China’s builders are hurting: Beijing may feel the pain

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By Brenda Goh

NANTONG, China (Reuters) – Cai Zhonghui has worked in China’s construction industry all his adult life, graduating from a laborer to owning a company with 100 workers building factories and roads around eastern China.

Cai says the industry is now facing the toughest challenges he has seen, squeezed by high materials costs, tougher regulations and tighter access to credit, making him cautious about taking on new projects.

That caution reflects a broader threat to Beijing as it looks to stimulate a slowing economy with increased infrastructure approvals: private builders – the backbone of the sector – are less willing to take projects on due to higher risks and lower profits.

“In the past, once there was an opportunity, we would rush to grab the work. But now we’re more choosy: Are we able to undertake it? Do we really want to do this? We want to lower our risks,” Cai, a wiry and sprightly 63-year-old, told Reuters at his office in the eastern Chinese city of Nantong.

Construction projects have taken longer to start and complete, due to increased environmental regulations, work suspensions and growing liquidity pressures, Cai and other industry executives told Reuters.

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