In China, there is a surge in the construction material prices and this suggests that the stimulus measures from Beijing have been able to successfully boost the activity of building and, at the same time, they have raised the fears that the country is going to start a few more projects that are white elephant ones. The cement prices on an average in the bigger cities have seen a rise by 15% since the month of September as that ended a decline of eight months, as per the reports of a data provider. The price index for the steel bars, which are used at the time of construction, saw a gain of 12 % in the period. The aggregate price of construction has also seen a rise of approximately 10 % since the third quarter ended.
An important part of the economic expansion in China has been the construction of Infrastructure and now that the country has reported growth in the third quarter of 6% which is its slowest in the last 30 Years, Beijing has now fallen on the stimulus measures which are going to begin it again. Last month, Beijing has said that they are going to allow the local governments to issue an amount equivalent to $142 Billion in the special purpose bonds before the year ends, which is going to free the funding up by the usage of their quota for 2020. The central government is also going to lower the requirement of capital in infrastructure projects like railways, toll roads, and ports.
Experts believe that while it is going to help the economy, there are worries going to be there for wasteful expenditure.