A surge in the price of construction materials in China suggests Beijing’s stimulus measures have succeeded in boosting building activity but raises fears the country could be embarking on more white elephant projects.
Average prices of cement in big cities have picked up 15 per cent since September, ending eight months of decline, according to Wind, a financial data provider. A price index for rebar — reinforcing steel bars used in construction — has gained 12 per cent over the same period. The price of construction aggregate has risen nearly 10 per cent since the end of the third quarter.
Infrastructure construction has been an important component of China’s economic expansion and — with the country reporting growth of 6 per cent in the third quarter, the slowest in 30 years — Beijing has resorted to stimulus measures to kick-start it again.