|
|
China Infrastructure Report Q3 2009Published by: Business Monitor International Published: Jul. 2, 2009 - 97 Pages Table of Contents
AbstractThe strong results of China Railway Group (that has been bolstered by new government contracts), aswell as the existence of several ongoing infrastructure projects, are clear signs of sustained activity inChina’s infrastructure sector. These developments put China’s infrastructure sector on a positive footingto achieve the 7% industry value real growth rate that BMI forecasts for 2009 and 2010.According to the Beijing Municipal Development and Reform Commission, as cited by ChinaKnowledge, Beijing alone is planning to spend US$160bn in infrastructure projects in 2009. Infrastructureprojects will represent 35% of the municipality's fixed asset investment in 2009, a 4% rise from 2008. This is quite a surprising announcement given the significant investments in the city that were alreadymade in preparation for the Olympic Games. The pledge does highlight the high government commitmentto infrastructure spending, but we also believe it raises questions as to whether or not the funds are beingallocated where they can maximise productive capacities. In this Q309 China Infrastructure Report, we maintain our forecasted growth levels for 2009 and 2010 at7%. We anticipate that the growth rate in the industry value will decelerate thereafter as the stimulusexpires and the government focuses on rebuilding its savings, leaving the industry to its own devices. Ouroutlook for the actual effects of the stimulus plan is in line with the local industry view which has beenexpressed in various press reports over the past quarter. Accordingly, the situation will normalise andpositive effects for the industry will be felt towards the end of Q409. In tandem, the demand for rawmaterials will also rise (steel and cement), though huge stockpiles will mean that there is plenty ofdomestic supply to sustain the initial phases of the infrastructure plan, and thus demand for buildingmaterial imports is expected to rise in H110. For 2009, BMI forecasts that the industry value will beCNY1,770bn and will rise to CNY1,882bn in 2010. According to BMI’s revised Infrastructure Business Environment and Project Finance Ratings, China’sinfrastructure business environment and investment risks are relatively low. For the businessenvironment, the country achieves an overall score of 69 out of 100, coming in at second place in the AsiaPacific region. The score is bolstered by strong industry growth and the large size of the market. TheProject Finance ratings offer a more mixed picture. The overall score is 60.4, suggesting a moderate levelof potential risks throughout a project’s life cycle in the country. However, according to our tables, themarket does present higher risks in the Design and Construction phase when compared to other marketsin the region. When compared to other regional markets in the Commissioning and Operating phases,meanwhile, the risk environment in China is more appealing than others. This could mean there is greaterchance for revenue generation to become disturbed in the longer term. Get Full Details About This Report >> |
|
|||
|
About MarketResearch.com
|
||||