The exposure of apartment buildings with serious quality problems one after another points to the prevalent corruption in the construction industry. The document released by the State Council last week to launch a two-year crackdown on serious malpractices in the real estate sector further underscores how serious the problem is.
A new apartment building collapsed in Shanghai in June. Two residential buildings became seriously tilted after heavy rains in Chengdu, southwest China's Sichuan province; a two storeyed-building collapsed in the rainstorm in Shijiazhuang, Hebei province; walls of several residential building developed cracks in Nanjing in Jiangsu province; and, a bridge under construction collapsed in Shaanxi province. All these occurred in less than two months.
Undoubtedly, it is not lack of technology that has caused these quality problems. With the technology to build such structures as the Bird's Nest or 100-storeyed skyscrapers, it should be a piece of cake for Chinese construction companies to build multi-storeyed residential buildings of sound quality.
Neither can it be lack of money that resulted in inadequate input of construction material. Since they are commercial buildings, the money that house buyers have paid should be more than enough for their homes to be built with quality steel and cement.
Therefore, the only possibility could be the construction companies' problems or that funds were siphoned off in the process of the projects being subcontracted several times before being built or during the transactions from getting the land to the approval of the projects.
Both point to corruption in the industry. Those in a position to approve construction projects may have received kickbacks for doing their job, as do those in a position to sanction loans. Big construction companies subcontract projects to smaller ones to collect profits without getting directly involved in the projects, and smaller ones follow suit.
Such devious deals are found to be behind many construction mishaps. And, a large percentage of corrupt officials nabbed have been found to have got bribes from real estate developers. It is no exaggeration to say that corruption has contributed tremendously to the bubble in the real estate market.
More worrisome is the fact that both local governments and property developers in many cases are cashing in on the real estate sector in whatever way they can. The former increases its income by selling land to the latter and the latter maximizes profits by raising prices and lowering investment in housing projects. When the problem of housing quality is exposed, many believe local authorities, who should play the role of watchdogs, might turn out to be protective umbrellas for developers.
That explains why the buildings with quality problems are cleared by governments; and, also why few developers are incriminated for the problems in projects they developed.
Yet there lies the danger of the government losing credibility, as borne out by the frequent mass protests against arbitrary occupation of land or demolition of residential houses. It is hoped that the campaign being launched now will keep the situation in check.
(China Daily August 27, 2009)