This is a best prospect industry sector for this country. Includes a market overview and trade data.
Design and Construction Services Sector
According to the Fitch Solutions Infrastructure Report, China is the world’s largest construction market and is forecasted to grow at an annual average of 8.6% between 2022 and 2030. However, it is also highly leveraged and the government is implementing policies to wean the economy off its dependence on land sales. At the same time, an aging population and general economic slowdown is impacting the sector.
China’s 14th Five-Year Plan includes government-driven efforts to apply digital technology to the construction and building process. In infrastructure, the central government is expected to focus on transportation and energy, emphasizing increasing connectivity within city clusters. As China develops a greener economy, there will be increased opportunities in low-carbon construction, including green buildings, renewable energy, and water conservation.
China’s urbanization rate is among the highest in the world. Data from the American Institute of Architects (AIA) Shanghai reports that by 2025, China will have constructed the equivalent of 10 New York-sized cities since the 1990s. According to the Chinese-language report, Market Status and Trends of China’s Architectural Design Industry in 2020, architectural design and engineering industry revenue in China surpassed $1 trillion in 2019.
Under China’s 14th Five-Year Plan, the Ministry of Housing and Urban-Rural Development (MOHURD) issued a notice for the Implementation of Urban Renewal Actions in 2020. While China’s urbanization rate reached 60.6% in 2019, this urban renewal policy aims to develop greener and more efficient cities as the government seeks to improve the quality of China’s urban living conditions.
Recent trends in China’s design and construction sector focus on local communities, younger residents, and culture-related projects. New super-high buildings over 500m are banned, and high buildings over 250m are restricted. New technologies also play an increasingly important role in increasing buildings’ quality and safety, such as Building Information Modeling (BIM), green building and smart city solutions, and artificial intelligence applications.
Except in rare exceptions, U.S. architectural design companies need to work with local design firms on projects in China because it is difficult to get a full architectural license. Only a few multinational companies have obtained the “Class A” license by acquiring local companies.
Benefiting from the growth of China’s construction market capacity, the demand for engineering services has increased rapidly. According to data from MOHURD, revenue generated from engineering consulting services in China, such as engineering supervision and cost consulting, will reach $26.5 billion in 2021.
Market opportunities for engineering services mainly lie in the following areas:
- Green building products and solutions
- Lighting and HVAC products
- Engineering inspection for urban infrastructure projects
- Testing services (e.g., energy efficiency evaluation, indoor air quality testing, new material, and infill testing)
- Construction quality and safety supervision services
- Engineering and consulting services for historic districts & building preservation
- Repositioning and adaptive reuse of old buildings
The challenges for U.S. firms will be increased domestic competition and the relative shortage of senior professionals. Although the Ministry of Housing and Urban-Rural Development and the Ministry of Commerce decided to abolish the Regulations on the Administration of Foreign-Invested Construction Enterprises in 2020, which improves market access for foreign firms, it is still very complicated to meet all the criteria for U.S. companies to get fully qualified without working with a local firm.
- China Refrigeration Expo 2022 – Chongqing
- China International Trade Fair for Heating, Ventilation, Air-Conditioning, Sanitation & Home Comfort Systems-Beijing
- Guangzhou International Lighting Exhibition