The Research On Low Price Bidding Of Chinese Enterprises’ Overseas Project Contracting

As one of the main form of China’s ‘Transnational Development Strategy’, overseas project contracting business has a rapid development in recent years. At the same time,China’s overseas contracting enterprises are facing many constraints.There are many problems need to be solved, and low price bidding is one of the problems. In the bidding of overseas projects, it’s not a rare thing that China’s enterprises first get the project at a low price, but eventually suffered heavy losses. This has been questioned by the outside world,and also has a negative impact on the development of the industry.Firstly, the study is based on the definition of the low price bidding. Then comes out the necessity and urgency of research on low price bidding. By analyzing a large amount of data that collected from China statistical yearbook, the ENR magazine and the website of government and enterprise, we can see the situation of China’s overseas project contracting business. The scale of the industry is increasing while the average size of Chinese enterprise is small. Also,the concentration tendency of market distribution and industrial distribution as a trend will lead to the low price bidding. The existence and gravity of low price bidding can be proved by recent cases of Chinese contractors.Secondly, the paper analyze the reason that cause the low price bidding of Chinese contractors by method that combines with normative analysis and empirical analysis to find out four main reasons that can answer the question. The competition among enterprises can cause a low price bidding as well as the competitive advantage of enterprise.And the mistaken of pricing that caused by the absence of preliminary investigation is one of the reasons. The last reason is the unscientific concept of management.Thirdly, based on the analysis of the reason that causes the low price bidding, the paper provides some suggestions to solve the problems. Chinese contractors should improve competitive advantage and project management, and learn the advanced ideas.Also, it’s important for industry association to serve as a coordinator and a supervisor, and to provide professional services. As for government,the first thing to do is protecting the order of market competition. The support of fiscal policy also helps.