Contractors to see overseas business grow

The international contracting business will continue to grow in China as governments around the world expect infrastructure construction to boost local economies amid the global economic downturn, a vice minister with China's top commerce watchdog said Thursday.

Many countries are currently making a big push to develop their infrastructure, which is a good opportunity for contractors, Chen Jian, vice minister of the Ministry of Commerce (MOFCOM), said at the 4th International Infrastructure Investment and Construction Forum in Macao on Thursday.

A 2012 annual report from the Organization for Economic Cooperation and Development predicted that global infrastructure investments will be $55 trillion in the 2013-30 period.

MOFCOM data indicated that for the first four months of 2013, China's newly signed international contracts were worth $48.7 billion, a 37.9 percent year-on-year increase.

In 2013, China's international contracting business is likely to grow by around 10 percent, and it should continue growing in 2014, according to a March report sent to the Global Times Thursday by the China International Contractors Association.

The rapid growth will continue for some time, but will also raise the bar for Chinese contractors, Chen said, noting that compared with foreign competitors, they have a long way to go in terms of management and technology.

Due to insufficient understanding of foreign laws and cultures, Chinese contractors have suffered from labor disputes for a very long time, said Zhao Hui, general manager of the Beijing-based China Friendship Development International Engineering Design & Consultation Corp.

Unstable circumstances in emerging markets and some countries' insufficient policy support for Chinese firms are also big obstacles to globalization, Chen noted.

In Libya, for example, the March 2011 eruption of internal conflicts caused Chinese contractors to suspend all their projects in the country, including three China Railway Construction Corp projects worth a total of $4.2 billion.

Given such potential risks, the Chinese government has increased control over loans for overseas construction projects, an industry insider told the Global Times Thursday on condition of anonymity.