Housing challenges of China's urban explosion
While China is world's largest construction market and cities expand rapidly, the supply of social housing could become a major problem
Tomorrow's world will be an increasingly urbanised one, with the volume of global construction output set to grow by 70 per cent to US$15 trillion by 2025. And China will be one of three countries making up the majority of that increase.
A study from Global Construction Perspectives and Oxford Economics shows that, along with India and the United States, China will contribute to almost 60 per cent of the growth.
Since overtaking the US as the world's largest construction market in 2010, China now accounts for 18 per cent of total global construction, and by 2025 it is forecast this share will have jumped to more than a quarter.
While on the surface the numbers are positive, the economic outlook is looking less robust than previously expected, with investment subdued and trade flows, particularly in Asia, weaker than expected.
Beijing is committed to rebalancing the economy towards higher consumption and accepting a slower rate of growth. Nonetheless, we forecast that GDP growth will, in the short term, be supported by a more stimulatory fiscal policy and generally loose monetary conditions.
The rising middle class will underpin strong consumer spending as the number of Chinese households with incomes over US$30,000 a year increases by nearly 20-fold over the coming decade. Overall, we expect GDP growth to moderate in the next 10 years and average 7.1 per cent over the forecast period as a whole. But what does this look like day to day?