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Asia infrastructure boom boon for China

2014-11-16 09:41 Xinhua Web Editor: Qin Dexing
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Infrastructure construction will continue to boom in Asia over the next decade, creating a trillion-dollar market where Chinese companies can be highly competitive, according to PricewaterhouseCoopers (PwC).

PwC projects Asia's infrastructure market will grow by seven to eight percent annually in the next 10 years, and near a value of 5.3 trillion U.S. dollars by 2025 or 60 percent of the world total.

PwC forecasts China's investment in infrastructure will maintain fast growth despite some claims of overspending. Half of Asian investments in infrastructure will be made in China, which has achieved remarkable improvements in infrastructure following a construction binge over the last 20 years.

"China has gotten a very strong base stock of infrastructure that will become more and more strategically focused on need," said PwC Asia-Pacific capital projects and infrastructure leader Mark Rathbone.

Rathbone named water assets, transportation networks and social infrastructure, such as affordable housing, as some of the infrastructure developments China will continue rolling out.

In addition to the huge domestic market, Chinese companies, which have developed a competitive edges in the past two decades in the area of fast construction, can also win a big share of the market in other burgeoning Asian economies, according to PwC.

China has been spending huge amounts of money on infrastructure, developing the world's biggest construction companies and banks, and the most extensive high-speed rail network.

Rathbone believes China's technological capability, construction expertise and financial strength will allow its companies to quickly build a strong presence in countries like Thailand and Indonesia.

However, Rathbone suggests Chinese financial institutions should quickly match their overseas funding management with the levels of Japanese or South Korean competitors to make the most of Asia's potential infrastructure boom.

"Chinese banks should step up from the commercial perspective," Rathbone said.

To sustain good cooperation, Chinese construction companies also need to deepen engagement with local communities, according to PwC.

"You can not simply take Chinese solutions. You need to understand the local economy, local laws and local requirements. You should look at how to address local requirements in your own business," Rathbone said.

"It's not just about solutions, financing and construction; you have to make sure that you really hit the economic objectives of the local government," he added.

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