New rules for overseas Chinese contractors

Thursday, January 13, 2011

BEIJING - China will soon issue a set of guidelines for its contractors working abroad as part of an effort to help improve the brand value of its companies.

The rules will help strengthen the efforts in improving and regulating the performance of China’s overseas project contractors, said Vice Minister of Commerce Chen Jian Wednesday.

“Chinese overseas project contractors should strive to maintain a balance between quantity and quality in developing overseas projects. So they can build their brand and forge their edges in the long-term,” Chen was quoted as saying by China Daily.

He said the government will also set up a mechanism to provide information service to the companies to easily adapt to local customs and avoid “cultural conflicts”.

“New rules will be implemented by the government to complement the current regulation system, so that all Chinese companies will abide by the rules and fulfil their share of social responsibilities,” he said.

He added that Chinese companies will have more opportunities abroad as the global industrial restructuring is underway and emerging economies are keen on improving their infrastructure.

But rising number of labour disputes has prompted the government to step up efforts to enhance the regulation of the companies’ behaviour overseas, he said.

In April last year, the commerce ministry in collaboration with six government agencies and over 200 Chinese embassies launched an eight-month special inspection of more than 2,700 projects at home and abroad, according to the daily.

China’s overseas project-contracting business maintained a rapid growth for the last few years and played an important role in the country’s economic growth. It now absorbs over 3,000 companies, with projects scattered all over the world.

According to the ministry data, agreements worth over $130 billion were signed in 2010, up three percent year-on-year. The annual turnover jumped by 16 percent year-on-year to over $90 billion.

Despite this rapid development, Chinese companies have only a limited market share in the global market and there is a considerable room for future expansion, Chen said.

He cautioned that protectionist barriers by some governments to reject Chinese companies and political instability in some countries will prompt security concerns for Chinese companies.

Filed under: Economy

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