Building a future for all: China and smart construction

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Digital technology is helping to transform every industry, and construction is an area that has reaped multiple benefits. What technologies are playing major parts in the transformation of this very traditional industry?

China’s rapidly growing population and increasing urbanization have put pressure on the construction industry to work faster and build new, modern buildings more quickly. Things have changed in China, though, and traditional building methods are no longer enough to keep pace with the speed of change: construction has changed around the world, building tenants have become more expectant and construction companies are always under pressure to maximize resources and reduce costs. In China’s “new” economy, making buildings smarter, improving sustainability and improving building tenant experience are all priorities.

Where is China’s construction industry today?

In relatively healthy shape overall. China’s construction industry has undergone major growth since the government implemented reforms and opening-up policies back in 1978, with the construction industry growing in value from 13.9 billion yuan in 1978 to a massive 5.57 trillion yuan, around US$816.6 billion, by 2017. This equates to an average annual growth rate of 16.6 percent and comprised about 6.7 percent of China’s GDP in 2017.

What technologies are playing a part?

China’s rapid construction industry growth has leveraged various digital technologies, including Internet of Things (IoT) and, significantly, Building Information Modeling (BIM). Solutions like these are designed to give construction companies greater insight than before and to enable them to plan, design, construct and manage new buildings and infrastructure more efficiently than ever.

The concept of the smart building has been around for a while, but advances in digital technologies have made it a reality. BIM enables construction companies to pull together all kinds of data within a building, from environmental information to resident usage habits, analyze it all and then use it to drive efficiencies and improve building operations. It makes planning easier and gives construction companies and building owners greater control, meaning they can maximize resources, and pre-emptive analysis also helps anticipate potential problems, thereby enhancing workflow.

Research has found that China is really buying into BIM: Dodge Data & Analytics reported that China ranked among the top five fastest-growing BIM territories in the world between 2015 and 2017, trailing behind only the UK, South Korea and Australia, with 108 percent growth of Chinese construction companies doing more than 30 percent of their work in BIM.

In addition to this, industry research has also found that smart construction equipment enables tangible, measurable benefits: according to PwC, construction companies can create a 10 percent improvement in fuel utilization and a 43 percent reduction in fuel costs by using smart construction tools.

The importance of IoT

IoT technologies can offer big potential benefits to China’s construction companies. Smart buildings employ IoT tools throughout, from temperature sensors and climate monitoring tools to security and surveillance systems.

China has become the world’s fastest growing country in IoT, with IDC forecasting that China's IoT spending will reach $300 billion by 2022 – around a quarter of the world's total. In construction, IoT offerings are perfectly suited to helping companies achieve regulatory compliance, improve cost management and make buildings more attractive to potential tenants.

Use cases that highlight the benefits of IoT solutions and apps in smart buildings include delivering on energy efficiency targets by using sensors in the building, supported by data analytics to make better use of resources. Similarly, automated systems in smart buildings are now leveraging machine learning and predictive analytics to drive still further efficiencies. According to IoT Analytics, of 1,600 enterprise IoT projects in progress in Europe during 2018, the most common business sectors were smart cities, with 23 percent, connected industry with 17 percent and connected buildings with 12 percent. It will be interesting to see if China follows this trend and commits as much to smart construction initiatives.

The need for smart construction

In the next 10 years, urban areas in China are set to see an influx of more than 250 million people; to manage such rapid urbanization, Chinese construction expenditures are forecast to grow by 7.8 percent per year through the end of 2019 and beyond.

Smart buildings and digital construction are today seen as an economic engine for China, and the government has set an environmental goal of 30 percent green buildings for new construction by 2020. The smart buildings sector is growing fast globally: it was valued at around $5.8 billion in 2016 and is expected to reach approximately $62 billion by 2024, at a CAGR of around 34 percent, according to a report from Zion Market Research. China is committed to being at the center of that growth.

 

To read more about how construction companies can use digital technologies to innovate and stay competitive, read this PwC white paper: Building Smart: How Digital Technology Can Help Construction Companies Achieve More Value.

 

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Jack Zhang
Jack Zhang
Jack Zhang is Country Manager, China for Orange Business Services, and is responsible for leading the business and managing operations country-wide. He supports the Orange digital transformation vision for enterprises by developing opportunities in key growth areas including hybrid networks, IT services and cloud.  Jack has over 15 years of experience in the dynamic IT and telecommunications market in China and has a deep understanding of the market and the communications industry.