Economic growth spurs construction

25 April 2008

China: A projected rise in China's GDP looks like stimulating a new wave of construction projects throughout the country, following a dip in activity in 2004 (see iC July-August 2004). The latest figures, released by the National Development and Reform Commission (NDRC), estimate China's GDP will grow +8.5 to +9% in 2006. This follows a rise of +8.5% in 2004.

This year has already seen Beijing's Government announce plans to spend an extra CNY 20 billion (US$ 2.48 billion) on Olympic Games-related infrastructure over the next 12 months. This includes new roads, urban transportation, and CNY 6.5 billion (US$ 806 million) on construction of new satellite towns for 5.7 million people.

A CNY 19.7 billion (US$ 2.44 billion) programme of railway, light rail, metro and tram expansion has also been announced recently by Chinese Minister of Railways, Liu Zhijun. According to the Asian Development Bank (ADB), which is working with the Chinese Government to draw up a plan to reform the country's passenger and freight transport network, investment in the railways sector is expected to total CNY 450 billion (US$ 55.8 billion) between 2003 and 2007.

Part of the ADB plan is expected to involve a more integrated approach to infrastructure, using intermodal transport hubs to ease congestion. A prime example is the recently started CNY 5.4 billion (US$ 670 million)light rail link between Beijing Airport and the city centre.

Maintaining this level of GDP growth has also thrown the spotlight on investment in the country's freight transportation network, particularly rural roads and ports. In Shandong Province, the ports of Qingdao and Weihai are planning to invest a total of CNY 53 billion (US$ 6.6 billion) over the next five years, while Liaoning Province is to invest CNY 64 billion (US$ 7.9 billion) in its ports by 2010, alongside an investment of CNY 80 billion (US$ 9.9 billion) in the construction of 2090 km of highways.

Aiding exports through Hong Kong will be a new 'mega-bridge' linking the Province with Zhuhai and Macao. The CNY 32.25 billion (US$ 4 billion structure will be 30 km long and is “part of plans to form closer social and economic ties” throughout the region.

Facilitating delivery of goods by road will see an investment of CNY 12.1 billion (US$ 1.5 billion) in Gansu Province's network.

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