The Chinese construction industry is expected to expand by 4% in real terms in 2024, supported by investment in infrastructure and energy projects, according to a recently published report by GlobalData.

China is the world’s largest construction market, and its contractors, which include many of the world’s largest, are playing an increasingly active role in the Middle East projects market.

Read more: Chinese New Year for Middle East projects

The Chinese government announced its 2024 Budget in March 2024. The budget includes an expenditure of CNY28.6tn ($4tn) in 2024 – which is an increase of 3.8% compared with the 2023 Budget.

Also in March, the government announced it plans to invest CNY1.2tn ($173bn) in transport infrastructure projects by the end of this year. Furthermore, in March 2024, the Yangtze River Delta region government announced an investment of CNY140bn ($19.6bn) to develop 32 railway infrastructure projects in the region in 2024. In February 2024, the Shanghai government announced it plans to start work on 24 projects with a combined investment of CNY42.1bn ($5.8bn) in 2024.

Despite its commitment to infrastructure spending, persistent weakness in the residential construction sector and the cancellation of projects may limit the industry's output in the short to medium terms.

According to the National Bureau of Statistics (NBS), the total floor space of residential buildings under construction declined by 11.8% year-on-year (YoY) in Q1 2024, while the total floor space of residential buildings on which construction had started declined by 29.3% YoY.

The construction industry is expected to record an average annual growth rate of 3.9% between 2025 and 2028, supported by investment in the infrastructure and energy sectors, coupled with the government’s plan to achieve net-zero emissions of greenhouse gases by 2060.