         Appendix 7 of the Listing Rules of the Stock Exhange
'PRC'                    means the People's Republic of China, for
                         the purpose of this announcement, excludes
                         Hong Kong, Macau and Taiwan
'Huajian'                means Huajian Transportation Economic
                         Development Centre, a State-owned enterprise 
                         established pursuant to the laws of the PRC
'Shangsan Co'            means Zhejiang Shangsan Expressway Co.,
                         Ltd, a company established pursuant to the
                         laws of the PRC, which is 61% owned by the Company
'EGM'                    means the extraordinary general meeting of
                         the Company to be held to consider the A
                         Share Issue and the Acquisition
'Shanghai Stock Exchange'means Shanghai Stock Exchange of the PRC
'RMB'                    means Renminbi, the lawful currency of the PRC


By Order of the Board
Zhejiang Expressway Co., Ltd.
Zhang, Jingzhong
Director/Company Secretary
January 10, 2001