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CHAPTER FIVE I UII(J The Constructiol/ Market and Development The land on which Ihe buildings required for a joint venture '" :: I J •i- • -~ .I , ftrt • , , Fig",.., 5.1 COI/strlte/iut! OIl/Pili us II /H.'lTt'IIWgt' ofGrrus DOml'51/C P"I/bj(~f (GD/») • ~ " " ~ " " -ti' " • ~ ~ ic~ , nn • , , Hglln> J.! IhrO'"UI);(' Of'lJlullu/",mr fore., III ,he (mum/cliVlI 1mb",...!' People's Republic of China in 1999. including the Oriental Plaza development in Beijing. This project is a mixed-usc muhistorey development with a 101al gross floor area (GFA) of 9\0 844 m~. It consists of four basement levels, a three-level relail podium of I t5 953 m2 wilh department siores and individual shop units and atria, office and serviced apanmcnt complexes with a total of GFA of 394078 Ill: at each end of the development and, at the centre of the development. a hotel and serviced apartment complex of 86696 Ill' . The estimated cost of the project is Rmb7600 million. In order to respond to such huge demands, China's construction industry has had to modernise itself. become beller managed. more mechanised and institute much stricter quality control systems. An industry cannot be transformed overnight; it is an ongoing process that takes many years and while much has been achieved. much effort is still required. For many years under the old system the construction industry had been plagued with such problems as long construction cycles and poor quality. Left with this legacy, the industry has focused on increasing its efficiency by strengthening management. updating plant and equipment. shortening construction times. improving quality, increasing returns on investment. and introducing a tendering system. Figures 5.1 to 5.3 put the 1996 construction statistics for China into perspective in comparison with those of the USA, Australia. UK. Japan and Hong Kong. The construction industry in China produces a similar proportion of national output compared with the other economies. The construction sector in China docs not employ a large proportion of the total labour force by international standards. but by an y standard 34 080 000 (including design institutes) is a large absolute numbcr of employees. The increase in employment in construction shown in Figllre 5.4 renecls the growth in the demand for eO!lstnJction during modernisation. The changes resulting from thc transformation of China's economy have had a significant impact on thc construction market. for example: the freedom given to enterprises to make investment decisions and to raise funds has led to an increased proportion of construction work being financed outside 67 68 ....• • .. • • • m .1 ""~1!1" ~ ,...,•. - , m m I!~~~! - .--... O,"It'/II"II'I,,:a H'·'Jill)!. MiIio.umbcr "0 Incrc:a51: 1987 13 &40000 1992 26600000 12', '9% )4 0110000 4)° 0 Figllll' 5../ /1If11 '''W III II", 101(11 ,wmh"I" (II p"n"", ,'mp/"r,'" II! III,' C"II,I/'11l"1101I ""Pt/" IYH7 1996. $-.wn' ("I",,,, .\'(1/11//("lem in which the design team is resl>onsibie to the clicnt for the proper and timely completion of the project within budgct limits from the 73 Supervision unil Conslrucuon commiSSion ,-------------------, I I l I I L I I L I I I I PRe Pany I I FOll;"lgJl Pan)' I I JV Invcstment Company - - - - - - - 1-------Sometlmi 'S S,"'W/I"I('.f Preparatory Office Project t-Ian:lgcmcm Org:lniSlllions - - - - - - - 1-------PRC Foreign Design Ins,itute Consultants - - - - - - - 1-------- ------- ------Foreign gl.'1lCral contractor acting as culler. Entreprcl\£"ur Managemem contractor Construction manager ~ I "' I iI I I I I I I I PRC Construction Company comrac! I'RC material suppliers contract Foreign material suppliers contract PRe Specialist trade commclOrs comrael Foreign speciahst trade contrnctors 1\011,': 11 IS I llO'"blc 10 h:ll c mon: than JU" I two COIl'paIllCS I In 11M.' ,mcSlmcm I ~0I~1: _--.J ----, Design I I ____ --.J ----, Construction showmg aitcmah\c contractual ammgcmcms wnll sp«l3hsts and suppliers I I I I I I I I I I I I I I I I L ______ -.:ntrac~ __________ -.J "'81'" 5.7 Orgunuul;lmul/.fT'fJ"J....ments Ihut cfluld lx' IIsedfor a conSlnlClIOn pro,!":f 74 moment it is appointed until complction of thc constnlction process and the satisfactory complction of all remedial works to the latent defects. The state requires the establishment of a supervision unit to check that the required quality is achieved during construction. The unit reports 10 both thc clicnt and the construction commission and is...

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