China's Premier Li Keqiang says updating China's outdated underground pipeline systems is a high priority, signaling opportunities for pipe manufacturers and their suppliers.
Earlier his week, Li told a State Council executive meeting it is “urgent to accelerate the construction of underground pipelines,” according to a release by the State Council.
He acknowledged that existing systems are ineffective.
“A rainstorm could easily cause ‘a sea' of flooding in cities, even the major ones… The construction of underground utilities is seriously lagging behind,” he said.
The State Council defines the project as a “corridor-like underground infrastructure for the installation of power, water, heating, telecommunications, gas and other systems.”
China's state media have quoted experts estimate of required investment of 400 billion yuan ($64.4 billion) to 500 billion yuan ($80.5 billion) for the project.
Interestingly, the government is encouraging the private sector to participate in funding the project through franchising, and is promising subsidies and discount loans.
Industry analysts said they expect the pipe industry (including plastics) to receive a major boost of demand from the government initiative. I can see benefits for the cable industry as well.