GUANGZHOU, China (TheStreet) -- China's economy may be slowing, but the government is still going ahead with big infrastructure projects. And that's good news for U.S. and other foreign contractors.
Take, for example, the major expansion underway at Guangzhou's Baiyun Airport, the major transportation hub for factory-intensive southern China. The airport, which already covers 15 square kilometers (5.8 square miles), is building a new terminal of 595,000 square meters (6.4 million square feet), big enough for 75 million passengers per year. It will open between 2016 and 2018.
Construction of the $2.97 billion terminal should give business to U.S.-listed airlines, construction suppliers, fashion brands with airport outlets and the most specialized of airport design firms.
"To turn a design vision into an organizational reality, there is a small number of firms with the knowledge, expertise, and special skills to pull it off," said James Berkeley, managing director of the London-based management advisory service Ellice Consulting. "What we will see is an uptick in collaboration with Chinese firms -- designers, advisers, developers and construction partners."
The same pro-business trends have shaped up at other Chinese mega-airports, including a new one due to open in Beijing.
An airport staff person in charge of contracts at Baiyun said earlier in the week that bids for the new terminal had closed but that she could not release a list of winners.
Several listed companies will likely supply construction at the new terminal. In August, construction crews using Hitachi (HTHIY) equipment were digging holes on the terminal site, a moonscape covered with piles of earth and temporary worker housing. If clues from the existing terminals hold true, the new one will use lifts by Otis Elevator, a subsidiary of United Technologies (UTX) .
In another plus for foreign companies, foreign brands that make money from airport stores could sell in the new terminal. Vendors in the old terminal today include L'Occitane International (LCCTF) and Sanrio (SNROF) .
China usually picks its own companies as designers and builders of basic infrastructure. Foreign firms would find it hard to compete on cost, said Fei Kwok, partner with the Norton Rose Fulbright law firm in Shanghai.
"For basic engineering and preparation work, I think the foreign contractor has no advantage because the price is higher," she said.
But foreign contractors that install radar systems, aircraft auto-towing technology and specialized computer software may be able to outbid Chinese peers on experience, she said. Those contracts would favor firms such as Fujitsu's (FJTSY) ICL unit, which designed an integrated voice and data communications system for the nearby Hong Kong airport.
The Guangzhou airport is China's second-busiest and the world's 16th busiest airport by passenger traffic. But it faces competition from airports elsewhere in the Pearl River Delta: Hong Kong, Macao, Shenzhen and Zhuhai. If space is tight, traffic could skip Guangzhou.
Room for more passengers at the terminal-to-be would prompt airlines to add flights, most obviously helping state-run China Southern Airlines (ZNH) as well as foreign carriers that connect southern China to Southeast Asia, the Middle East and Africa.
Guangzhou's surrounding Guangdong province needs to bring people in as it tries to build up a high-tech industry that would replace lower-value traditional factory exports, the European Chamber business association in Beijing said in a July 2 position paper.
"In order to achieve this upgrade, Guangdong and the South China region as a whole need to improve upon the 'three flows': the flow of people, goods and services, and information," the paper says.