Eurasia Development Held a Webinar on “China’s Experience in Developing the Steel Construction Market”

Amid economic sanctions, it is important to make maximum use of the capabilities of domestic steel producers, which are experiencing certain difficulties in exporting their products and are seeking to increase supplies to Russian construction projects. In this context, steel construction in China is of considerable interest, particularly the role of the government in increasing the production and use of steel structures.

Konstantin Matveyenkov, Director for Sustainable Development at the Russia-China group of companies Eurasia Development, which specializes in technology transfer between Russia and China, addressed this issue. During the webinar “China’s Experience in Developing the Steel Construction Market,” held last week by the Association for the Development of Steel Construction (ARSS), he spoke in detail about the regulation of China’s steel structures market.

How the Market in China Works and Why It Is Growing

China produces more than 1 billion tonnes of steel per year, accounting for more than half of global production. At the same time, around 100 million tonnes of steel are used annually to manufacture steel structures. Despite this scale, reinforced concrete still dominates construction: the technology is well established and is often cheaper.

Nevertheless, the steel structures market is expanding. In recent years, the share of projects built using steel structures has increased several times and reached approximately 10% of newly commissioned projects. In the coming years, China plans to increase this figure to 15%. For comparison, in the United States, Japan and South Korea, the share of steel construction ranges from 20% to 40%.

An important driver is structural change within the industry. The Chinese market remains decentralized: there are many small and medium-sized companies, while the share of the largest players remains relatively small. However, consolidation is underway: large manufacturers are acquiring smaller companies, strengthening control over the supply chain and changing their business models — moving from simply manufacturing steel structures to acting as general contractors and offering customers integrated solutions.

Another area with growth potential is residential construction. As in Russia, steel structures in China are more commonly used in industrial and public construction, such as schools and hospitals, while their share in residential construction remains limited and is mainly associated with high-rise buildings.

The Role of the Government in Industry DevelopmentGovernment interest in steel construction in China has increased since the early 2000s. The reasons include rising labor costs and requirements related to energy efficiency and environmental standards.

Since 2013, prefabricated construction has been included in national plans, followed by documents regulating and stimulating the industry’s development. One example is the 2017 plan for the development of prefabricated construction, which considered reinforced concrete and timber alongside steel. Pilot programs were launched to develop the market: around 500 demonstration projects were implemented in 50 cities.

Another feature of the industry’s development in China is the active role played by regions and municipalities. National initiatives are translated to the local level, where more specific and up-to-date measures are often introduced. According to Eurasia Development, between 2010 and 2020, Chinese provinces adopted 443 documents aimed at developing steel construction. The industry receives particularly active support in earthquake-prone regions, where steel buildings are valued for their greater structural resilience.

China’s Experience as a Source of New Opportunities for Russia’s Steel Construction Industry

Konstantin Matveyenkov notes that China, like Russia, continues to search for the optimal model for expanding steel construction, but has advanced further in developing its system of government support. This experience could be useful for Russia: measures are needed that simultaneously address regulation, the production and sales chain, and demand for buildings using steel structures. This is not about a single solution, but rather a set of economic, infrastructure and information tools.

Particular emphasis was placed on the need to involve different government agencies with the necessary resources and authority, as well as regional authorities, in the development and implementation of such measures. China demonstrates that activity at the local level can quickly create industry leaders and launch practical projects.

Financial incentives are also important, including subsidies, preferential lending and other measures that reduce the cost of switching from cheaper reinforced concrete to steel solutions and make them more understandable and attractive to developers and investors. In China, preferential mortgages for housing built using steel structures also play a noticeable role in supporting demand.

When promoting steel construction, Konstantin Matveyenkov recommends linking its advantages with the green agenda and simplifying access to green finance and certification. Support for R&D and the technical base is also necessary: stimulating research, standardization, unified rules and databases, as well as workforce development through specialized university programs and professional training.

Thus, steel construction in China is a promising and rapidly growing industry. Eurasia Development helps companies and industry partners apply China’s best practices in the Russian context — from market analysis to partner selection and building cooperation with Chinese manufacturers.

If you are looking to expand the use of steel structures in your projects, reduce implementation barriers and identify a sustainable construction model, Eurasia Development specialists are ready to assist.

Read the full description of the webinar on the Stroitelnaya Gazeta website.
The full recording of the webinar is available via this link.