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      New Prospect of Construction Industry Development Seen from 2014 Work Report

      Source:未知  Time:2014-03-18 23:49

      Core Information: as a pillar industry of national economy, the construction industry attracts so much attention as to how it will develop among the wave of reform. Here are some content relevant to this industry that the reporter wants to share with readers.

      Editor’s note: the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) in 2014 have just concluded with the trumpet of comprehensive deepening-reform blowing. There are all themes such as reform, urbanization and decentralization......this year’s report on government work includes very pragmatic content in stirring rhetoric language, most of which not only become the focus of public attention, but also reflect the thinking on reforms of the new government. As a pillar industry of the national economy, the construction industry attracts so much attention as to how it will develop among the strong wave of reform. Here are some content relevant to this industry that the reporter wants to share with readers.

      The following are the main targets we have set for China’s economic and social development this year: Increase GDP by about 7.5%, keep the rise in the CPI at around 3.5%, create ten million more urban jobs, ensure that the registered urban unemployment rate does not rise above 4.6%, achieve basic balance in international payments, and increase personal incomes in step with economic development.

      Developing new regional economic belts as a strategic step for stimulating development

      Original: We will make developing new regional economic belts a strategic step for stimulating development. We will energetically carry out the master strategy for regional development. We will give high priority to the large-scale development of the western region; vigorously support the eastern region in taking the lead in transforming and upgrading the economy, and increase support to old revolutionary base areas, ethnic minority areas, border areas and poor areas. We will promote a new type of regional development plan, and extend the development in a phased way from the eastern region to the western region, from coastal areas to the interior, and along major rivers and land transportation lines. We will build a new economic development belt along the Yangtze River, and use major coastal and border ports as fulcrums to develop economic belts that connect the coastal areas with the southwest, central south, northeast and northwest areas. We will promote economic integration in the Yangtze River Delta, deepen economic cooperation in the pan-Pearl River Delta, and strengthen economic coordination in the Bohai Sea region and the Beijing-Tianjin-Hebei region. We will implement different economic policies in different regions, speed up relocation of industries, develop trans-regional transportation and goods distribution networks, and create new regional economic growth poles.

      Interpretation: In this year’s two sessions, economy belts and city groups have become a heated topic and the “holding-together” development across-region has become a trend for regional development. In the future, the several vertical and horizontal economic belts will be the pioneer to lead China’s economic and social development into a new stage, which will be both great opportunities and challenges for the construction industry. The construction of transportation, the planning of new urban areas and the transformation of old cities are all parts of it. How to position themselves in the new game of regional development and enjoy a share from the reform benefits is an issue that each construction company needs to consider.

      Increasing China’s competitiveness through expanding its overseas business presence

      Original: We will increase China’s competitiveness through expanding its overseas business presence. We will carry out reform of the management of outbound investment so that such investment is mainly reported for the record, and delegate much of the review and approval power over such investment to lower-level governments. We will provide better financial, legal and consular services, ensure orderly overseas business operations, and boost the export of products, project contracting and labor services. We will intensify the planning and building of a Silk Road economic belt and a 21st century maritime Silk Road, and promote the building of the Bangladesh-China-India-Myanmar Economic Corridor and the China-Pakistan Economic Corridor. By launching a number of major projects, we will speed up infrastructure connectivity with our neighbors, and open up new space for enhancing international economic and technologic cooperation.

      Interpretation: implementing the strategy of “expanding China’s overseas business presence” will gradually increase “China Power” on the international market. In 2013, China’s foreign contracted projects received a perfect ending with a turnover of $137.14 billion, which is increased by 17.6% comparing with last year. The newly signed contracts amounted to $171.63 billion, an increase of 9.6% compared with last year. With the operations covering every continent, the construction industry achieved significant results during its process of “expanding overseas business presence”. However, the current international project contracting market is facing increased risks as well as increasingly fierce competition from other developed countries. The needs of innovation of company business model and exploration of high-end markets present a test to the competitiveness of Chinese enterprises. Enhancing foreign investment management reforms and improving the financial, legal, security and other consular services as outlined in this year’s government work report will support Chinese companies to march their way into the overseas market. In addition, with the introduction of a number of international projects and the deepening of regional cooperation, Chinese construction companies will usher in a new stage of development in the international market.

      Improving the mechanism for providing adequate housing

      Original: We will improve the mechanism for providing adequate housing. To achieve the goal of ensuring housing for all, we will build more government-subsidized housing in accordance with the principle of giving targeted guidance, carrying out step-by-step implementation, and having governments at different levels assume their respective responsibilities. This year, construction of over seven million government-subsidized housing units will begin, more than 4.7 million of which will be in rundown urban areas, and construction of related supporting infrastructure will be strengthened. We will increase the proportion of government-subsidized housing in large cities. We will integrate the operation of public and low-cost rental housing. We will improve mechanisms and instruments for securing investment and financing for policy-related housing and use market forces to provide long-term, steady funding support to cover the costs of building government-subsidized housing. Governments at all levels should increase spending on building government-subsidized housing, improve its quality, ensure its fair allotment, and improve the mechanism governing its allotment and re-allotment. By the end of this year, 4.8 million units of such housing should be basically completed so that those in urgent need of housing can move in.

      Interpretation: as a matter of people’s livelihood, the construction of government-subsidized housing is an important aspect for the development of construction enterprises. The state has increased efforts in building affordable housing projects, which also provides a rare opportunity for all construction companies. However, while enjoying the benefits of development, all construction companies must maintain a strong sense of social responsibility and industry code of conduct to ensure the construction quality so that all the housing are not only new, but also safe and secure.

      Establishing free trade area institution and model that can be copied and extended

      Original: We will ensure the successful building and management of the China (Shanghai) Pilot Free Trade Zone so that this model can be copied and extended, and we will launch a number of new trials.

      We will actively participate in developing high-standard free trade areas; continue negotiations on investment agreements with the United States and the European Union, and accelerate free trade area negotiations with the Republic of Korea, Australia, and the Gulf Cooperation Council.

      Actively participate in the construction of a high standard FTA promote investment agreement negotiations United States and Europe to accelerate negotiations with South Korea, Australia, the Gulf Cooperation Council and other FTA process.

      Interpretation: the establishment of Shanghai FTA is a major initiative to deepen the reform and opening-up in China. The fundamental objective is to trial pilot institutional mechanisms that can be created, copied and extended to further expand opening-up in the future. Gao Hucheng, the Minister of Commerce, said that Shanghai FTA should not be seen as a hollow of policies, but the state’s innovation in deepening the next round of the opening-up system. The purpose of building Shanghai FTA is to release benefits through institutional innovation, concentrate on transformation of government functions and relax the approval of investment fields. Currently, a number of provinces are enthusiastic to apply for establishing FTA. In this area of reform, there’s a huge market waiting for the construction companies.

      Always giving full attention to workplace safety

      Original: we must always give our full attention to workplace safety. We must strictly enforce laws and regulations on workplace safety, fully implement the responsibility system for it, and resolutely prevent the occurrence of major and very serious work-related accidents. We will energetically improve and maintain market order, continue to carry out targeted cleaning-up campaigns, and crack down on the manufacture and sale of counterfeit or shoddy goods. We will institute a monitoring mechanism with full public participation, which oversees the whole process from production and processing to distribution and consumption, and can trace problems to the source. We will improve the safety monitoring systems for food and drugs with the involvement of both central and local governments and participation of community bodies.

      Interpretation: The construction industry has very high incidence rate of accidents. In 2013, there were over 500 safety accidents occurred in housing and municipal engineering projects, killing more than 600 people. The proposal of “must always give our full attention to workplace safety” is also an alarm set for the construction industry about the importance of safety management.

      Making those who lose credibility pay the price and smoothing the way for those who have credibility

      Original: We will move faster to put in place a social credibility system, share more government information between government departments and with the public, introduce unified codes for natural and legal persons, implement a blacklisting system for enterprises that violate market competition principles and infringe on the rights and interests of consumers, and make those who lose credibility pay the price and smooth the way for those who have credibility.

      Interpretation: The Social Credit System Construction Plan (2014-2020) approved on this year’s State Council Executive Meeting on January 15 requires the comprehensive promotion of the social credit system construction, including government, business and social integrity etc. This year’s Report on Government Work again focuses on the credit system, indicating the government’s determination to build integrity in society. There’re often large amount of funds involved in the construction industry, which can easily lead to power abuse. Corruption often occurs in processes like land transfer, bidding, and construction etc. Poor quality projects such as “crunchy buildings, crooked bridges and sandy floors” harm the reputation of this industry. What’s more, there’re frequently news reports about the back pay of migrant workers. The construction industry has an urgent need of reshaping its image and rectifying trade order by the credit system construction. The national efforts to build a credit system will undoubtedly benefit the healthy and long-term development of the construction industry.

      Streamlining administration and delegating more power to lower-level governments: this is a revolution the government imposes on itself.

      Original: This year, we will cancel or delegate to lower-level governments an additional 200 plus items requiring State Council review and approval. We will deepen reform of the investment approval system, abolish or simplify preliminary review and approval procedures, give businesses full power over their investment decisions, and make it easy to make investments and start businesses. We will introduce a system to list all items over which government review and approval are required and release the list to the public.

      We will attach equal importance to both delegating power and strengthening oversight, establish a mechanism of coordinating management between government bodies at both the same and different levels, and ensure that both responsibility and power are delegated together and that relaxing control and strengthening oversight go hand in hand. We will expand the one-stop review and approval model and one-window services, and explore ways to conduct unified market oversight.

      Interpretation: decentralization becomes one of the first major priorities of this government. Since last year, the State Council ordered the implementation of institutional reforms, canceled and decentralized416 administrative approval and other matters in batches, amended the government approved investment project directory, and promoted the industrial and commercial registration system reform. This year, as the prior step to reforms, decentralization further releases a strong signal to release the enterprises and become market-driven. For construction companies, there will be less difficult situations dealing with government departments, but on the other hand, with the government’s letting go, some construction companies need to face the pressure of competition. Therefore, all construction companies have to rely on their own competitiveness to win.

      Focusing on three tasks, each concerning 100 million people

      Original: We will focus on three tasks, each concerning 100 million people: granting urban residency to around I 00 million rural people who have moved to cities, rebuilding rundown city areas and villages inside cities where around 100 million people live, and guiding the urbanization of around 100 million rural residents of the central and western regions and cities.

      We will increase support for a new type of urbanization in the central and western regions. We will also improve the structure of cities and towns in the eastern region and raise the quality and standard of urbanization there.

      We will strengthen management innovation and institutional development pertaining to urbanization. We will expand the rebuilding of rundown urban areas so that cities will take on a new look instead of having stretches of rundown areas existing side by side with high-rise buildings. We will make plans for urbanization in a coordinated way in accordance with the national guidelines for developing a new type of urbanization. We will use urban construction land more efficiently, give high priority to developing public transport, protect sites of historical and cultural interest and natural landscapes, and avoid making cities and towns all look the same.

      Interpretation: as the only way to modernization, urbanization is important to solve issues with the agriculture, rural areas and farmers. It is a strong support to promote balanced regional development and in important starting point to expand domestic demand and promote industrial upgrading. On March 16, the National New urbanization Plan (2014-2020) was finally unveiled as expected and this is a macro, strategic and fundamental plan for guiding the healthy urbanization development across the country. The construction industry will play a very important role in the process. With the advance of urbanization, the construction scale will increase dramatically and the construction plays an important role in securing the projects. As a pillar industry of national economy, the construction industry will be critical for economic growth and increased revenue. This year’s report on government work attaches much importance to urbanization and the issue of the National New urbanization Plan (2014-2020) drives forward a new round of development for the construction industry and opens up vast market opportunities for construction companies.

      Making people who work can live a decent and dignified life

      Original: Employment is the basis of people's wellbeing. We will steadfastly implement the strategy of giving top priority to employment and carry out a more energetic employment policy, improve the employment and business startup environment, and foster business startups in an innovative way so they create more jobs. With 7.27 million college students graduating this year, we need to create more jobs, provide non-stop employment and business startup services, and increase the rate of employment and business startup for college graduates. We will increase support for urban residents who have difficulty finding jobs, ensure that at least one member in every zero-employment family gets a job, and do a good job in resettling and providing reemployment to laid-off workers due to the shutdown of outdated production facilities. We will provide coordinated employment services to rural migrant workers and demobilized service personnel. We will work hard to create more rewarding and higher quality jobs so that people who work can live a decent and dignified life.

      Interpretation: to make sure “people who work can live a decent and dignified life,” the government requires higher standards for employment issues that not only focus on the quantity of employment, but also the quality. In the construction industry, the proportion of migrant workers is over 80%. It’s fair to say that the construction industry has made a great contribution to the undertaking of rural labor force transfer. But in recent years, even the construction industry has experienced frequent shortage of workers because the new generation of migrant workers is different from their parents. They are not only concerned about work to make money, but are more eager to be part of the city, to live a decent and dignified life in the city, and to have greater personal development themselves. All these are in line with this year’s report on government work and require the companies to change in their management, to provide staff with better development platform and promotion channel so that all employees can develop and grow together with the companies.

      Declaring war against pollution

      Original: We will fully implement the plan for preventing and controlling air pollution, with the focus on mega cities and regions with frequent occurrence of smog. We will start by reducing PM10 and PM2.5 emissions, and focus on the following key areas: improving the industrial structure, raising energy efficiency, reducing vehicle exhaust emissions, and preventing and monitoring wind-borne dust. We will improve the new mechanism involving government, enterprises and the general public, coordinate prevention and control efforts in affected regions, and fully implement the action plan for preventing and controlling air pollution.

      Interpretation: recent years, the smog is expanding and the pollution becomes more and more severe. It is a warning from the nature on the extensive mode of development. When it comes to the smog causes, the construction industry is being “named” as one of them. In addition to good site management and dust prevention, the construction and related industries need to get rid of the traditional extensive development mode and turn to the intensive and efficient construction industrialization. Realization of construction industrialization will not only be conducive to saving energy, but also help to reduce environmental pollution. It will become a strategic initiative to boost the ecological civilization construction and the construction industry transformation and upgrading is now imperative.

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