Forms of Collaboration and Project Delivery in Chinese Construction Markets: Probable Emergence of Strategic Alliances and Design/Build

Abstract

The regulation that allows foreign contractors to qualify as wholly foreign owned 'construction enterprises' has come into effect since Sep 2002, as one of the steps of the Chinese government to honor its World Trade Organization (WTO) commitments. Strategic planning decides project deliveries of a foreign contractor, whereas emerging market of project deliveries may have significant impact on the strategic planning. Based on an electronic-survey covering foreign contractors, clients (foreign investors), and design institutes, design-build delivery has been found prevalent in foreign contractors’ projects in China. A SWOT analysis of foreign contractors has been conducted. Collaboration with design institutes is essential for foreign contractors’ sustainable growth, given the current construction environment in China. Among the various forms of collaboration, strategic alliance is revealed as the most appropriate form of collaboration for foreign contractors in China. Mutual-trust , synergistic strengths and complementarities, market demand for the services, flexibility for both parties, and minimum change of top managers have been ranked as top five critical success factors for strategic alliances between foreign contractors and design institutes. Finally, medium-sized, state-owned, and large-sized design institutes are rated as the1st, 2nd, and 3rd respectively in the strategic partner selection of foreign contractors.