ABSTRACT
China’s construction sector is now crucial to the country’s economic development, while competition has become significant and aggressive as a result in part of the increasing and pressurizing demand for real estate. In general terms, the construction sector comprises establishments primarily engaged in the construction of buildings and other structures, additions, alterations, reconstruction, installation, maintenance, and repairs. Real estate – which encompasses land along with anything permanently affixed to the land such as buildings – and infrastructure investment, or supply facilities such as water or wastewater treatment, are also included. Three major laws regulate the construction industry in China: (1) Construction Law (Jianshe fa), promulgated on March 1, 1998; (2) Contract Law (Hetong fa), March 15, 1999; (3) Tendering and Bidding Law (Zhaotoubiao fa), January 1, 2000.1
The construction’s potential in China has become enormous as a result of economic development pressures (urbanization, infrastructure, etc.) and an increasing housing demand: according to China’s Ministry of Construction, the number of cities alone is expected to increase from 770 now to more than 1,000 over the next fifteen years. The total number of cities in China with more than 1 million inhabitants is 174, among which 11 cities are over 4 million, 22 are between 2 and 4 million, and 141 are between 1 and 2 million.2 It is estimated that between 1989 and 2001, total public investment in infrastructure had already reached 6,250 billion RMB (US$ 756 billion) with an annual investment of 481 billion RMB (US$ 58 billion) on average, i.e. an increase of 15% compared to the early 1980s.3 In fact, China’s 10th 5YP commitment was to increase investment up to US$ 120 billion for projects such as urban road construction (1.6 million km of roads, including 25,000 km for highways), new railway lines of over 7,000 km, another 140 new deep-water harbors (reaching a total of about 800), 40 million kW of electricity in the regions, with power lines of over 60,000 km, and so on.4 Apart from improving the entire motorway network in western China, the country’s “Go West” policy (xibu kaifa) called in 2002 for the construction of a 640 km railroad line from Chongqing to Huaihua (Anhui), as well as a 955 km rail connection from Xi’an (Shaanxi) to Hefei (Anhui), in addition to
a new airport in Xi’an and other similar major transportation and infrastructure projects in the area.5
