Overcoming Problems Associated with Sustainable Development of the Construction Industry in China

Abstract

Confronted with the transition from the traditional planned to market-driven economy, the Chinese construction industry has undergone rapid reforms and developments. The way to improve the competitiveness of Chinese construction firms is very important for the sustainable development of the industry. This paper examines the market opportunities and challenges of the Chinese construction industry. The critical factors affecting the competitiveness of construction firms are identified through a structured questionnaire survey. Using the relative importance factor analysis, the critical factors that need to be addressed in the reform include: abnormally large in size of enterprises; uncoordinated organizational structure; poor rewarding system leading to de-motivation; leaders' lack of sense of ownership to the enterprises; immature procurement systems; delay in payments from clients; labour redundancy in most enterprises; short of technical professionals; and poor quality equipment, which are peculiar to the Chinese construction industry due to the structure, market, management, and resources of the industry. To revive the industry, the following strategies and efforts need to be employed: regulating the structure of the industry by rationalizing the proportion of different sizes of enterprises, creating a favourable market environment to encourage market competition, and reengineering the current ownership of the state-owned enterprises.