Construction Expenditures to Grow in China

Construction expenditures in China will increase 12 percent annually through 2009 reaching 4.9 trillion yuan ($604 billion at current exchange rates), according to a study released by Cleveland-based market research firm the Freedonia Group.

Non-building construction will be the fasted growing sector, with expenditures climbing nearly 11 percent annually through 2009, the study predicts. Growth will be driven by government funding for large-scale infrastructure projects currently underway, such as the Qinghai-Tibet Railway, Three Gorges Dam, West-East Electricity Transmission, South-North Water Diversion and the “7918 Network” national highway system.

According to the Freedonia Group, residential building construction activity will advance at an 8.8 percent annual pace through 2009, spurred by government efforts to further boost average per capita living space and private home ownership. The privatization of home ownership has been a dramatic trend in this sector. As a result of government reform efforts, the percentage of homes that are privately owned has climbed from 51 percent in 1994 to 87 percent in 2004. By 2014, privately owned housing will account for more than 95 percent of all units, according to the Freedonia study.