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Inside China 20 November 2025

From rebar to robots

Jeremy Stevens

  • The macro and policy playbook. 15th Five-Year Plan quietly drops ‘deleveraging’; it prioritises tech, pensions, green electrons – not another concrete binge. Infrastructure investment has already turned negative in real terms for this year; it continues losing momentum – and faces unhelpful base effects.
  • Local-government are still adjusting to slowing land-centric construction. Hidden debt still looms large; interest bills are now 18% of fiscal revenue; land-sale proceeds are down 40% from 2021 peak. Swap facilities and bond quota hikes buy time. Tightened financial regulations means there is less cash to co-finance new metros, roads, and/or dams. This freezes project pipelines.
  • Cash flow challenges intersect with pipeline fatigue and infrastructure saturation. Express-way density exceeds US coastal averages, metro km per capita already exceeds the EU median. Project returns are below real funding cost. Granted, macro planners do look beyond future cash flows of projects and evaluate projects on the multiplier effect these projects have on local economies - jobs, income and wages – but the marginal yuan of infrastructure capex now has less impact than before, forcing Beijing to mothball infrastructure approvals.
  • Clean-tech and AI are the fastest-growing components of capex – but their commodity tonnage is small. In bulk-commodity tonnes, the green-tech surge merely cushions the decline, but it used 63mt of steel in 2024 whereas real estate and infrastructure used 295mt and 187mt, respectively. The implication is a likely structural flattening for iron ore, met-coal and cement demand – even as copper, aluminium and nickel enjoy a demand kicker, offsetting the slowdown in yuan, but not in tonnage.
  • Once booth the twin pillars of Chinese demand (real estate and traditional infrastructure) have peaked, the marginal tonnes of steel, cement or copper are no longer cast into slabs and skyscrapers; instead, this is wired into solar farms, EV chargers, and data centres – flipping the commodity playbook from bulk volume to electron-grade quality. This then leaves exporters of iron ore and/or met-coal facing a structural downhill.
  • Commodity rotation reflected in demand forecasts. Bulk demand past peak: cement –1.7% CAGR 24-30, steel -2.0%, coking coal -3.1%. Electron metals compounding: aluminium +2.2%, zinc +1.8%, copper +3.7%, nickel +5.8% CAGR to 2030. New-energy share of copper demand 38% by 2030 (vs 15% today); nickel battery slice 37% (vs 28%).
  • The impact for Africa is already obvious. China imports from Africa flat, at USD120bn; 5-yr growth low single digits vs 30% in 2000s. DRC is the exception: refined copper cathode exports to China USD14.5bn 2024 (18% of total Africa sales). For bulk commodities, this means a structural flattening; for conductive and energy-transition metals, it guarantees mid-single-digit compounding well into the next decade. The window is open for African suppliers to integrate into EV-battery, solar-frame, UHV-wire supply chains. However, this the opportunity closes gradually as China moves more of its processing onshore. African suppliers must choose: remain tethered to the oscillating pulse of Chinese rebar sentiment, or reposition upstream into the kilowatt-hour supply chain where China’s import growth now resides.  
 

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