China’s constructors are preparing for change

11 September 2018

Changes and developments are expected in the coming months in respect to the globalisation of the construction industry – for China, the outlook is focused on infrastructure.

For China’s construction companies, the outlook is all about infrastructure. At home, urbanisation continues to drive the need for road and rail links, energy and water supply.

As Chinese cities mature, more complex engineering is required for the growing populations, with waste treatment, desalination and green development projects now coming online.

Overseas, Chinese contractors are hoping to export their considerable expertise in urban and infrastructure development to compete for major international development projects in the 65 ‘Belt and Road Initiative’ countries.

Meanwhile, measures by the government to slow down the booming residential sector are having their intended effect and will continue to do so, particularly in frothy tier-2 city markets.

Already, five Chinese construction groups are ranked within the world’s top 20 contractors. Important markets include Turkey and Eastern Europe, with projects such as the Hungary-Serbia high-speed rail line benefiting from Chinese funding and delivery know-how.

The Belt and Road programme

The high-speed rail project is part of the Belt and Road programme, which could deliver up to $3 trillion worth of projects in the next decade. A two-pronged trading strategy, the Belt and Road programme aims to build overland corridors to Europe through Central Asia and the Middle East and a sea route from China’s south coast to East Africa and the Mediterranean.

One challenge the Belt and Road programme faces is how to attract international financing.

There is a perception that Chinese contractors are not prepared for the range of risks they will face, particularly in developing countries. However, many Chinese companies with an appetite to work overseas are keen to learn about outside approaches to risk management and to effect change within their organisations.

For more information contact Alistair Hughes, Specialty Coordinator, JLT China on +852 6295 6380