The Evolvement Of Chinese Construction Industry Organization

This paper is a survey of the changes of industrial organization of construction in China. The author has made a review and analysis of the over 20 years development of construction industry and construction market in China since 1980s. The focus is on the evolvement of construction industry and market organization. In the part of the investigation of market organization evolvement, the author has identified the changes of the structure, conduct and performance of construction market in China brought by these changes. The author has drawn the following conclusions: In the renovation process of construction industry, the production quality problem, payment delaying and corruption problem are blocking the development of this industry. Although the market ordering, production quality and etc. problems are keeping on approving in the internal of the industry from the 80s, by now, these have not been well solved yet. These problems centre around all actors of the construction market and their activities, such as the active role of government, the relationship between investor and contractor, the relationship of contractor and labor, third party auditing, the compare of state-owned enterprise and private enterprise. The resemblance between the activities or problems existed in these connected units is the rent seeking behavior of collectivity and individuals. Further, the writer concludes that it is the "rent", bringing on the reduction of workable competition of construction industry. The writer also points out that the appearance of rent is because of governing and buyer's market. Without solving this problem the state of chaos and out-of-order competition of construction industry at present will not have radically change. Reviewing the evolvement of the construction industry and the market organization, the author finds out that the supply abilities of this industry can not fill the demand of the national economy development. There is shortage in many aspects. And the over development of the construction throughput is the main reason of the low efficiency of all this industry. In the author's opinion, to coordinate the development of construction with national economy, besides adjusting the dimension of throughout, optimizing the market structure seems more important. All of these should fully depend on the market system. Only if the market is ineffective, should the government conservatively intervene. And the author analyzes the changes in currency system, income distribution, capital investment, the reform of ownership; opening-up policy, effects of joining WTO and globalization during the reforming course, each of which has crucial influence on the industry. The dominant role has changed from government to enterprises themselves. At last of this paper, the direction of construction enterprise selections and construction industry development in China of following years are pointed out.