Sub-prime woes are taking their toll on the banking sector, with repercussions for world stock markets and a threat of widespread recession.

Cash-rich China, on the other hand, has $1.4 trillion in currency reserves and aims to invest in 50 large enterprises around the world. They have already acquired multi-billion-dollar stakes in US banking and private equity companies and are poised to bail out other major banking corporations. It is understood that Chinese investment has financed the take-over of a well-known major international construction company faced with serious trading difficulties.

While in Beijing in December, I had dinner with Yi Jun, president of CIOB China. That day he had been transforming the China State Construction Engineering Corporation from the massive state-owned construction organisation into a share-based company, part of which will be floated on the Shanghai Stock Exchange this spring.

Yi Jun is now president of CSCEC. He is intelligent; a youthful 47-year-old with excellent English and a global outlook; a communist turned capitalist overnight.

Earlier that day I had visited two of the most complex steelwork projects to be found anywhere in the world. The first was the China Central Television Centre, an idiosyncratic Z-shaped building of European design. The building will stand over 240m high and will be one of the largest buildings in the world, exceeding 500,000m2.

The other was the Olympic ‘birdnest’ stadium. This stunning structure will top the international media charts in 2008 and the image will repeatedly appear on television and in newspapers in billions of homes in every country.

The seesaw of economic power began to tilt towards the east in 2007 and will accelerate in 2008. China will dominate the airwaves, buoyed on by the Olympics and Chinese construction will be showcased.

The capabilities of China’s engineering constructors will be there for the world to see. CIOB members in China are at the forefront of this movement and are catalysts for change.

The Chinese construction industry is far from perfect but it cannot be ignored. It is reported that Chinese companies signed more than $5.5bn of construction related contracts in Europe and the US in 2006.

They are fast acquiring the financial, legal, management and technology know-how to compete with western companies on their own turf.

What will that $5.5bn have grown to by 2012 when London showcases its own Olympic Games?

Source

Construction Manager

Postscript

Michael Brown is deputy chief executive of the CIOB.

Chris Blythe is on holiday