In 2011, Chinese construction companies went through what was for them a rare experience - a slowdown. After the phenomenal growth of the last decade and particularly the last two years, construction growth slowed in 2011, and some parts of the industry - particularly equipment - manufacturers saw demand fall sharply.
As Li Dianhe, vice president of one of China's bigger equipment producers, Shantui said, "There has been a big drop in business in China since April (2011), especially earthmoving equipment like rollers and graders. They are down -30% to -40% on last year due to the monetary cooling policy and the conclusion of some big projects."
These sentiments were echoed by Ken Lousberg, president of Terex China, who also stressed that the market could well pick up just as quickly as it turned down. "Things change very quickly in China and if you're not there you can get left behind," he said,
Mr Lousberg continued, "China is hard to predict because the money supply is switched on and off very quickly. It depends on inflation. Clearly our truck crane business was affected earlier in the year, but the money supply can also go the other way."
And it would appear that having hiked interest rates in 2010 and 2011, the Chinese government now sees inflation falling, and is turning on the taps accordingly. The money supply is now increasing, and interest rates have been flat since July, with the expectation of a cut in the cost of borrowing some time in 2012.
One of the big areas of concern in China during the boom of 2009 and 2010 was that a bubble was building up in the real estate sector, particularly in Beijing and Shanghai. This was a problem that continued into 2011, with data from the National Bureau of Statistics showing prices for new apartments were in some cases more than +10% higher in January 2011 than they were 12 months prior.
In contrast, data for November 2011, the most recent available, shows prices cooling. In Beijing for example, the cost of a small apartment (less than 90 m2) was less than +2% higher than a year previously.
So the Chinese market looks like it is returning to a stronger phase of growth, but that does not necessarily mean we will see more of the same type of scheme that was prevalent under the stimulus plan.
One of the big features of the stimulus plan was the strong emphasis on the construction of high-speed railway lines, which received a big slice of the CNY 1.5 trillion (US$ 238 billion) that was set aside for infrastructure projects.
China has a target of building 25000 km of high speed lines by 2015, which some believe would be more than the rest of the world combined. About half of that network is now in place, including the flagship 1318 km Beijing-Shanghai line, which has cut the journey time between these two cities to less than five hours.
However, three key factors have seen China cool its approach to high-speed rail. The first was the launch of an investigation in February 2011 into corruption by the then minister of railways, Liu Zhijun, who was suspected of taking more than US$ 100 million in bribes.
Second was the crash between two trains - one stationary and one coming up behind it - in Wenzhou, Zhejiang province in July, which killed 40 people and left almost 200 more injured. Authorities rushed to blame the crash on lightning striking one of the trains, but further investigation showed the main cause to be an unsafe signalling system.
An official report into the crash published at the end of last year was critical of the Ministry of Railways and led to administrative punishment for 54 of its officials. The report paints Mr Liu as the chief culprit for the crash, and although his policies may have been to blame, the argument is undermined by the fact that he was dismissed five months before it happened.
The crash prompted Chinese authorities to reduce the maximum speed on operational lines and suspend work on under construction segments. This, combined with higher than anticipated construction costs, has seen banks pull-back on lending to rail projects. Meanwhile, some sections of the Chinese press have criticised high-speed rail for its low passenger levels and relatively high ticket prices, calling its viability into question.
Change of focus
Besides this cooling towards high-speed rail, there is also a sense that China is changing the focus of its investment away from infrastructure-heavy development to measures that will help redress some of the social imbalances that have built-up over the last decade in particular.
On a national scale, the break-neck pace of development on the eastern seaboard, particularly around major cities like Shanghai and Beijing has raced ahead of economic growth in the central and western regions. And at a personal level, the gap between the richest Chinese and the poorest is growing, as indicated by an economic measure called the Gini Coefficient.
It is true that, as John F Kennedy said, "A rising tide lifts all boats," meaning in this case that China's economic growth has seen everyone in the country get richer. It is estimated that more than 200 million Chinese people have been lifted out of poverty by the country's rapid economic development.
But there are growing fears that the widening gulf between rich and poor, combined with an economic slowdown this year could result in more hardship for many Chinese and result in civil unrest.
As well as contemplating a change in development policy, China will also see a change of leadership this year. President Hu Jintao will step down in November after ten years in charge, to be replaced by Xi Jinping, a former provincial governor, who has held a string of increasingly important posts in China's government and Communist party since emerging as a leadership contender in 2007.
It remains to be seen whether this change in leadership will see a change in policy. Mr Hu's presidency has been marked by impressive economic growth and a focus on infrastructure development, even during the global financial crisis. However, the case of Mr Liu and others shows his failure to tackle one of China's biggest problems - corruption.
But for the moment at least, China still has an appetite for construction on a grand scale. Last June, for example, saw the completion of the Jiaozhou Bay Bridge. At 42 km, it is the world's longest sea crossing, and was built at a cost of CNY 10 billion (US$ 1.58 billion) to link the cities of Qingdao and Huangdao, which face each other across the mouth of bay in Shandong province.
Similarly ambitious is the 29.6 km Hong Kong - Zhuhai - Macao crossing across the mouth of the Pearl River delta. The link will comprise a 6.8 km immersed tunnel, transitioning to a cable-stayed bridge via an artificial island - a similar concept to the Øresund link between Copenhagen in Denmark and Malmö, Sweden. Due for completion in 2016, the project has already seen a world record set for the largest piles ever driven.
As well as transport infrastructure there is a heavy focus on water resources schemes in China, and again, there is a taste for the grand. One of the biggest schemes is a project to divert water from the Yangtze River some 1300 km to the arid north eastern part of the country, which includes Beijing.
The project got underway in 2002, but final completion may not be until 2050, and the full cost of the scheme can only be guessed at. At the start of construction it was put at about US$ 22 billion in 2002 terms.
So change may be on the way, and as many have pointed out, China is capable of shifting direction with remarkable speed in any country's terms, let alone one with a population of some 1.35 billion people. But even if the emphasis did move away from large scale infrastructure, in relative terms, China will still remain a massive driving force in the global construction sector.
And it is worth remembering, that a shift towards development of China's poorer regions and other attempts to redress the balance will still involve the construction industry. Initiatives like improving rural roads, water supplies, sanitation, housing and power grids will all have a heavy construction focus, albeit on a smaller, more localised scale.