Key challenges faced by Chinese contractors in Malaysian construction industry

Abstract

PurposeThe purpose of this paper is to investigate the major challenges faced by Chinese international contractors (CICs) in the Malaysian construction industry.Design/methodology/approachAn exploratory sequential mixed-methods research approach was adopted where following a detailed literature review and semi-structured interviews with local professionals, 20 prevalent challenges experienced by CICs are identified. Subsequently, a questionnaire survey was used to elicit the views of 100 construction practitioners. Descriptive statistics were used to prioritise the challenges, while exploratory factor analysis was conducted to uncover the underlying factors.FindingsThe five most crucial challenges identified relate to: changes of regulation, cost control, contract clauses, language barrier and quality control. Exploratory factor analysis revealed four major underlying dimensions of these challenges, in connection to financial and government policy management, organisational performance management, supplier relationship management and cross-cultural management.Research limitations/implicationsThe challenges are considered primarily involving CICs in the context of Malaysia; further work can be extended to Western or other East Asian, such as Japanese and Korean, international contractors undertaking construction projects in Malaysia or selected developing countries around the region.Practical implicationsThis study will benefit professionals involved with China-backed construction projects in countries sharing demographics and socio-economic characteristics akin to Malaysia. The outcome of the study is expected to facilitate project managers to devise proactive risk-mitigation measures to reduce the impact of these challenges and to improve project delivery.Originality/valueThe paper examined the challenges faced by CICs in the Malaysian context. This is a timely study, as China’s Belt and Road Initiative will provide considerable opportunities for Chinese companies in Malaysia.