The recent news over the falling share prices around the world due to Chinese economic instability is of major concern for the construction sector. The knock-on effect of a downturn and economic instability in China has impacted around the world, with stock markets in Europe and the US having taken a tumble.
This development should not be a surprise however. It is a situation that has been coming for some time due to the high level of spending in China and which many in the construction industry have been aware of as a potential risk.
China is a crucial market for construction equipment manufacturers in the US, Europe, South Korea and Japan. Its massive infrastructure investment in recent years has fuelled demand for construction machines both from local firms and for importers.
The downturn in demand for machines was first seen in China some years ago and has continued. Precisely what will happen next is unclear. The Chinese Government has a tight handle on the country’s economic performance, but how the situation will be managed remains to be seen.
Clearly, China retains its need for further infrastructure investment. How the Chinese Government will fund that investment will be revealed in due course. It is possible that some future projects may even be funded from private sources.
What is of interest too is how Chinese funding of infrastructure projects in developing countries is continuing. This is particularly apparent in a number of African countries, while there is also some Chinese investment into parts of Asia, such as Indonesia.
The Chinese Government has been keen to develop the country’s economy through developing infrastructure. Having followed a lead set by the US with the development of the Interstate system, it is widely apparent that transport infrastructure plays a crucial role in the economy of any country. This is a lesson that has to be relearned in the US and Europe in particular. Both politicians and the general public alike are becoming highly complacent as to the value of transport infrastructure and are seemingly unaware of the desperate need for massive investment in expanding networks as well as repairs and maintenance.
This development should not be a surprise however. It is a situation that has been coming for some time due to the high level of spending in China and which many in the construction industry have been aware of as a potential risk.
China is a crucial market for construction equipment manufacturers in the US, Europe, South Korea and Japan. Its massive infrastructure investment in recent years has fuelled demand for construction machines both from local firms and for importers.
The downturn in demand for machines was first seen in China some years ago and has continued. Precisely what will happen next is unclear. The Chinese Government has a tight handle on the country’s economic performance, but how the situation will be managed remains to be seen.
Clearly, China retains its need for further infrastructure investment. How the Chinese Government will fund that investment will be revealed in due course. It is possible that some future projects may even be funded from private sources.
What is of interest too is how Chinese funding of infrastructure projects in developing countries is continuing. This is particularly apparent in a number of African countries, while there is also some Chinese investment into parts of Asia, such as Indonesia.
The Chinese Government has been keen to develop the country’s economy through developing infrastructure. Having followed a lead set by the US with the development of the Interstate system, it is widely apparent that transport infrastructure plays a crucial role in the economy of any country. This is a lesson that has to be relearned in the US and Europe in particular. Both politicians and the general public alike are becoming highly complacent as to the value of transport infrastructure and are seemingly unaware of the desperate need for massive investment in expanding networks as well as repairs and maintenance.
