China State Construction Engineering Corp (CSCEC), in a move to fuel its "go global" commitment, inked a US$3 billion cooperation deal with the Export-Import Bank of China (China Eximbank) yesterday.
The five-year deal will help CSCEC, the country's largest construction enterprise and international contractor, further tap the overseas market in fields like engineering, infrastructure construction and energy sources development.
"Backed up by China Eximbank's long-term and steady financial support, we are more confident in competing with our international rivals," said Sun Wenjie, general manager of CSCEC.
"Our three major overseas market is Africa, mainly Algeria, South and East Asia and the United States."
CSCEC, which ranked 17th among the top 225 contractors in the world, is expected to achieve an overseas turnover of US$3.5 billion in 2005, up 12.9 percent year-on-year and accounting for one-third among its total turnover.
In fact, Chinese contractors are increasingly encouraged by government policies to venture into overseas markets.
According to an annul report from the China International Contractors Association (CHINCA), Chinese contractors signed more than US$20.7 billion worth of overseas projects from January to November last year, an increase of 43 percent on yearly basis.
The companies fulfilled an overseas turnover of about US$14.5 billion, up 28.8 percent over the previous year.
The domestic giants, including CSCEC, China Harbor Engineering Company (now a subsidiary of China Communications Construction Group), and China National Machinery & Equipment Corp, are playing an increasing role in the country's "go-out" policy.
Forty-seven Chinese contractors were recognized among the world's top 225 international contractors in 2003 by the Engineering News-Record.
The contractors' total turnover stood at US$8.3 billion, accounting for 60 percent of the nation's total in 2003.
Meanwhile, domestic enterprises began to embark on more sophisticated, large-scale and high-tech projects.
In the first 10 months of 2004, Chinese firms obtained 19 large deals with a contracted value of US$100 million each, and this number surpassed the total figure of the previous year.
Asia and Africa accounted for most of the contracts, nearly 70 percent of Chinese contractors' total contracted value.
The contractors are also attempting to diversify their businesses in more than 180 countries and regions.
The report said Chinese contractors, particularly large enterprises, have made breakthroughs in the high-end markets in the US in the past few years.
For instance, CSCEC-US won contracts for subway stations and the Marriott Hotel in New York in 2003, and the China Metallurgical Construction Corp signed contracts for a heavy rolling mill in the US in August 2004.
Despite the negative effects of the Iraq War and the 2003 SARS (severe acute respiratory syndrome) outbreak, the Asia-Pacific region remained the largest construction market in the world.
Most Asian countries and regions witnessed fast economic growth, which spurred investment in fixed assets and construction.
With an annual contractual value of about US$13 billion, Hong Kong is one of the most important overseas markets of contractors from the Chinese mainland, as the region contributes to some 19 percent of the mainland's overseas projects.
(China Daily December 29, 2005)