overview of the international competitiveness of chinese construction firms puying li ali parsa...
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Overview of the international competitiveness of Chinese construction firms
Puying LiAli Parsa
Simon HustonAnil Kashyap
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Ph.D. flow diagram
Conceptual
RO1: pathwayRO2: competitiveness on construction RO3: global construction market
Exploratory
RO4: Methodology RO5: primary data analysis RO6: model
Operation
RO7: model test
Reflexive
RO8: CorroborationRO9: Conclusion
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Data\Methodology
• Literature review of the China and global construction market
• Secondary statistical data analysis (the China statistical yearbook, Engineering news records and government reports)
• SWOT analysis
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The current issues of Chinese construction firms (CCFs)
CCFs have captured the market lead in the African construction market, but challenges in the European and American markets still remain.
The CCFs’ international revenue still lower than Western counterparts.
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Global construction market
Source: 1. Top 225 international contractors (ENR2003-2012) 2. Top 250 international contractors (ENR 2013-2014)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
167241.9 189412.2
224427.8
309782.9
390007.7 383732.3 383511.3
452898.9
510878.5
543840.4
Figure 1: the international revenue by top international constractors
international revenueUS$ MIL
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Global construction market
Figure 2: The international revenue of region by top international contractors in last decades.
Source: 1. Top 225 international contractors (ENR2003-2012) 2. Top 250 international contractors (ENR 2013-2014)
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The historical developments of Chinese construction firms
Worked on a non-profit basis on agreed projects to satisfy target plans
Reform of company structure and ownership to meet the demands of international construction markets
Emergence in global construction markets
Pre-1970s
1970s – 1990s
Post-2000s
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Case: Chinese Communication Construction Company Ltd.takeover of John Holland
Ranking No.10 of top international contractors
Subsidiary of GRUPO ACS, Spain, which is ranking No. 1 of top international contractors
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Case: WestConnex M4 East Motorway project in Australia
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Chinese construction firms’ share in the global market
Figure 5: The market share of top 250 international contractors in 2013
Source: top 250 international contractors (ENR, 2014:8)
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Chinese construction firms’ share in the global market
Figure 6: Annual turnover value of CCFs in different global construction market
Source: China Statistical Yearbook (2005-2014)
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SWOT analysis of Chinese construction firms in global market
Helpful HarmfulStrengths
• Human resource capabilities • Lower bidding price • Advanced technology• Good relationship with
developing countries • Financial support by state-owned
banks
Weaknesses
• Lack of professional project managers
• Absence of design capability
Opportunities
• Government encouragement and promotion
• Good relationship with developing countries
• Asian Infrastructure Investment Bank (AIIB) was initiated by China
Threats
• High business risk• High political risks
Inte
rnal
Ex
tern
al
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The international competitiveness of Chinese construction firms
Cheaper project costExperienced in working abroad The high level of productivity Advancement technologies The special loan interest from the China State-
owned bank The Bilateral and Multilateral agreements
supported by the Chinese government
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Suggestions
Improve technology to support excellent project quality;
Innovate in finance to achieve more international revenue and turnover value, thus improve rank/position in the global market.
Develop project management skills to control energy saving, risk avoidance and project progress.
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Further research steps
• Analytical review of portfolio management (finance, human resource, technology etc. ) to compare performance of top international and Chinese construction firms
• Develop competitiveness model and benchmarking tool
• Expert interviews (Delphi method) and intensive research on selective firms (case studies)
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References:
China Statistical Yearbook (2004-2014). Engineering News Records (2004-2014). The top 250 international contractors. Ministry of Commerce of China (2014). Pheng, L. S. and Jiang, H. B. (2003). Internationalization of Chinese
construction enterprises. Journey of Construction Engineering and Management, 129(6): 589-598.
State Council of China (2014) Yan, Z. K. (2005). Human Resource Management under the strategy of Chinese
construction enterprises going overseas. Railway Construction Technology. 22(4): 12-20.
Zhao, Z. Y. and Shen, L. Y. (2008). Are Chinese contractors competitive in international market? Construction Management and Economics, pp. 255-236.
Zhu, Y. (2006). Making the international contraction enterprise. Construction Economy , 27(1): 70-72.
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Thank you