Opening Up China's Construction Engineering Services Market

February 28, 2006 | BY

clpstaff &clp articles

As part of the government's efforts to reform the construction sector, the Ministry of Construction has issued draft provisions on the administration of foreign-invested construction engineering service enterprises. Do these provisions go far enough to encourage greater foreign investment in the sector?

By David Cox and Norman Xu, Minter Ellison Lawyers, Shanghai

The draft Provisions on the Administration of Foreign Invested Construction Engineering Services Enterprises (Provisions), which were issued by the Ministry of Construction (MOC) on September 19 2005 for public review and comment, shed further light on how foreign investment in China's construction sector is likely to develop. The Provisions are part of a continued process to modernize and reform the construction sector and to address China's World Trade Organization commitment to open up the construction engineering services sector.

When formally promulgated, the Provisions will supplement Decree 113 and Decree 114, which address foreign investment in construction enterprises and design institutes to complete the foundations for foreign investment in China's construction sector. The Provisions address foreign investment in construction engineering service enterprises, which include construction supervision, tendering agent and cost consultancy services. Furthermore, the Provisions provide a potentially more simplified process for foreign investors to engage in construction project management in China.

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