Despite the various legislative measures, inclusive of WTO provisions, taken by the Chinese Government to remove barriers and improve construction quality and procedures related to government project bidding and tendering, there is room for improvement.
The licensing of professionals has been a barrier for foreign firms to establish a permanent presence in China. Currently it is difficult for foreign firms to obtain such licenses. Moreover only licensed firms in China are allowed to "stamp" drawings as official.
New tendering and bidding regulations have not been widely adopted and lack enforcement power. Many organizations are resisting the implementation of the new tendering and bidding regulations, and as a result, corruption remains a significant problem due to the continued lack of transparency in the current tendering and bidding procedures. Foreign contractors also face severe partnering and bidding restrictions. They are hindered by numerous obscure or unpublished restrictions and procedures that result in costly delays.
Firms are not allowed to specify products by name in their designs allowing contractors' substantial latitude to substitute inferior materials without the written approval of the designer or owner and results in correspondingly lower construction quality.
Lastly, many Chinese contractors routinely subcontract entire projects to other contractors without notifying project owners or representatives. Communication and contract problems ensue, and situations where the contractor actually doing the work has insufficient knowledge of the project requirements or lack the compensation needed to perform the work in a professional manner.
