This week, CemNet reported that China's cement demand fell eight per cent YoY in 2024 to 1858.9Mt. Capacity utilisation has slipped to 50 per cent, while cement production in the country fell 9.8 per cent YoY in 2024, according to the National Bureau of Statistics (NBS). The signals are that this trend is likely to continue and Chinese cement producers are looking for overseas markets as the country faces a downturn in the housing sector.
Residential downturn
The housing slump has been significant. An oversupply of houses has caused prices to hit the floor in many Chinese cities. In October 2024 Ni Hong, minister of China’s Housing and Urban-Rural Development, said the ‘white list’ of housing projects for financing and increased bank lending for such developments would reach US$562bn by the end of 2024. As of last summer, banks had approved 5392 projects, with financing reaching nearly CNY1.4trn (US$192.5bn). Approved loans totalled CNY2.23trn as of 16 October 2025. It was anticipated that the “bottoming out of the property market has begun,” added Ni Hong.
Goldman Sach's analysts estimate that, "the scale of China’s unsold housing inventory would amount to approximately CNY93trn (US$13trn) if it were fully built". Meanwhile, approximately CNY9trn in property sales was estimated to be constructed in 2024, according to Goldman Sachs Research (GSR). The research house believes the government measures in October 2024, which included CNY200bn in lending support for state-owned enterprises to buy completed but unsold housing inventory, fell short of the mark. The supply of saleable housing inventory was estimated by the GSR to be equal to more than two years of demand at the end of 2024.
December’s data from the NBS indicates that there is still further to go before China starts to see an uptick in construction. Furthermore, data from the China Index Academy shows substantial slides in January 2025. The average price per square meter for existing homes fell seven per cent YoY, while sales by the top 100 developers dropped nearly 17 per cent.
Without additional stimulus, Yi Wang head researcher at GSR said the housing downturn could last another three years. The research house indicates that a further stimulus of CNY8trn could be needed to clear the construction backlog and restructure debt.
In the meantime, infrastructure development has seen a boost with the announcement of a project for the world's largest hydroelectric dam on the Yarlung Tsangpo river. The dam is expected to provide three times the energy supplied by the Three Gorges Dam, currently the world's largest hydropower plant. The project could cost CNY127bn, according to estimates by the Chongyi Water Resources.
Overseas construction likely to see upturn
With the housing sector at low ebb, Chinese construction companies are already looking at more lucrative projects abroad. Infrastructure building in Vietnam is proving attractive and a high-speed rail link between China and Vietnam is particularly of interest. The high-speed rail project and metro networks in Hanoi and Ho Chi Minh City are highlighted as priority projects by China Communications Construction Co (CCCC). Construction on the 1500km high-speed rail link between the northern and southern region sections has begun and is expected to be completed in 2026-27, and the whole project should be completed by 2035.
In addition, President Trump’s freezing of the United States Agency for International Development (USAID) could further stimulate Chinese investment in overseas infrastructure projects to fill the vacuum. Bangladesh is a key target for the Chinese to ply with more loans and infrastructure projects under the Belt and Road Initiative (BRI). In 2023 Chinese officials announced that 150 countries were involved in the BRI with China’s trade with participating countries exceeding 50 per cent of its total for the first time in 2024.