Construction market in China: Size and growth forecast 2015-2019

Public-private partnership (PPP) and the construction market in China

The PPP model is a fairly new concept in the construction market in China. It was introduced in the late 2000s and there has been an increase in private investment in the market in China ever since. Increased foreign participation in the construction sector is expected to boost the market.

Technavio predicts the market will continue to grow based on higher demand for infrastructure development in China. The Chinese government is taking significant steps to put the country on par with developed nations of the world. In its 12th Five-Year Plan 2011–2015, the government identified construction as its key focus area. Massive financial reforms were initiated to this effect in order to incent investment in the railway sector. These reforms focus on diversifying the sources of funding and increasing social capital and local government participation in railway projects. The construction market in China is expected to grow at a CAGR of over 12% with the launch of many new projects during the forecast period.

Competitive landscape of the construction market in China

The competition in China is quite intense, especially due to the efforts made by the government to stabilize the construction market. Increased government participation and incentives are attracting many private players to the market. The government grants project concessions, thus creating space for small and medium-sized companies.

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The top vendors in the market include:

•   CCCC
•   China Railway Construction
•   China State Construction Engineering

Key vendor news highlights

January 2015: CCCC is awarded the highway project in the Linhe-Baigeda section of the Beijing-Xinjiang Highway.

October 2014: China Railway Construction wins a civil construction project in Wuhan, China.

August 2014: China State Construction Engineering wins general construction contract for the Taihe Xiamen Yard in Xiamen.
 
August 2014: China State Construction Engineering wins expressway construction contract in Nanning City, China.

December 2014: China Communications Construction Group (CCCG), the parent company of CCCC, signs an equity acquisition agreement with the majority shareholder and other associated shareholders of Greentown China Holdings.

December 2014: CCCC announces an agreement on equity acquisition from John Holland.

 

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Construction market in China by sector

•     Residential
•     Non-residential
•     Infrastructure 

In a massive boost to the country’s infrastructure, the Chinese government aims to build 200 additional airports across the country by 2019. Presently, the Beijing, Shanghai Pudong, Chengdu, Guangzhou, and Shanghai Hongqiao airports handle almost 40% of the entire freight and air traffic in the country. However, to address the growing needs of China’s population, new airports are required to connect the country.
 
Metro and light railway are the other crucial segments of Chinese infrastructure. They are expected to play a key role in easing the growing traffic congestion that concerns all prominent Chinese cities. The Beijing-Guangzhou high-speed railway line is one such project that is under construction, and aims to reduce the increasing congestion experienced on the Beijing-Guangzhou route. It is expected to be operational by the end of 2015.

Other sections of the report include an analysis of the following:

•     Key drivers, challenges, and trends and their impact on the construction market in China 
•     Five forces analysis of the construction market in China
•     SWOT analysis of the leading companies in the construction market in China
•     Estimated market spending on infrastructure projects in China

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