Based on its economic growth projected by the Ninth Five-Year Plan (1996-2000), the output for the construction and installation industry in China is estimated at $300 billion a year, employing about 30 million people. Gross construction output is about 22 percent of gross domestic product. Because of excess demand for construction work, the government has restricted non-productive construction (housing is classified as non-productive along with some other social and cultural building types). The gross floor area under construction in 1990 was about 2.5 billion square feet; the gross floor area completed that year was about 1.2 billion square feet.

Construction works predominantly encompass tourism, education, energy, transport, and the industrial special enterprise zones. The special enterprise zones are intended to be areas for foreign investment through joint ventures. Special arrangements exist regarding taxation, import levies, and incentives for foreign direct investment (FDI).

The China State Construction Engineering Corporation is the largest state-owned construction company. It employs about 1.5 million employees, 10 percent of whom are the administrative or professional staff. It is divided into eight divisions that undertake large projects all over the country. The corporation has an overseas division involved with over 400 projects in 50 different countries. Other Chinese contracting organizations include China Civil Engineering Construction, China Metallurgical Construction Group Corporation, China National Overseas Engineering Corporation, China Road and Bridge Corporation, and China International Water and Electric Corporation.


Three main entities pertaining to China’s construction industry.

         1. Development Unit:

It is responsible for initiating a project, organizing the team members, and assuring the satisfactory completion of a project.

      2.  Design Unit:

This unit is responsible for the preparation of conceptual design, detailed drawings, and supervision of construction works of a project.

      3.  Construction Unit:

 It is responsible for carrying out the construction works, usually with the help of separate specialist units for doing mechanical and electrical installations.

Contractors (collective-owned firms and rural construction teams) are licensed and classified into four categories based on their assets, expertise, and previous experience. Apart from national contractors, they work normally in their region and must obtain permission for working outside their region. All contractors are required to register with the Local Construction Commission. Permission of the state authorities have to be obtained to work abroad.



Joint Ventures with foreign companies are encouraged in China. When a Chinese construction company participates in a joint venture, it can import construction equipment tax-free.

Foreign construction involvement tends to be limited to the provision of design and construction management techniques for complex projects and the transfer of technology involved with the installation of plant and machinery. The construction work itself is usually carried out by domestic contractors.

The majority of foreign investment is carried out using co-operative joint ventures. Under the agreement, the Chinese party usually provides resources such as land and labor, and the foreign party provides capital, advanced technology, and key equipment. The parties agree to co-operate for a period of years after which the whole enterprise will come under Chinese ownership.



Human resources are in abundance. There is no shortage of unskilled or semi-skilled labor. But the industry is hampered by a lack of contemporary technical knowledge and is therefore anxious to acquire skills from abroad.

Basic building materials are available. But material production cannot always be kept up with the increase in demand; shortages occur at times. The vastness of the country ( 37,10,000 square miles) contributes to delays in the delivery of building materials. Delays due to transport difficulties are also common.

The state does not control the supply of materials by stockpiling them in each region; they are delivered directly to the construction units that contract for a project.



The Construction Bank of China and the State Development Bank provide funds to various construction departments or units only for large national projects. Other sources of funding for public projects include the World Bank and the Asian Development Bank. Many small projects are funded by the owners themselves without any access to credit financing. For joint venture projects, the funds usually come from the foreign partner.



Open tendering has been introduced to encourage competition and to prevent monopolies. Construction and design units from all over China can now bid for projects previously not available to them. Even though the majority of firms that bid for large construction works are state-owned, this action has reportedly resulted in a reduction of construction costs.

There are no standard forms for international contracts. AIA, RIBA, and FIDIC contract forms are generally used with substantial amendments.

All international construction contracts are written in Chinese and English and are generally expressed as subject to Chinese law. Both versions are considered to be equally authentic for legal purposes. There are various government building regulations and specifications. Different provinces and cities have their own schedules of rates used for estimating and determining project costs. These rates, however, may not be directly applicable to a joint-venture project depending on its type and location.



All property is owned by the state. Individuals and companies are only granted a lease of a property under the concept of land use rights. A holder of land use rights is allowed to exercise all the rights of an owner during the term of the lease. The grant of land use rights is pursuant to a negotiated agreement with the local government at or above the county level.

The regulations set forth for the maximum period of grant ranges from 40 years for commercial development to 50 years for industrial development to 70 years for residential development. Once a property has been leased, the state generally may not resume possession prior to the expiration of the term of the grant. Subject to the approval of the relevant real estate department, the sale of incomplete constructions is permitted.




Singapore’s construction industry grew at a rate of more than 10 percent in the last few years. The country’s gross construction output is more than 14 percent of its GDP.

Most of the construction work in the early to mid-1990s were in the public sector with the Housing Development Board as the major client. Other major works included transportation and drainage.

The industry in Singapore is supported by the Construction Industry Development Board (CIDB). The organization is involved in all aspects of the industry: management, technology, research, training, and quality control. Contractors are required to be registered with CIDB to be eligible for participation in bidding for public sector construction projects.

Local contractors are given preference for the public sector works. Foreign contractors are encouraged to form joint ventures with local companies.

Contractors with consistently good performance and quality workmanship are given premiums to secure public sector tenders. The maximum premium is 5 percent or S$5 million, whichever is lower.

Design work is mainly undertaken by architects and professional engineers. Quantities of work are determined by certified Quantity Surveyors.


Funds for public sector works are provided by Housing and Development Board (HDB) and Public Works Department (PWD) under the Ministry of National Development. HDB provides funds for housing for sale to lower and middle-income groups.

The government encourages homeownership. The funds come from savings by the employees through compulsory contributions to a fund known as Central Provident Fund.



 Both governmental development organizations have their own standard forms of contract.

Most public contracts are awarded on the basis of the lowest responsive tenders submitted by contractors registered with the CIDB.

Most private projects use the Singapore Institute of Architects’ forms of contract. The contracts could be either (1) a measurement contract (for use with bills of quantities) or (2) a lump sum contract (where quantities do not form a part of the contract).


Professional indemnity insurance is mandatory for architectural and engineering firms working as limited companies.


Physical development is regulated and facilitated by the Urban Redevelopment Authority. Most types of development require written planning permission.

The Building Control Division of PWD is responsible for setting and monitoring building regulations covering structural soundness, lighting, ventilation, fire safety, and thermal transmission.

The Singapore Institute of Standards and Industrial Research draws up and promulgates the standard specifications for products. It is usual for the manufacturers to comply with the standards. Architects and other professionals follow these standards while making specifications.




  • Thailand’s gross construction output was about 19 percent of its gross domestic product in the early 1990s.
  • Public sector expenditure on infrastructure development is continually increasing due to the expanding level of economic activities. Need for new roads, power generation and supply, water supply, and sewage disposal is growing.
  • Housing demand has been stimulated by the high level of economic growth.
  • The number of construction companies has increased considerably over the last few years. It is estimated that there are about 5,000 construction firms in the country.
  • Most of the top construction firms are international, often with joint ventures.


  • The government is one of the major clients of the industry. The government projects are funded by the government Treasury Department.
  • State enterprises are partnerships between the public and private sectors. These projects are funded by governmental sources and foreign investment.
  • Private-sector funding is provided by commercial banks and insurance companies. The funds may also come from a developer’s own resources.


  • Government works use different versions of a standard form produced by the Joint Contracts Tribunal of the United Kingdom.
  • No standard form of contract exists for the private sector. However, a commonly used form is a simplified version of the above contract.
  • Contract documents may be produced either in Thai or English.


  • Contractors may be liable for injury to persons or property at the site caused during the period when construction works are carried out.
  • Contractors are required to offer a warranty of 6 to 12 months after the completion of work.  The contractors usually take out an All Risks Insurance Policy.
  • Claims are usually settled out of court.


  • Written permission has to be obtained, by submitting drawings, for development works. The proposed development should be in compliance with land use requirements
  • Once approved by the land use department, the drawings are checked against compliance with by-laws related to architectural, structural, electrical, and mechanical standards.
  • If the designs satisfy all requirements, they are endorsed by the signature of relevant authorities granting planning permission. The process takes about one and a half months.
  • The Thai Industrial Standard draws up and promulgates the standard specifications for products. However, many foreign equivalent standards are also accepted.