Infrastructure market in China

infrastructure china

Infrastructure has always been an urgent issue in highly developing countries, especially for a fast growing country like China, there is lots of potential domestic growth in infrastructure market mainly because of the economic and demographic shifts in this emerging market, especially the growing urbanization as said Juan Pablo Galvo, CEO of Nuevatal PCS de Bolivia (VIVA), one of Bolivia´s three mobile providers: ¨in China, India, Brazil, or Bolivia, the developing nation´s rural people are moving to urban centres looking for a better life¨; meanwhile the Chinese government has been investing infrastructure market not only in China but all over the world since 1970s.

Worldwide, capital project and infrastructure spending is expected to total more than $9 trillion by 2025, up from $4 trillion in 2012[i]. And in Asia Pacific market, the infrastructure market is expected to grow 7 to 8% a year over the decade, reaching US$ 5.36 trillion a year by 2025 representing 60% of the world total[ii] (the Western Europe´s share will shrink to less than 10%), representing an incessant growth in the infrastructure market in Asia Pacific, while it is undeniable that it is where China plays an important role. Micky Pant, chief executive of Yum China has agreed that China´s economic transition into a consumer-led growth model and the government´s continued reforms will boost the company’s prospects in the upcoming years.

¨You cannot continue to think that the world is the same as it was five years ago¨, said Juan Bejar, CEO of Fomento de Construcciones y Contratas (FCC), a construction and environmental services company based in Spain, such as the infrastructure market in China. Key infrastructure sectors such as extraction (oil, gas, coal, metals, and minerals), utilities (power generation, electricity T&D, gas, water, and telecommunications), manufacturing (petroleum refining, chemical and heavy metals), transport (rail, roads, airports and ports), and social (hospitals and schools)[iii] are prestigious parts of the national infrastructure investment program, aiming to bring up the level of Chinese national infrastructure along with its market by using an increasingly efficient transport logistics hence to tie the country together. There are many ways that the local governments finance urban infrastructure, but now the real concern is about how to continue (Shen Jianguang, Chinese economist at Mizuho Securities). As a development plus, Beijing is the principle office of Asian Infrastructure Investment Bank, the China-led Bank in order to deepen the cooperation with a framework for knowledge sharing, staff exchanges, analytical work, development financing and country-level coordination[iv] hoping to fill the massive infrastructure funding gap.                                                                                                                                                                                                                                                                                          

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[i] PwC – Oxford Economics

[ii] PwC

[iii] PwC – Oxford Economics

[iv] Reuters