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2008 Olympics Invigorates China's Construction Market2007/09/15
China’s construction industry grew by an annual rate of 22.5 percent during the Tenth Five-Year Plan (2001–05), generating a gross product of 4,000 billion yuan (US$520 billion and accounting for 7 percent of China’s gross domestic product (GDP), which increased by 10.7 percent in 2006. This made the Chinese construction industry one of the most active in the world and a major player in the Chinese economy, with added inspiration provided by construction for the 2008 Olympic Games. Olympic Flame Heats Up Construction Market As part of the Beijing Municipal Government’s long-held plans to revitalize Beijing, making it an international metropolis and a more comfortable and convenient place to live and work, and to satisfy the needs of the 2008 Olympic Games, infrastructural investment in China’s capital has hit a record high, with about 180 billion yuan (US$23.4 billion) being spent on Olympic sports venues such as the National Stadium, National Gymnasium, National Aquatics Center the Olympic Green and Forest Park, the Olympic Village and more. Included were Olympic Cultural projects such as the National Museum of China, the new CCTV Tower, various Beijing Subway construction projects, including a light-rail train to the Beijing Capital International Airport and its new Terminal 3. Multiple Sources of Financing Used The thriving Chinese finance market has created good conditions for finance, with listings, enterprise bonds, foreign government loans, financial leases, and franchises coming into play. These are augmented by Asian Development Bank and World Bank activities in the Chinese market. Ten Tremendous Changes in the Chinese Construction Market With the sustained vitality, Chinese construction companies are becoming more active in the international arena; a new era of internationalization has begun. 1. Internationalization of Construction Philosophies Construction philosophies are a barometer of the general construction level in a country, which also decides the advancement of construction levels. More construction company managers realize the importance of respecting construction schedules. In addition, environmental protection and energy savings are also taken into consideration in new construction and revitalization. The National Stadium (the 2008 Olympic Stadium), for instance, will employ special air intakes at the bottom of the stadium structure to improve stadium ventilation and reduce the need for air conditioning. The National Aquatics Center (Watercube), uses high-tech construction materials and designs to protect the environment and save energy; it is also mostly “self-cleaning.” Permeable bricks and mortar and many other new materials are also being used, not only for Olympic construction, but in projects across China. 2. Internationalization of Construction Laws The current Construction Law, which went into effect on March 1, 1998, is being amended, as is the country’s Energy Conservation Law. Draft amendments of these laws have been submitted to National People’s Congress (NPC). Both emphasize energy savings in construction. China’s laws governing construction and environmental protection are becoming more complex, and they are being enforced. Among these are laws and regulations concerning environment impact assessments, environmental protection acceptance checks and the indoor environmental pollution controls. 3. Internationalization of Project Management In recent years, the Ministry of Construction and the National Development and Reform Commission have advocated the use of more scientific and rational management methods, including project management and fiscal management. This has promoted the development of more professional management companies in China. Project management companies strongly supervise and advise project contractors, architects, material and equipment suppliers and supervise engineers in their relevant fields concerning project costs, quality, schedules and construction safety. The general level of project management in China has risen. 4. Internationalization of Contract Models In order to meet international construction market standards, the contract model provided by Ministry of Construction, which has adopted some of the structure and specific clauses from International Federation of Consulting Engineers (FIDIC), turns more attention to procedural specifications. FIDIC is now widely used in China as more foreign consulting companies are participating in the Chinese construction market. 5. Internationalization of Building Design Codes Traditional Chinese building design and construction technical codes must be updated to adapt to the most recent and innovative construction technologies. Insiders say that the need for building technical code renewal is urgent. It appears this is being done to some extent and new building design code amendments are expected. 6. The Internationalization of Construction Materials and Construction Techniques. Participation of foreign designers has resulted in the use of new building materials, environmentally friendly materials and new techniques in Chinese projects. Modern architectural configurations; unique structural systems; high-strength super-thick steel plates and newly developed laser-welding technologies have been used in the National Stadium’s construction. A new external curtain-wall system and membrane structure are being used for the first time in China. Respiratory double-curtain walls used in the Kaichen Plaza project are made with advanced materials which save energy and reduce greenhouse-gas emissions. 7. Internationalization of Dispute Settlement Mechanisms Arbitration is now widely used in dispute settlements, especially in the concession-mode project. However, whether arbitration or litigation is used, once commenced, the process will be long and may cause project delays. Many departments and organizations are aware of this problem, and they are seeking dispute settlement alternatives that are widely used in the international construction market. 8. Internationalization of Project Participants The vibrant Chinese construction market has not gone unnoticed by numerous elite foreign architects, construction companies, and engineering consultancies, including SOM from the United States, OMA from the Netherlands, GMP from Germany (National Museum). Ove Arup and Partners Hong Kong Limited has provided consultancies for many of the most important construction projects in Beijing, including the CCTV Tower, National Stadium and the light-railway between Dongzhimen and the Beijing Capital International Airport. As they cooperate more closely with local consultancies, project management in Beijing will be improved. 9. Chinese Construction Companies Enter Overseas Construction Markets The top-ten Chinese construction companies are getting a share of markets in Africa, the United States, Europe, Hong Kong, Macao. 10. Diversification in Project Services With the guidance of policies made by the Ministry of Construction and other departments of the Chinese Government, a group of elite construction enterprises have emerged and are expanding their traditional role as contractors. Chinese companies are diversifying their business scopes as with EPC (engineering plus construction) projects, project management, construction project and project contracting. Some of them will even own stakes in some of their projects. Some have already achieved good results. Wang Jihong , Lawyer Professional fields: Urban Infrastructure Development and Real Estate Environmental and Resource Protection Government Legal Affairs
Ms. Wang is a renowned lawyer in the field of urban infrastructure development in China. She has offered legal services to a number of national major construction projects, especially concession projects. These projects cover multiple fields, including public utilities construction projects, rail transportation projects, highway and bridge projects, energy projects and city planning projects such as CCTV New Site, The National Museum of China and the National Indoor Stadium. Tel: +86 10 5870 0886 E-mail: jwbj@jianweilawyer.com °°°° |
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