Asia's infrastructure market close to $5.3t by 2025

Asia's infrastructure market is going to grow by 7 to 8 percent annually over the next decade, nearing $5.3 trillion by 2025, or 60 percent of the world's total, a report from PwC showed on Wednesday.

China, with an estimated market value of $2.65 trillion, offers the biggest opportunity for international capital, said Mark Rathbone, the Asia Pacific Capital Projects & Infrastructure Leader, PwC Singapore.

However, Rathbone said China's regulatory frameworks, business modes and ownership restriction in sectors like power and water, make it harder for international owners to enter China.

Another thing that hinders international capital from coming to China is language. Also, international players must think about how to compete with Chinese local construction companies.

"Even if a company is big enough in its own country, it will appear really small when it comes to China and competes with local companies," he said.

"So, yes, China remains a key focus for a lot of international players, but there are still many concerns," he concluded.

PwC also predicts that in terms of infrastructure spending, Asia's share is set to grow from 30 percent in 2012 to 40 percent in 2018, and 48 percent by 2025, largely driven by China.

In recent years, more Chinese construction companies have been competing in the international market, such as in Southeast Asia.

Compared with Japan and South Korea, which have been investing in Southeast Asia for a longer time and have more experience, China is starting from a less experienced base but is catching up very quickly, Rathbone said.

"And Chinese banks and financial institutions need to get behind those construction companies and help them to invest like their South Korean and Japanese counterparts have done," he said.

"For example, if a Chinese construction company is building a bridge or a road in Indonesia, they need to get commercial banks like ICBI and China Development Bank behind the project," he said.

Rathbone also pointed out that China should understand how to approach the international market.

"You cannot simply take Chinese solutions to Indonesia, Africa, or South America. You need to understand the local economy, local laws and local requirements. You should look at how to address local requirements in your own infrastructure business," he said.

"Chinese empathy for local governments is very important," he said.

To invest in other countries like those in Southeast Asia, "it's not just about solution, financing, and construction; you have to make sure that you really hit the economic objectives of the local government," he said.