(Last updated: 25 Mar 2012)
Trends and opportunities
China is to accelerate construction of urban public facilities by investing as much as CNY7 trillion during its 12th Five-Year Plan from 2011 to 2015.
It is estimated that investment on urban rail transit is to surpass CNY700 billion in the 12th Five-Year Plan period.
(Source: China Daily, 'China to invest 7t yuan for urban infrastructure in 2011-15', 13 May 2010)
China will also invest heavily on transportation, and may invest CNY3 trillion on railway construction during the next five year, and according to the airport development plan, by 2020 China will have 244 civil airports. (Source: Dow Jones Newswire)
By 2015, 36 large and medium sized cities will have sewer systems covering 100 per cent of urban area with sewerage collection and treatment rate reaching over 85 per cent. All cities will safely handle domestic wastes with non-hazardous treatment rate over 85 per cent.
In the energy and utilities sectors, the focus will be on efficiency and low carbon generation, with nuclear and renewable featuring strongly in the projects pipeline. Power grid will be further developed with an estimated investment of CNY17 billion on smart grid construction during the 12th Five-Year Plan. (Source: APCO Worldwide, China's 12th Five-Year Plan, 10 December 2010)
In the housing sector, the government has pledged the construction of another 50 million low cost housing units. While this will drive construction, the plan remains unclear in terms of allocations between the central and state governments and implementation.
The west regional infrastructure development will have investment in many projects including railway, highway, rural irrigation and other utility development.
There are several sources of funding for projects:
- Central government budget
- National bond
- Loans from multilateral funding agencies, such as the World Bank, Asian Development Bank and Japan Bank for International Cooperation
- Local government budget
- Private investment
There are increasing openings for Australian exporters and investors in the infrastructure sector. Many of these opportunities will be in China’s more underdeveloped western region, which covers 10 provinces and 56 per cent of China’s land mass.
Opportunities for Australian businesses include:
- Transportation (eg. highways, high speed trains, urban metro systems, etc)
- Gas pipeline design, construction and management
- Natural gas reticulation projects
- Renewable energy and smart grid systems
- Air navigation systems and airport construction services
- Ports construction and management
- Environmental (eg. wastewater treatment, surface water management, air pollution control, etc)