Urbanization provides new markets for building materials products

Urbanization is opening up new market opportunities for building materials and home furnishings. As part of the broader urbanization drive, the construction of a new socialist countryside is underway, where land is consolidated into larger plots and high-rise buildings are developed to encourage rural populations to live in more concentrated areas. This shift in lifestyle—rural urbanization and the modernization of rural living—has created a significant and expanding market for home improvement products. Deputy Prime Minister Li Keqiang has emphasized that urbanization is a key strategic move for China’s modernization. When he was governor of Henan Province ten years ago, he proposed the establishment of the Zhengdong New District as a model for a new approach to urban development. Looking ahead, this vision is expected to gain even more momentum and expand across more regions. In one of his writings, Li highlighted that urbanization is essentially the process of transforming farmers into city residents. This transition not only changes consumption habits but also upgrades spending patterns, unlocking vast consumer potential. With urban per capita income currently about 3.1 times that of rural residents, and urban per capita consumption similarly higher, the economic impact of integrating rural populations into cities could be substantial. Once farmers become urban citizens, their income and consumption could increase by at least threefold. The government has been pushing for better development in central and western regions, accelerating the formation of new urban clusters and creating new growth centers. This trend is reshaping the real estate and home industry landscape. Unlike the past two decades, where demand mainly came from first- and second-tier cities, the current push for urbanization and rural modernization is bringing new opportunities to third- and fourth-tier cities, as well as rural areas. More and more farmers are now buying homes and investing in home decoration. For manufacturers in the pan-home industry who have struggled over the past couple of years, this growing demand is like a golden opportunity—a huge and attractive market "pie." "The demand for urban infrastructure is rising," said Luo, a market expert. "Renewal of old cities, slum redevelopment, and the renovation of existing housing are all creating new demands for the home industry." His on-site inspections confirm these trends. Cities like Wuhan, Nanjing, Zhengzhou, and Xi’an, along with other prefecture-level cities, are experiencing rapid construction. Small towns are becoming bigger, big cities are expanding, and older neighborhoods are being renovated. Construction sites often display the slogan “100 years of history, quality first.” Home and public space renovations typically last for decades, meaning that second and even third rounds of decoration will continuously fuel the building materials market. This creates a steady and long-term demand, offering great potential for sustained growth.

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