China Infrastructure Report Q2 2008

As one of the fastest-developing economies in the world, China has a constant need for infrastructural development. This report valued the country's construction industry at US$146.40bn in 2006 and forecasts it to grow at an average rate of 11.3% during 2008-2012.

The recent growth witnessed on the infrastructure front has given a tremendous boost to industrial and tourism development in China. The government has re-affirmed its commitment to infrastructure building by chalking out some major development plans for the 11th five-year plan period (2006-2012). These include construction and upgrading of roads, railways, oil utilities, water infrastructure and ports. Major ongoing projects in the country include new road and rail links to Central Asia and South East Asia, the Beijing-Shanghai high speed railway, the Central Asian pipeline and the first new-generation nuclear power plant being built in Zheijang province.

A large number of companies are setting up manufacturing units in China. Furthermore, the Beijing Olympics in 2008 have encouraged a large number of international enterprises to set up hotels and resorts in the country. The state-of-the-art bird's nest-shaped Olympic stadium is almost ready for the forthcoming games. Major companies operating in the country's infrastructure sector include China State Construction Engineering Corporation (CSCEC), China Railway Engineering Corporation (CREC) and China Railway Construction Corporation (CRCC). A rapid pace of development is, however, marred by poor labour conditions, high levels of corruption and a decrepit legal system.

Although the construction industry has been dominated by a few large public-sector enterprises, China is now trying to make the industry more competitive.

According to BMI's forecast, the construction industry in China is expected to be worth about US$315.32bn by 2012, contributing about 7.17% to the nation's gross domestic product (GDP).