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Chinese contractors big business in the US

Updated: 2011-07-29 11:39

By Zhong Nan (China Daily)

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BEIJING - Chinese construction contractors seem to have been on an around-the-world voyage with all of the remarkable landmarks they have helped to build.

Skyscrapers in United Arab Emirates. A dam in Iran. A massive airport in Algeria. But it's the United States where contractors are looking to explore next.

"Chinese construction companies are making impressive inroads into the US market, thanks to their abundant financial foundation, modern management methods and comprehensive after-sales services," said Diao Chunhe, president of China International Contractors Association, which helps Chinese companies facilitate new business.

In 2010 alone, Chinese construction companies signed $1.04 billion worth of contracts with various US business partners and completed $836 million worth of projects in multiple states.

The Manhattan subway, a coliseum in South Carolina and the Revel Atlantic City, a massive entertainment hotel and casino in New Jersey, are a few of the projects China Construction America Inc has been working on this year.

Zhang Xijing, assistant to the president of China Construction America Inc, said the company's business in the US is growing fast, but declined to detail any future projects.

However, the Texas Department of Transportation (TxDOT) said the company submitted a bid this year to build a 180-mile toll road, known as the Grand Parkway, in the Houston area.

"TxDOT is pleased that the Grand Parkway drew interest from so many firms in the US and abroad, and we will thoughtfully consider each information packet - including that submitted by China Construction America Inc - as we wish to find the best project in the interest of Texas taxpayers and Houston-area motorists," Karen Amacker, media relations director of TxDOT, told China Daily.

The project, which will envelop the metropolitan city, has attracted almost two dozen responses, many of them international construction firms in Germany, Spain, Israel, Australia and Brazil.

TxDOT is expected to decide on the winning bidder for a project potentially worth billions of dollars by June 2012.

China Construction America Inc, a subsidiary of China State Construction Engineering Corporation (CSCEC), is keeping its ear to the ground for any new work in the US.

"We rely on the latest construction technologies, strong financing ability, modern management network and flexible investment strategies to compete with foreign and local companies in the US market, because the era of cheap labor and material has already past," said Li Jiqin, executive manager of CSCEC's overseas business department.

CSCEC, China's largest international general contractor, has completed a number of commercial and government projects in the US, such as a train station near Yankee Stadium in New York City and a high school in South Carolina.

In 2009, the Beijing-based company started work on the largest single-contract construction project in the history of the New York State Department of Transportation: the rehabilitation of the Alexander Hamilton Bridge. The 1,458-foot bridge had not had any major repairs since it opened in January 1963. CSCEC finished work on the $407 million federally funded project, which links Harlem to the Bronx, in May.

North America and Europe are the world's largest construction outsourcing markets with a combined annual output value of $7.5 trillion. This makes up about 13.4 percent of the total output of the global economy, according to the China Construction Industry Association.

Huo Jinhai, deputy general manager of an overseas branch of China Construction International Corporation, said the majority of Chinese construction companies operating overseas are State-owned enterprises that have quick access to funds, goods and professionals to meet the needs of projects.

"Localization strategy has played another important role in gaining favorable impression from the US society. Chinese construction companies normally employ 40 percent of US workers and technicians in a project. Also, they have intentionally increased the proportion of women and minority groups in their local teams," Huo said.

Andrew Cassey, assistant professor of economics at Washington State University, thinks the low bids by Chinese companies help land new business.

"US firms or government authorities sign contracts with Chinese construction companies because they are cheaper than other competitors".

Engineering News-Record, a US magazine that provides news and analysis on the worldwide construction industry, cites 54 Chinese companies in the top 225 international contractors in 2010. Combined, they took 13.2 percent of 225 constructors' total business volume.

One of those companies was China's Shanghai Zhenhua Heavy Industry Co Ltd, formerly known as Shanghai Zhenhua Port Machinery Co. Earlier this month it finished the final four pieces of fabricated steel for the San Francisco-Oakland Bay Bridge.

The 50,000 tons of steel, with a contract value exceeding $350 million, are part of the $7.2 billion Bay Bridge project. A Japanese company wanted more than $600 million to undertake the project, and a South Korean company quoted more than $400 million.

"I don't think yet that Chinese construction companies are being hired because of unique skills in the US, but that may happen in the future for high-speed rail or wind projects," Cassey said.

China Daily

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