Abstract
Long term growth trends include a growing domestic economy, ongoing
industrialization, expansion and upgrading of physical infrastructure, and
further population and household growth.
Spending in China to grow 8.1% yearly through 2013
Construction expenditures in China are forecast to reach 11.5 trillion yuan in
2013 after growing 8.1 percent annually in real terms from 2008, a
deceleration from the 2003-2008 period. In the short term, construction
activity will benefit from government spending packages designed to offset the
effects of the global economic downturn and to repair damage caused by the May
2008 earthquake in Sichuan. In the long term, a growing domestic economy,
ongoing industrialization, continuing efforts to expand and upgrade physical
infrastructure, rising income levels, and further population and household
growth will fuel construction expenditures in China.
Nonbuilding construction to grow at fastest pace
Nonbuilding construction expenditures will increase at the fastest pace,
averaging 9.0 percent per year in real terms through 2013. The government
remains the main source of funding for infrastructure- related construction.
Nonbuilding construction activity will benefit from government efforts to
modernize the country' s highways, railways and subway systems. In addition,
the government continues to increase the country' s power generation capacity
and improve electricity transmission networks, as well as expand and improve
municipal water supply coverage and natural gas distribution, further boosting
nonbuilding construction expenditures.
Nonresidential building was the largest construction sector in China in 2008,
reflecting the nation' s emergence as an economic powerhouse over the last
decade and its position as the largest producer of manufactured goods in the
world. Real nonresidential building construction expenditures are projected to
rise 8.0 percent per annum through 2013, moderating from the 2003-2008 period.
Decelerating trade volume will constrain nonresidential building construction
expenditures in the short term, especially for manufacturing facilities
concentrating on export markets. However, ongoing industrialization and
modernization, and government efforts to improve health care and education
conditions, will support gains through the long term.
Residential building construction expenditures are expected to increase 7.5
percent annually in real terms through 2013. Growth will be bolstered by
rising income levels and further urbanization. Government efforts to improve
living conditions for low-income earners including the construction of
affordable and low-rent houses in urban areas and subsidies for alterations of
dilapidated farmhouses in rural areas) will also bolster residential building
construction spending. However, decelerations in the overall economy and in
household formation will constrain residential building construction activity
to some extent.
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