Housing was allocated directly by the government until the mid-1990s, when homeownership was first introduced. The five largest construction companies in China are 100% state owned. In 2009, they generated $21.8 billion in overseas revenue, according to the China International Contractors Association, a trade group.
Chinese contractors already do substantial business abroad, ranking sixth worldwide in terms of international business, according to the China International Contractors Association. The trade group estimates that total overseas contracting revenue will reach $50 billion by 2014, up from $21.8 billion in 2009.
Chinese construction companies are also gaining ground in Africa. As part of its strategy to gain access to overseas oil deposits, China has been offering aid packages to countries such as Nigeria and Sudan as inducements to award exploration territory to Chinese oil companies. These projects often are carried out by Chinese contractors.
In 2009, Chinese construction companies were awarded $6.3 billion in contracts in Africa. A consortium made up of Citic Group and China Railway Construction won a $7 billion contract to build a highway in Algeria in May 2010.
In December 2002, regulations set out by China’s Ministry of Construction came into force that fulfilled the country’s commitment to improving access to its domestic construction market as a condition for joining the WTO. These regulations allowed wholly foreign-owned construction and engineering companies to be established in China, though restrictions still exist as to what work they are allowed to undertake.
Prior to that, foreign companies were only approved to work in China on a project-by-project basis, and then only as part of a joint venture. The contracts must be valued at less than $12million, however, which effectively keeps the company out of most projects. In a broader move, the Ministry of Construction announced in May 2010 that all foreign and domestic companies could bid on railway projects.
Recent growth in the consumption of natural resources in China — much of which is directly related to the country’s booming construction market — is leading the government to adopt more sustainable building practices. Regulators are encouraging the country’s builders to make buildings more energy efficient and less resource intensive. The growth in consumption of natural resources in China is quickly reaching unsustainable levels. In 2009, China consumed26% of the world’s crude steel output and 47% of global cement production, according to the World watch Institute, an independent environmental research group. With 22% of the world’s population, China has just 8% of the fresh water supply, and what fresh water does exist is often too polluted to use. China’s buildings are almost always constructed entirely of concrete, which is notoriously energy inefficient.