An employee welds one of the final four pieces of fabricated steel for the San Francisco-Oakland Bay Bridge. The work was done on Changxing Island, the site of Shanghai Zhenhua Heavy Industries Co. Gao Erqiang / China Daily

Chinese firms move up value ladder with overseas projects

In one of the most challenging tasks it has ever embarked on, China's biggest heavy machinery maker, Shanghai Zhenhua Heavy Industries Co, wrapped up construction of the final four pieces of fabricated steel for the San Francisco-Oakland Bay Bridge.

Zhenhua hopes that its $350 million (246 billion euros) contract, part of a $6.3 billion reconstruction project, will foster its reputation as a top-notch builder able to meet the most stringent safety and quality specifications.

"The erection of the Bay Bridge is a milestone for Zhenhua to diversify into the bridge-building sector," company president Kang Xuezeng said at the completion ceremony on July 11 in Shanghai. "If Zhenhua is able to build the steel section for a US bridge, then we are capable of erecting any bridge in the world."

One month earlier, another Chinese heavyweight in international engineering projects suffered a major setback in Europe. China Overseas Engineering Group withdrew from a $447 million highway construction project in Poland after incurring heavy losses. The company became the first Chinese enterprise to win a large European highway contract two years ago.

These projects demonstrate that China is moving up the global economic value chain and trying to break into big-league projects in the US and Europe, some experts say, as China aims to become the world's civil engineer.

Chinese enterprises have been hired to lay rail lines in Venezuela, renovate subway systems in the United States and build huge apartment complexes in Saudi Arabia - on the reputation of showcase projects such as Beijing's airport terminal and mammoth high-speed railway network.

Rising numbers

Figures from the Ministry of Commerce indicate that, from 1978 to the end of June, China had clinched overseas engineering contracts worth $765.5 billion.

In the past decade, China's overseas engineering revenue grew by an average of 27.1 percent every year, while the value of newly signed contracts climbed an average of 27.6 percent each year.

After starting with housing and transportation programs in the initial periods, Chinese overseas engineering firms have diversified into sectors including power and petrochemical industries, water supply and sewage, telecommunication, and metallurgical and mining business.

The number of overseas contractors from China has exploded since their first attempts in the late 1970s. More than 2,000 Chinese enterprises now compete in international markets.

The Top 225 International Contractors list compiled last year by Engineering News-Record magazine included 54 companies from the Chinese mainland, the largest number from any country. They accounted for 13.2 percent - the largest share - of the $383.8 billion in revenue generated by the 225 contractors in 2009 from projects outside their home countries.