Building Factories in China: Major Construction Issues

- US Active

Successful project construction in China lies in the company’s ability to plan and organize according to its end goals. The project will typically involve four groups; the company, the authorities, required parties and consultants. This article provides information on these four groups and how they work together to complete a building project in China.

• The foreign company is responsible for the due diligence and setting clear-defined goals in regards to budgeting, scheduling, construction, project management, etc. During the planning phases, it may be acceptable for project managers to be at the company’s headquarters, but during the construction phase, it is imperative that the company have the project managers in China and available to advocate the company’s project goals. Lack of preparation and the inability to understand the local Chinese culture has been the basis of many project failures.


• The authorities include local Chinese officials and utility companies that are responsible for matters such as land use rights, zoning regulations, and utility provisions. Although many industrial zones do their best to support foreign investment in China, not addressing issues clearly and in a timely manner can lead to misunderstandings and an exhaustion of time and energy.


• The required parties will vary depending on the type of investment. Commonly, a licensed designed institute (LDI) and a licensed construction company are included in this group. An important aspect to remember is the Chinese architectural and engineering services offered by these parties will not always offer the same scope of services as a western counterpart, thus the foreign company must itself or with the aid of consultants fill the gaps during the process.


• Consultants are experienced specialists in areas such as law, architecture, and project management that fill in the gaps in areas the foreign company or other relevant parties did not address. Lawyers help review contracts and documents and make sure they are relevant to local Chinese law. Architects assist companies with design and tend to offer more capabilities than locals. Project mangers assure the full-set of plans and specifications in regards to construction, quality, schedule, and budgets are being followed.

US Active is a leading manufacturing consulting firm, based in Shanghai, China. We assist companies, from a few million dollars in sales to multi-billion giants, with manufacturing and sourcing products throughout Asia. For more information on our sourcing and manufacturing services in China, please see our website: www.us-active.com.

Doing Business in China for Dummies has more information regarding:

• selecting contractors in China
• selecting attorneys in China
• obtaining permits in China
• establishing a business in China
• manufacturing in China