Reform Agenda of Chinese Construction Industry

Abstract

For many years the construction industry in China has been controlled by the government and used to support China's centrally planned economy. Most construction projects have been financed by the government, designed by state-owned design institutes, and built by state-owned construction companies. This bureaucratic system, combined with the poor project-management skills of the enterprises, has resulted in low-quality work, cost overruns, and the late completion of projects. Since 1979, China has been reforming the country's economy. Construction industry reforms were announced at the Chinese Party Congress Convention in October 1992. These reforms are designed to improve efficiency in the state-owned construction enterprise, to establish a construction market, and to make the Chinese construction firms more competitive with international firms. This paper presents a discussion of the Chinese reform agenda for the overall Chinese economy, and for the Chinese construction industry specifically. It also describes the reform agenda of the Chinese construction industry for the rest of the 1990s, and questions if the Chinese government will be able to meet those goals.