China National Building Materials (CNBM) - March 2016

With cement production capacity continuing to rise, China’s cement producers, such as China National Building Materials (CBNM), are be hoping for a revival in demand on the back of any new infrastructure projects.

China’s National Development and Reform Commission has confirmed the approval of 15 new investment projects this month worth CNY34.1bn (US$5.3bn). The announcement forms part of an overall pledge to increase investment in infrastructure and public services following 10.2 per cent YoY growth in fixed asset investment over the first two months of 2016, compared to the 8.2 per cent rate seen in December. This is believed to be largely driven by the property sector, which has recently expanded by three per cent YoY.

According to the country’s State Information Center, infrastructure construction projects will be one of the main economic drivers in the immediate future in China as they provide incentives for local governments seeking returns in the short-term yet benefitting the economy in the long-term. Since 2014 more than CNY5.3trn has been injected into industrial and public service development projects with CNY1.59trn committed to information and energy networks and a further CNY1.22trn spent on transportation systems.