The prolonged global economic slump has hit the construction industry particularly hard, but the Northeast Asian infrastructure market is emerging as a new growth engine. China and Russia have increased their investments in roads, ports, and power plants, thus providing new growth opportunities for infra builders. What should Korea do to take advantage of the expanding infrastructure market in Northeast Asia? Dr. Jeong Min of Hyundai Research Institute is here with us to answer that question. He first tells us why the social infrastructure market in Northeast Asia is gaining global attention.
The Northeast Asian economy, particularly in China and Russia, is expected to grow rapidly. Subsequently, demands for improvements in the living environments, increased income, population explosion, and urbanization are likely to cause the demands for infrastructure to soar. Data shows that the Chinese economy is projected to grow at an average of 8% from 2013 to 2018, and the Russian economy around 4% during the same period. Meanwhile, out of 144 countries studied, the quality of infrastructure in China and Russia ranks 69th and 100th, respectively, indicating the poor state of their economic backbones. But their rapid economic growth is expected to increase the calls for new and better facilities.
Experts project that the size of the infrastructure market in Northeast Asia, comprised mainly of China, Russia, Korea, and Japan, would grow at an annual rate of 8.1%. China and Russia’s infrastructure markets accounted for 62% of the region’s total in 2010, and are likely to expand more than 10% to 74.4% by 2020. Not only is the state of infrastructure in China and Russia inferior to those of other nations, but the two countries’ rapid population growth and urbanization are likely to lead to more demands for basic physical and organizational structures. In particular, amazing growth is expected in China’s energy sector and Russia’s transportation and energy fields.