21
january-february 2014
international
construction
REGIONAL REPORT: CHINA
A changing environment
>
The coming years in
China are expected to
be characterised by a
slowdown in demand and
a change in strategy when
it comes to construction.
Helen Wright
reports.
T
he Chinese government’s current Five-Year Plan (2011 to
2015) sees a shift in emphasis from the rapid economic
growth of previous years to higher quality, sustainable
growth for the future.
While this means that local governments on the front line
of infrastructure development are facing fiscal constraints as a
result, this is not to say that activity is stagnating – far from
it. A number of very large road, rail, energy, water and port
developments are still going ahead across the country.
Last year, for instance, plans for a second international airport
in the capital, Beijing, were approved – the budget for which
is reported by state media to be CNY 70 billion (US$ 11.2
billion). The new airport will be located in Daxing district in
southern Beijing and feature six commercial runways and one
military runway, as well as a 37 km rail line connecting it to the
city centre.
Construction is scheduled to start in 2014, with opening
planned for 2018. It will handle 45 million passengers a year in
the beginning and up to 70 million passengers by 2025.
In fact, December 2013 saw the Asian Development Bank
(ADB) upgrade its outlook for China’s GDP growth by 0.1
percentage point to +7.7% in 2013 and +7.5% in 2014 – a
forecast boosted by rising infrastructure investment in the
country.
Housing supply in China has also increased in recent years
to meet demand. According to the ADB, further residential
construction is forecast, with 36 million new affordable homes
planned under the 12th Five Year Plan at an estimated cost of
CNY 5 trillion (US$ 820 billion).
China overtook the US to become the world’s largest
construction market in 2010, and is expected to increase its
global share from 18% today to 26% in 2025, according to data
from Global Construction Perspectives and Oxford Economics.
And on the scale of built assets – the accumulation of buildings,
infrastructure, and machinery and equipment in a country –
China is also gaining rapidly, and could become the owner of
the world’s biggest built wealth as early as 2014, a report from
EC Harris suggests.
Manufacturing
Meanwhile, change is also coming to the Chinese construction
equipment market, with the coming years expected to be
characterised by a slowdown in demand and a change in strategy
from domestic manufacturers. At the same time, international
companies are still fighting for market share in the country.
Liugong president Yu Chuanfen said, “All world giants in the
industry are trying their utmost to snatch market share in China
and set up factories or joint ventures in China.
“At present, there is still a gap between domestic enterprises
Off-Highway Research European analyst Paul Howard forecast
that sales of construction equipment in China would increase
from US$ 22.6 billion in 2013 to US$ 25.6 billion by 2017.
A changing
environment
Over 30 Atlas
Copco air
compressors and
a fleet of Liebherr
duty cycle
crawler cranes
work on the West
Kowloon Rail
Terminus in Hong
Kong – a station
along a new, 142
km high-speed
rail link.
