Page 194 - 2020 White Paper on the Business Environment in China
P. 194
0 White Paper on the Business Environment in China
2019 compared with 3.8 percent in 2018. Although industry. Despite a slight three-point decline from
China has established new and sprawling highway 2018, the 2019 index remained “at a relatively
networks, with high-speed railway mileage taking high level” according to the 2019 Belt and Road
up more than 60 percent of the world’s total, the Infrastructure Development Index Report. It
country’s per capita infrastructure facilities remain indicates “good prospects” in the next two to three
low, noted the report (Xinhua, Grow Faster). years for infrastructure development in countries
and regions involved in the Belt and Road Initiative.
The mild index dip was attributed to heightened
The construction industry in China is expected global political risks and disruption of the world
to record a CAGR of 8.9 percent to reach 12,389.2 economy because of the tug-of-war between
billion yuan by 2023. The residential construction major countries, and the complex, changeable
industry in value terms increased at a CAGR of environment of the Belt and Road economies.
10.9 percent during 2014-2018. The commercial The report predicted infrastructure development
building construction market in value terms is can be uneven across regions at least into 2020.
expected to record a CAGR of 14.0 percent over the Southeast Asia maintains strong momentum in
forecast period. The infrastructure construction infrastructure development and ranked first among
was estimated to be 2,019.9 billion yuan in 2018, the seven regions for the third consecutive year.
posting a CAGR of 7.1 percent during review period. The huge population, fast-expanding economy
Growth of the Chinese construction industry slowed and favorable infrastructure environment have
down a bit down in 2019, driven by increased risk translated into booming demand and market
due to trade war with US, and slowing down of GDP potential for investment and development of
growth. In Q3 2018, growth in construction and energy, transportation and other infrastructure
manufacturing sector was lower than expected, facilities in Southeast Asia, where the index scored
leading to slower economic growth. Besides 125 in 2019 (Jing).
construction, financial sector also witnessed
slowdown. In order to manage projects effectively,
Chinese government is betting on transportation China’s domestic fixed-asset investment (FAI)
FAI with railways and subways as the key driving in highways and waterways registered steady
segments. Several favorable policy changes in growth in the first eight months of 2019. Total FAI
reserve ratios of banks have resulted in high in highways and waterways reached 1.42 trillion
liquidity boosting the new projects investments yuan (about US$199.47 billion) during the January-
and smoothening cash flow for construction August period, a year-on-year growth of 3.7 percent.
companies. While subway FAI is likely to increase Specifically, investment in inland rivers expanded
due to continuation of private sector involvement, 0.6 percent to reach 36.83 billion yuan, while that
railway FAI is likely to be equivalent to the highest of highway construction recorded the fastest
level of 2017. Slow GDP growth and increasing growth rate of 3.8 percent to 1.35 trillion yuan
trade war expects Chinese government to increase during the period. The FAI growth rate registered
the spending in infrastructure construction sectors in central regions hit 14.5 percent year-on-year for
to pace up its economy. Over the short to medium the first eight months, which was much higher than
term, spending in transportation can see a rise and that of western and eastern China. China expanded
it is favorable for infrastructure sector, specifically infrastructure investment in 2019, including 800
machinery products and construction firms billion yuan in railway construction and 1.8 trillion
(Business Wire). yuan in road construction and waterway projects
(Xinhua, Highways Waterways). China invested
Infrastructure Construction 488.9 billion yuan (US$72.7 billion) in transportation
infrastructure projects in the first quarter of 2019
The Belt and Road Infrastructure Development alone, up 4.8 percent from the previous year at
Index, a key indicator of the prospects of B&R the same time. Ministry of Transport spokesman
economies’ infrastructure sector, remained stable Wu Chungeng said that more than 101.2 billion
at 119 in 2019. The higher the index, the better yuan was pumped into railway projects in the
prospects a country has in the infrastructure January-April period, and 15.5 billion yuan into
the civil aviation sector, increasing investment
194
2019 compared with 3.8 percent in 2018. Although industry. Despite a slight three-point decline from
China has established new and sprawling highway 2018, the 2019 index remained “at a relatively
networks, with high-speed railway mileage taking high level” according to the 2019 Belt and Road
up more than 60 percent of the world’s total, the Infrastructure Development Index Report. It
country’s per capita infrastructure facilities remain indicates “good prospects” in the next two to three
low, noted the report (Xinhua, Grow Faster). years for infrastructure development in countries
and regions involved in the Belt and Road Initiative.
The mild index dip was attributed to heightened
The construction industry in China is expected global political risks and disruption of the world
to record a CAGR of 8.9 percent to reach 12,389.2 economy because of the tug-of-war between
billion yuan by 2023. The residential construction major countries, and the complex, changeable
industry in value terms increased at a CAGR of environment of the Belt and Road economies.
10.9 percent during 2014-2018. The commercial The report predicted infrastructure development
building construction market in value terms is can be uneven across regions at least into 2020.
expected to record a CAGR of 14.0 percent over the Southeast Asia maintains strong momentum in
forecast period. The infrastructure construction infrastructure development and ranked first among
was estimated to be 2,019.9 billion yuan in 2018, the seven regions for the third consecutive year.
posting a CAGR of 7.1 percent during review period. The huge population, fast-expanding economy
Growth of the Chinese construction industry slowed and favorable infrastructure environment have
down a bit down in 2019, driven by increased risk translated into booming demand and market
due to trade war with US, and slowing down of GDP potential for investment and development of
growth. In Q3 2018, growth in construction and energy, transportation and other infrastructure
manufacturing sector was lower than expected, facilities in Southeast Asia, where the index scored
leading to slower economic growth. Besides 125 in 2019 (Jing).
construction, financial sector also witnessed
slowdown. In order to manage projects effectively,
Chinese government is betting on transportation China’s domestic fixed-asset investment (FAI)
FAI with railways and subways as the key driving in highways and waterways registered steady
segments. Several favorable policy changes in growth in the first eight months of 2019. Total FAI
reserve ratios of banks have resulted in high in highways and waterways reached 1.42 trillion
liquidity boosting the new projects investments yuan (about US$199.47 billion) during the January-
and smoothening cash flow for construction August period, a year-on-year growth of 3.7 percent.
companies. While subway FAI is likely to increase Specifically, investment in inland rivers expanded
due to continuation of private sector involvement, 0.6 percent to reach 36.83 billion yuan, while that
railway FAI is likely to be equivalent to the highest of highway construction recorded the fastest
level of 2017. Slow GDP growth and increasing growth rate of 3.8 percent to 1.35 trillion yuan
trade war expects Chinese government to increase during the period. The FAI growth rate registered
the spending in infrastructure construction sectors in central regions hit 14.5 percent year-on-year for
to pace up its economy. Over the short to medium the first eight months, which was much higher than
term, spending in transportation can see a rise and that of western and eastern China. China expanded
it is favorable for infrastructure sector, specifically infrastructure investment in 2019, including 800
machinery products and construction firms billion yuan in railway construction and 1.8 trillion
(Business Wire). yuan in road construction and waterway projects
(Xinhua, Highways Waterways). China invested
Infrastructure Construction 488.9 billion yuan (US$72.7 billion) in transportation
infrastructure projects in the first quarter of 2019
The Belt and Road Infrastructure Development alone, up 4.8 percent from the previous year at
Index, a key indicator of the prospects of B&R the same time. Ministry of Transport spokesman
economies’ infrastructure sector, remained stable Wu Chungeng said that more than 101.2 billion
at 119 in 2019. The higher the index, the better yuan was pumped into railway projects in the
prospects a country has in the infrastructure January-April period, and 15.5 billion yuan into
the civil aviation sector, increasing investment
194
