Article source: ConstructConnect
- Since the turn of this century in 2000, and excepting the latest six months of slower activity due to COVID-19 shutdowns, China has managed exceptional year-over-year gross domestic product growth (i.e., of +6% recently, but +10% or more earlier) due, in large part, to a string of major infrastructure spending programs. To make up for the nation’s Q1 2020 downturn in output, the government in Beijing is launching another wave of massive public investment. This time, though, the trillions of yuan will go into other areas of the economy. Instead of road, bridge, railway, train station, rapid transit and airport projects, the emphasis will be on securing China’s lead in such hot-prospect and high-tech sectors as telecommunications and biotechnology.
- In the past, when China embarked on an infrastructure building binge, the huge increase in demand for raw materials necessitated sourcing from multiple resource sites around the world, with extraction firms in Australia, Canada, South America and Africa all benefitting. Commodity prices soared and the owners of raw materials had a field day. A commonly quoted statistic is that nearly 50% of base metals, fossil fuels, steel and aluminum consumption worldwide has been in the People’s Republic. If there is to be an emphasis on different kinds of infrastructure works this time, though, the impacts for resource producers will be harder to assess, until the specs appear.
