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Craig
Allen
Minister counselor for Commercial Affairs,
United States Embassy, Beijing
Distinguished Guests, Ladies and Gentlemen:
It is an honor to participate in the opening
of the 2006 Global Construction Summit.
Holding this event in Beijing, in the midst
of one of feverish preparations for the 2008 Olympic Games, is very
useful and appropriate. Guests from outside of China will have a
chance to see with their own eyes one of the biggest construction
booms in recent history. Chinese guests will have an opportunity
to meet companies from around the world to discuss the industry's
most recent trends.
The Construction industry will be one of the
pillars of China's Eleventh Five Year Plan. Domestic growth is expected
to average approximately XX percent over the next five years. This
growth will lead to higher demand for all types of building materials,
heavy equipment and services.
Through increased international cooperation,
China will ensure that its infrastructure is world class and can
support world-class companies competing effectively in a global
market.
I am pleased to note that Chinese construction,
architectural and engineering companies are also taking every advantage
of global opportunities. They are investing heavily in projects
outside of China, including the United States. In the global market,
we welcome Chinese companies' many contributions.
In the middle of one of the world's great
construction booms and growing global competition from Chinese companies
in overseas markets, it is somewhat ironic that many foreign companies
that wish to invest in China feel that they are facing very serious
barriers to entry. This is especially true in the architecture,
design, engineering, planning and project management sectors.
By December of this year, China is supposed
to meet all of its WTO commitments, which include allowing wholly
foreign-owned enterprises to apply for design licenses. In preparation
for this I would note that implementation rules for regulation 114
have not yet been issued. This makes it impossible for foreign companies
- even some of the world's most renowned companies - to legally
engage in project management services in China.
In addition, overly high capitalization rates
and extremely complex rules concerning the composition of a company's
staff have effectively inhibited foreign investment in the sector.
Further, inconsistent implementation of many overly complex rules
by provincial authorities has contributed to cost and uncertainty
for foreign companies.
I would note that there are far too few foreign
architecture, design, planning, construction and engineering companies
that have the legal authority to operate in China, as they do around
the world. It is not in China's interest to artificially constrain
foreign participation in China's construction industry by a welter
of burdensome regulation that is strictly enforced against foreign
companies only.
In general, most foreign participants in China's
construction market would hope that forthcoming regulation is more
practical, fairly implemented and designed to permit meaningful
participation by foreign companies in China's market.
I hope that this conference is a venue to
discuss some of these problems in practical and friendly manner.
At the end of the day, I am optimistic that
the Ministry of Construction and other stakeholders in China's future
will see the value of greater foreign-Chinese cooperation in China's
domestic construction industry.
In closing, I want to thank the Ministry of
Commerce, the Ministry of Construction and the Beijing Municipality
for their support of the 2006 Global Construction Summit. I wish
you all only the best of luck in forming new relationships that
will contribute to our mutual prosperity. Thank you.
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