Construction Practice in China Essay

Construction pattern in China


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Chinese economic system has experienced rapid growing since the acceptance of the unfastened door policy in the yesteryear over 20 old ages. Real estate and building, which act as a nucleus industry in mainland China, developed rapidly every bit good. Quality professional services in the country of existent estate development and building is one of four chief industries in Hong Kong which is internationally renowned. Since the Central Government of China has continually introduced policies like the sign language of CEPA to excite economic growing, the existent estate market will din in the coming decennaries. The Hong Kong professionals in the field of existent estate and building industry should take these chances to research mainland China market to give full drama to their advantage of the ability to unite economic and fiscal rules with undertaking direction and building engineering.

The aim of this paper is to gauge the market chances for Hong Kong professionals in the countries of existent estate, edifice and building audience in Mainland China. This paper will analysis the market environment utilizing SWOT method and give some suggestions to the clients while they are doing strategic direction program.


China, the universe ‘s 2nd largest economic system, enlarge their demands for professional consultancy services in the field of existent estate and building market which including existent estate, surveying, planning, undertaking finance, development, edifice and building after entree World Trade Organization ( WTO ) .

In the interim, the competition forms of China ‘s building industry have been officially changed since China became a member of WTO. These alterations comprise three positions. The first 1 is the turning foreign competitions in the Chinese building industry. Second is the increasing participants of native building houses in the world-wide building market. The 3rd one is alterations of building market environment by imagining China ‘s WTO committednesss. The execution of the WTO model raised the degree of legal enforcement in the building industry which means a speedy response to the alterations is indispensable for Chinese contractors in developing their competitory advantage. This addition the Numberss of professionals and advisers who are intend to use their concern in mainland China with their alone penetration and professional advantages. Hong Kong professionals and advisers are familiar with western Torahs every bit good as both eastern and western civilization, they can take their advantages in this peculiar opportunity. Furthermore, Hong Kong existent estate and building industry is a developed and competitory field, explore mainland market can let go of some competitory force per unit area during procedure of endowment end product.

Market environment in Mainland China

The demand on the building industry is closely related to the national fixed capital building investing graduated table, which has been increasing quickly along with the country’ s economic growing. The growing can be seen in the chart below and we can reason that the fixed plus investing will increase continually in the coming old ages as China still define building as a pillar industry.

Although China accepts open-door policy and some economic invention to develop the state, mainland China market still keep its alone characteristic as utilizations Centrally controlled system. The hierarchy in China is excessively complicated that the Joint Ventures have troubles in developing concern in China ( Walker, 1991 ) .

China Background Information

•Nature of work


•Human resources

•Management accomplishments

•Technical / Financing ability

•Organisation construction

•Social influence ( CSR ) China-related factors

•Qualification in China

•Business coverage

•Public relation

There are many types of Joint Ventures in China Mainland, viz. , equity joint ventures, co-operative ventures, compensation trade and entirely foreign owned ventures. China uses this manner to develop for many grounds:

1 ) The investors bring the professionals and advanced equipments which lending to rapid development

2 ) China can salvage a batch of money of the building development

3 ) The modern building methods have been brought into China

To sum up, China welcomes international and competitory investors like the developers of Hong Kong to hold concern in China Mainland and if the company does non cognize excessively much about China or it has no making of building work in China, it should co-operate with local authorities or local companies and this is chief portion of the paper.

Designation of concern aim

As a Hong Kong developer needs to get down concern in mainland China, foremost of all, the aims must be confirmed in the initial phase:


1 ) Qualification of building in China Mainland

Since the company does non hold any makings of building work in China, it must co-operated with the authorities or some local houses, the best scheme is to hold long term partnership with one company which possesses relevant makings, so when there is a new building undertaking, less clip is needed for acquiring government’s blessings.

2 ) Expend the repute in mainland China

3 ) Business extension

The company is still in the development phase and intends to busy portion of the market in chief metropoliss of China.

SWOT appraisal for the concern development

SW ( Strengths and Weaknesses )

Good undertaking direction accomplishments –Hong Kong developers are equipped with mature undertaking direction cyberspace system. Project workshop like undertaking procedure direction, hazard direction are increase their direction ability in a big extent.

Better information direction installation –Hong Kong has new information and engineering and these go the advantages when developing concern in China Mainland, e.g. , the cyclical and sustainable system are widely applied to different Fieldss of building work in Hong Kong ( Lam, et al. , 2010 ) . Furthermore, the communicating systems including undertaking direction system and concern disposal system make certain the procedure and tie between different parties proceed efficaciously and swimmingly. The usage of edifice information mold ( BIM ) besides better effectivity of building patterns.

Advanced machinery and equipment –T

Higher labor productivenessIn general, labour productiveness growing increases the capacity of the economic system as more end products could be generated from any given sum of labor inputs, thereby enabling the economic system to spread out at a faster gait. In the instance of Hong Kong, a metropolis with limited natural resources every bit good as modest population growing, the continued sweetening in labour productiveness is peculiarly critical for rendering growing drift to back up a sustainable and healthy economic development. Furthermore, Hong Kong labour own a good repute in high productiveness as they are acute on bettering their life criterions continually.

Good finance-raising ability –Compared with local developers, Hong Kong developers own more comprehensive finance raising method which including RIETS, foreign loan and bonds, securities or even raise the money from their parent companies. Base on the statistic one-year book of China, for the native developers, there are over 80 per centums of financess for belongings development merely comes from direct and indirect bank loans. This factors besides illustrate that Hong Kong developers are easier to diversified their invest hazard through uniting different beginnings of investing sum.

Good cost control ability –the utilize of modern information installations guarantee Hong Kong developers control undertaking cost better than local companies. The cost control system bring forth a higher net income and supervise the building cost during project life rhythm.

Attraction to good human resources –Hong Kong authorities pays great attending to the quality of the building worker and directors, take the Construction Industry Training Authority ( CITA ) which was established in September 1975 with an amendment in 1991 ( Rowlinson and Walker, 1995 ) as a illustration, CITA offers preparations and helps to the 1s who are in the building field or will come in in the close hereafter and it level up the quality of the staff, moreover, legion professional from western universe come to Hong Kong which is besides contributes to the high quality building design and physique.

Higher production costsIncreasing production costs on the Chinese mainland will eating into thin net income borders for Hong Kong developers decidedly. Demographic dividend in China is cut down twenty-four hours by twenty-four hours and developers are confronting manpower deficit every bit good.

Limited channels for market information –Although the internet smaller the universe and it seems that all the information can be found from it, really, in China Mainland some existent information of the market will be to some grade blocked by the authorities, so some depression parts can non be clearly found and there would be more hazards when holding building undertakings in China.

Lower concerns making, –Nothing can be done if the developer of Hong Kong has no makings of holding building work in China Mainland, such as safety making, building making and some land acquisition jobs. Every topographic point has its ain guideline of design and physique, and the developer who wants to hold concern in China should larn relevant jurisprudence and ordinance, if something is done over China’s jurisprudence and ordinance, the undertaking can non acquire the cast from the authorization section even though the undertaking is in the concluding phase.

Limited concerns relationshipOne of the most of import things of holding concern in China is the relationship with China’s authorities, it is really common for China’s authorities to delegate undertakings to the companies they have good relationship with, even in the tendering, both repute of a company and the relation with authorities are of import, in short, without government’s aid, the undertaking can non be approved in the initial measure.

Leung, Chan and Chong ( 2010 ) besides mentioned that dealingss meant a batch in China, people in the building industry should hold good dealingss with friends in the society, particularly the 1s within building organisations. Zhang ( 2011 ) besides illustrated that in China, prior to the beginning of building work, the company must use to the Planning Bureau and obtain a Construction Planning Permit, so to construct up good dealingss with the local Planning Bureau is really of import.

OT ( Opportunities and Threats )

Improved policy environment for foreign concern –The policies published by China authorities stated that they would go on to better economic system environment to pull foreign concerns such as the accession to the WTO and sign language of CEPA.

Government publicity of buildingThe 12th Five-Year Plan which begins in the twelvemonth 2011 set the mission that the whole societal fixed assets investing on building industry must turn more than 15 % every twelvemonth. This is a strong grounds that Chinese authorities want to cement the pillar industry position of building industry which besides strengthen assurance of Hong Kong developers to research their concern in mainland China.

constitution of recognition system – China will advance the constitution of a countrywide societal recognition system comprehensively in the following five old ages, or the 12th Five-Year Plan period ( 2011-2015 ) . The China ‘s State Council stated that the state will speed up statute law and ordinance betterment refering the recognition system and force frontward the building of recognition systems within industries and authorities sections, and at local degrees. The authorities will besides give their head to do certain the recognition system be shared in the countrywide, develop recognition evaluation bureaus and promote usage of recognition merchandises in an orderly manner. Meanwhile, the authorities should heighten its ain credibleness by increasing transparence, and strengthen instruction on societal honestness.

development of apprehension of international pattern

certain limitations on foreign investing– China uses jurisprudence to curtail the foreign investors in China, e.g. China welcomes the investors who hold advanced engineering and can better the life environment of China, can supply international degree merchandises, etc. , so China’s authorities would pass a batch of clip to measure whether the investor is suited or non.

increasing intense competition– The unfastened door policy creates chances for many foreign companies to come in China’s immense market which increase the competition among companies.

the hazard of transgressing contracts.

Reappraisal of the feasibleness

After the SWOT analysis, it is necessary to reevaluate based on the advantages and the disadvantages.


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