Construction Outlook in China

  • July 2012
  • -
  • Freedonia
  • -
  • 239 pages

Expenditures to increase 8.8% yearly through 2016

Construction expenditures in China will rise 8.8 percent per annum in real terms through 2016. Although growth will decelerate from the rapid 2006-2011 pace, the country will continue to out-perform other major national construction markets. Ongoing urbanization and industrialization, rebounding foreign investment funding, rising personal income levels, and further population and household growth will all work to drive gains. However, further growth will be prevented by a slowdown in the Chinese economy through the forecast period, especially in fixed asset investment.

Nonbuilding sector to remain fastest growing

Construction expenditures in China are about equally split among the residential building, nonresidential building, and nonbuilding construction segments, each of which accounted for around one-third of construction spending in 2011. Nonbuilding construction will be the fastest growing segment through 2016. Growth will benefit from state-led efforts to raise and upgrade the country’s transportation infrastructure, which includes a national high-speed railway and the “7918 Network” national highway system. Residential building construction will advance at an 8.5% annual rate through 2016, primarily fueled by rising personal income levels, household growth, and continuing urbanization. Government efforts to improve living conditions for low-income earners (including the construction of affordable, low-rent houses in urban areas and subsidies for alterations of dilapidated farmhouses in rural areas) will also help spur gains in residential building construction spending. Nonresidential building construction expenditures will post the slowest gains in real terms through 2016. Advances will be driven by robust gains in consumer spending -- both in China and abroad -- for Chinese manufactured goods and services. These increases will spur domestic and foreign direct investment in plants, commercial buildings, warehouses, and shopping complexes.

Northwest region to lead market gains

Although China is a single country, it consists of numerous distinct regional markets characterized by different climates, populations, and levels of economic development. Construction expenditures in the Northwest region are expected to register the fastest gains of any region in China, benefiting from the government’s “Great Western Development” strategy, which will result in sizable increases in spending on infrastructure and manufacturing facilities in this area. However, the Central-East will remain home to about 30 percent of the country’s total population and 37 percent of its economic output, supporting a vast construction market that will account for 42 percent of overall spending on construction in China in 2016. Gains in the Central-East will be led primarily by growth in residential building construction, benefiting from the high personal income levels in the region.

Table Of Contents


TABLE OF CONTENTS

INTRODUCTION ix

I. EXECUTIVE SUMMARY 1

II. MARKET ENVIRONMENT 4

General 4
Economic Overview 5
Recent Economic Performance 5
Economic Outlook 7
Demographic Overview 11
Population 12
Urbanization 14
Households 15
Industrialization and Manufacturing Trends 17
Gross Fixed Capital Formation Trends 20
Labor Force and Employment Patterns 21
Personal Income Trends 25
Banking System and Regulations 28
Currency Exchange Rates 32
Inflation and Pricing Patterns 35
Legal and Regulatory Environment 38
Construction Technology and Quality 42
The Twelfth Five-Year Plan 44

III. OVERVIEW 47

General 47
Construction Expenditures by Type 47
Construction Expenditures by Market 50
International Environment 53
Construction Expenditures for Selected Countries 54
Foreign Participation in China’s Construction Industry 55

IV. RESIDENTIAL BUILDING 58

General 58
New Housing Construction Expenditures 62
New Housing Completions 65
Single Family 68
Multiple Family 70
Additions and Alterations 71
Maintenance and Repairs 73
Housing Stock 75
Single Family 78
Multiple Family 80
Ownership 82
Living Space 83
Urban 86
Rural 87

V. NONRESIDENTIAL BUILDING 88

General 88
New Construction 92
Additions and Alterations 93
Maintenance and Repairs 93
Structure Types 94
Industrial 96
Office and Commercial 98
Institutional 99
Other 100
Nonresidential Building Stock 101

VI. NONBUILDING CONSTRUCTION 103

General 103
New Construction 106
Maintenance and Repairs 108
Structure Types 108
Roads and Other Transportation Infrastructure 110
Utilities 113
Other 114

VII. REGIONAL TRENDS 116

General 116
Regional Demographic and Economic Trends 118
Population Patterns 119
Economic Outlook 121
Regional Construction Expenditures 123
Central-North 125
Overview 125
Construction Expenditures 127
Northeast 129
Overview 129
Construction Expenditures 132
Central-East 133
Overview 133
Construction Expenditures 135
Central-South 137
Overview 137
Construction Expenditures 139
Southwest 141
Overview 141
Construction Expenditures 143
Northwest 145
Overview 145
Construction Expenditures 147

VIII. INDUSTRY STRUCTURE 150

General 150
Industry Composition 151
Market Share 155
Marketing 158
Financial Issues and Requirements 160
Capital Expenditures 161
Project Funding 163
State 163
Private Domestic 164
Foreign Investment 164
Company Profiles 165
Anhui Construction Engineering Group Company Limited 166
Balfour Beatty plc 168
Bechtel Group Incorporated 170
Beijing Construction Engineering Group Company
Limited 172
Beijing MCC Equipment Research and Design, see
Metallurgical Corporation of China
Beijing Urban Construction Group Company Limited 174
Black and Veatch Holding Company 176
Bouygues SA 177
China Communications Construction Company Limited 179
China Gezhouba Group Company Limited 182
China Harbour Engineering, see China Communications
Construction
China National Chemical Engineering Company Limited 184
China National Machinery Industry Corporation 186
China Railway Construction Corporation Limited 187
China Railway Group Limited 189
China Road and Bridge, see China Communications
Construction
China State Construction Engineering Corporation 192
China Tianchen Engineering, see China National
Chemical Engineering
Chiyoda Corporation 195
CISDI Engineering, see Metallurgical Corporation
of China
CTCI Corporation 197
Dongfang Electric Corporation 199
EandC Engineering, see CTCI
Fluor Corporation 201
Foster Wheeler AG 203
Fujian Construction Engineering Group Company 205
Gammon Construction, see Balfour Beatty
Guangdong Construction Engineering Group Corporation
Limited 207
Guangsha Construction Group Company Limited 208
Hebei Construction Group Company Limited 209
Hip Hing Construction, see NWS Holdings
HOCHTIEF AG 211
Hunan Construction Engineering Group Corporation 213
Jacobs Engineering Group Incorporated 214
Jiangsu Suzhong Construction Group Company Limited 215
Jingding Engineering and Construction, see CTCI
Leighton Holdings, see HOCHTIEF
Lend Lease Corporation Limited 217
Metallurgical Corporation of China Limited 219
NWS Holdings Limited 222
Qingjian Group Company Limited 224
Shaanxi Construction Engineering Group Corporation 225
Shang Ding Engineering and Construction, see CTCI
Shanghai Construction Group General Company 227
Shanghai Urban Construction Group Corporation 229
Sichuan Huashi Group Corporation Limited 230
Sinohydro Group Limited 232
URS Corporation 234
WISDRI Engineering and Research Incorporation, see
Metallurgical Corporation of China
Zhejiang Construction Investment Group Company
Limited 236
Other Companies Mentioned in Study 238

LIST OF TABLES

SECTION I -- EXECUTIVE SUMMARY

Summary Table 3

SECTION II -- MARKET ENVIRONMENT

1 Gross Domestic Product of China 11
2 Population of China 13
3 Households in China by Region 16
4 Manufacturing Value Added in China 19
5 Gross Fixed Capital Formation in China by Region 21
6 Employment Trends in China, 2001-2011 24
7 Per Capita Gross Domestic Product in China by Region 27
8 Interest Rates in China, 2001-2011 32
9 Chinese Currency Exchange Rates, 2001-2011 34
10 Construction Pricing Deflators in China 37

SECTION III -- OVERVIEW

1 Construction Expenditures in China by Type 49
2 Construction Expenditures in China by Market 52
3 Construction Expenditures for Selected Countries, 2001-2011 55
4 Foreign Participation in China’s Construction Industry 57

SECTION IV -- RESIDENTIAL BUILDING

1 Residential Building Construction Expenditures in China
by Type 62
2 New Housing Construction Expenditures in China 64
3 New Housing Completions in China 67
4 Residential Building Addition and Alteration Expenditures
in China 73
5 Residential Building Maintenance and Repair Expenditures
in China 75
6 Housing Stock in China by Type and Ownership 77
7 Average Living Space in China 85

SECTION V -- NONRESIDENTIAL BUILDING

1 Nonresidential Building Construction Expenditures in China
by Type 91
2 Nonresidential Building Construction Expenditures in China
by Structure 95
3 Nonresidential Building Stock in China 102

SECTION VI -- NONBUILDING CONSTRUCTION

1 Nonbuilding Construction Expenditures in China by Type 106
2 Nonbuilding Construction Expenditures in China by Structure 109
3 Paved Roads in China by Region 112

SECTION VII -- REGIONAL TRENDS

1 Population of China by Region 120
2 Gross Domestic Product of China by Region 122
3 Construction Expenditures in China by Region 124
4 Central-North Region of China: Construction Expenditures 129
5 Northeast Region of China: Construction Expenditures 133
6 Central-East Region of China: Construction Expenditures 137
7 Central-South Region of China: Construction Expenditures 141
8 Southwest Region of China: Construction Expenditures 145
9 Northwest Region of China: Construction Expenditures 149

SECTION VIII -- INDUSTRY STRUCTURE

1 Revenue Data: Selected Construction Companies, 2011 154

LIST OF CHARTS

SECTION II -- MARKET ENVIRONMENT

1 Population of China by Age, 2001-2021 14
2 Households in China by Region, 2001-2021 17
3 Employment Trends in China, 2001-2011 25
4 Per Capita Gross Domestic Product in China by Region, 2011 28
5 Chinese Currency Exchange Rates, 2001-2011 35
SECTION III -- OVERVIEW
1 Construction Expenditures in China by Type, 2011 50
2 Construction Expenditures in China by Market, 2001-2021 53
SECTION IV -- RESIDENTIAL BUILDING
1 New Housing Construction Expenditures in China, 2001-2021 65
2 New Housing Completions in China, 2001-2021 68
3 Housing Stock in China by Type, 2001-2021 78
4 Average Living Space in China, 2001-2021 85
SECTION V -- NONRESIDENTIAL BUILDING
1 Nonresidential Building Construction Expenditures in China
by Structure, 2011 96
SECTION VI -- NONBUILDING CONSTRUCTION
1 Nonbuilding Construction Expenditures in China
by Structure, 2011 110
2 Total and Paved Roads in China, 2001-2021 112
SECTION VII -- REGIONAL TRENDS
1 Gross Domestic Product of China by Region, 2011 122
2 Construction Expenditures in China by Region, 2011 125
3 Central-North Region of China 127
4 Northeast Region of China 131
5 Central-East Region of China 135
6 Central-South Region of China 139
7 Southwest Region of China 143
8 Northwest Region of China 147
SECTION VIII -- INDUSTRY STRUCTURE
1 Construction Market Share in China by Company, 2011 155

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