Chinese construction firms in reform

Abstract

Since the economic reforms that began 20 years ago, and especially with the enterprise reforms in recent years, ownership of Chinese construction firms has evolved from traditional state and collective ownership towards a mixed economy characterised by diversified ownership forms. Based on a questionnaire survey and personal interviews with individuals from firms representing four types of ownership, it has been determined that the majority of Chinese construction firms have already embraced commercial objectives and behaviour patterns similar to those of typical firms in developed market economies. Nevertheless, despite the important progress that the reforms have made, this study indicated that various construction firms during this transition are suffering serious difficulties caused by the former planned system and underdeveloped market mechanisms. Unfair practices were found to be quite serious in the construction market. Major problems stem from clients' abnormal behaviour in forcing the price down, asking contractors to finance a project wholly or partially during its construction, and delays in payment; these actions have caused severe financial difficulties to Chinese firms and seriously disrupted the normal order of market stability.China, Chinese construction firms, reform, firm objective, firm behaviour, ownership form,

ICT Implementation of Small- and Medium-Sized Construction Enterprises: Organizational Characteristics, Driving Forces, and Value Perceptions

“…Although SMEs only create about 50% of the total output, almost all the physical aspects of construction are delivered by SMEs, while large-scale enterprises are only responsible for management. Unequal practices, diversified ownership structures, strong regionalism, and a low degree of specialization have led SMEs to make survival the primary motivation for all their actions, while having no ambition to innovate and develop [29,36]. Take BIM technology as an example, at present, 72% of SMEs in China do not use BIM or are not even familiar with BIM [35].…”

International Competitiveness of ChinaÕs Construction Firms

“…In the 1950s, the Chinese government was able to secure agreements with developing countries and consequently send its state-owned contractors to complete non-profit construction projects, based on agreements between the Chinese government and the host government (Pheng and Jiang, 2003;Low and Jiang, 2003). These contractors turned over all revenue to the state and their only objective was to satisfy the target plan (Ma, 1999;Wang, et al, 2006).…”

“…These firms evolved gradually from initial state-owned status to commercial entities (Low and Jiang, 2013). This transformation led to considerable success in increasing construction productivity (Wang et al, 2006).…”

Response strategies to the competition in the Chinese construction market

“…For instance, better technical ability is an effective strategy for foreign contractors to adopt in China . The study by Wang et al (2006) shows other common competitive strategies adopted by contractors in China, including offering a low price, improving construction quality, developing relationships with government, advertising and carrying out technological innovation. Other studies have further pinpointed the strategies of diversification, partnering, joint ventures and total quality management for improving contractors' competitiveness in the Chinese construction market (Gale and Luo, 2004;Lai et al, 2004;Cheah et al, 2007).…”