The present situation and prospect of China's overseas contracted projects

With the deepening of global economic integration, China's comprehensive national strength is constantly improving. While the state encourages international engineering cooperation, China's foreign engineering business is developing rapidly, its scale is also expanding day by day, and its international competitiveness is significantly improved. According to the statistics of the Ministry of Commerce, from October to October 2117, the turnover of China's foreign contracted projects was US$ 33.2 billion, up by 34.6% year-on-year, and the newly signed contracts were US$ 62.2 billion, up by 13% year-on-year. It is expected to exceed US$ 71 billion in the whole year. That is to say, in 2116, China signed billions of large-scale international projects in succession, which made the amount of new contracts signed in that year increase abnormally. In 2117, China's foreign contracted projects still maintained a relatively fast growth rate, which also indicates that China's foreign contracted projects have entered a period of steady and rapid development. With the rapid expansion of the overall business and scale, the scale and grade of China's foreign contracted projects are also constantly improving, which is the overall development trend.

the development prospect of the overseas contracted engineering market

the overall development trend of the overseas contracted engineering market is that opportunities outweigh challenges and the market potential is great, but there are still many problems. The rapid development of China's foreign contracted projects in recent years is undoubtedly inseparable from two factors. First, the state has paid more and more attention to developing foreign projects, and its support policies and related measures have been continuously improved, and its financial, financial and diplomatic support has been continuously increased. The second factor is the rapid development of the international project contracting market itself, which provides a rare development opportunity for Chinese enterprises to vigorously carry out international project contracting business. The next decade or so will not only be an important strategic opportunity period for our country's economic development, but also an important strategic opportunity period for our international project contracting industry. At present, our government is signing a framework agreement on infrastructure construction cooperation with some foreign governments, as well as a package agreement on economic cooperation. At the same time, our government is also making five-year infrastructure plans with neighboring countries and other countries, so the international market has great potential, which also provides good development opportunities for Chinese enterprises.

from the perspective of global market, the process of economic globalization and regional economic integration has been further accelerated, the economic ties between countries and regions in the world have become closer and closer, and industrial transfer and division of labor have been continuously strengthened, which has effectively stimulated the demand for infrastructure construction in various countries. After nearly 25 years of stagnation, developed countries have seen a new trend of transforming and expanding subways and power generation, while emerging countries that have benefited from globalization and rising energy prices have risen one after another. The proportion of GDP of these emerging countries in the world has risen from 39.7% in 1991 to 48% in 2116, and their status has improved significantly. Emerging countries invest more in infrastructure, with an annual growth rate of about 21%, while the United States only has 5%-6%. According to analysis, emerging countries invest about $1 trillion in infrastructure construction, while developed countries invest about $511 billion in infrastructure construction. Because roads, ports, airports and other large-scale infrastructure construction are usually in a cycle of 21 to 21 years, it is foreseeable that in the future, the international contracted engineering market will be. This is our analysis based on the information released by some authoritative organizations in the world. From the perspective of regional distribution and development, Asian and African markets are still our main markets and traditional markets. These countries are now experiencing extraordinary development, and the scale of the construction market is constantly expanding, far higher than the average growth level of the world economy. No matter the BRIC countries-Brazil, Russian, Indian, China, or the five countries-Vietnam, Indonesia, South Africa, Turkey and Argentina, the economies concerned are growing strongly.

The overall development characteristics of China's foreign contracted projects

First, the scale is constantly expanding.

in recent five years, China's international engineering contracting business volume is equivalent to the sum of the previous 21 years. Judging from the development speed, the overall scale is growing at a rate of 31% every year, and the speed is accelerating, and the grade is also constantly improving. In the past, most of the projects we contracted overseas were low-end projects focusing on construction and civil engineering, which means that foreign companies were unwilling to do it. We contracted the difficult projects in China Company, earning hard money. Now we are engaged in the business of contracting overseas projects, and the grade has been greatly improved. One of them reflects the strong technical strength of Chinese companies, and the management level of enterprises in China and other aspects have also increased greatly. In the past, we contracted. Now hundreds of millions of projects are not surprising in the whole business statistics. From the perspective of development fields, we used to be single in building construction. Now, apart from building construction and road traffic, we have developed into many fields such as petrochemical industry, industrial production, power engineering, mine construction, electronic communication, environmental protection, aerospace, nuclear energy, medical and health care, consulting services, etc. In the process of our development, the scale is constantly expanding, the speed is constantly accelerating, and the grade is constantly improving.

Second, the project contracting mode is undergoing major changes.

our enterprises have gradually realized that contracting with capital and obtaining engineering construction projects through investment are the main modes of contracting international projects at present, so they actively explore the combination of engineering and investment to promote the high-end development of foreign engineering contracting business through cooperation with overseas, real estate development and resource cooperative development. More and more China enterprises have paid more attention to planning, exploration, design, consulting and other fields, and further expanded their foreign engineering contracting business by developing high-end business. According to preliminary statistics, at present, general contracting projects have accounted for 52.6% of China's total foreign bidding projects, and more than half of the projects are carried out by enterprises in the form of general contracting, especially the general contracting projects have increased significantly, which has greatly promoted the export of domestic equipment in China. BOT and other financing projects have begun to achieve certain results. In the past two years, China's foreign contracted project management enterprises have started to enter the high-end business field of foreign contracted projects in combination with the development of mineral resources and the development and construction of residential quarters, and have achieved certain results. For example, the Megaport Power Station in Indonesia is a project made by China National Chemical Engineering Corporation in the way of BOOT. After the Megaport Power Station project entered the operation stage, the benefits were very good. More and more companies have seen that high-end projects and high-end markets can bring huge profits to enterprises, and everyone is actively exploring.

thirdly, the global market is expanding.

at present, the development of our country's foreign contracted engineering business has spread all over nearly 211 countries and regions around the world. That is to say, it has spread all over the world, even in some countries that have not established diplomatic relations. In addition to the traditional markets such as Asia and Africa, which still maintain a stable dominant position (Asia and Africa account for 81% of our newly signed contracts), in Latin America, Europe and North America, China's overseas contracting business has also shown a rapid growth trend, the market has developed in a more diversified direction, and the market structure has been further optimized. As Chinese companies have successively signed large projects in Africa, the newly signed contracts in the African market have an obvious growth trend. In 2116, the African market surpassed the Asian market for the first time, and the newly signed contracts reached 28.74 billion US dollars. For the first time, the newly signed contracts in Latin America exceeded those in Europe, reaching $4.25 billion. According to preliminary statistics, the African market is still the market with the best development prospects. Judging from the characteristics of market distribution, Asian market and African market are still the main markets for our foreign contracted engineering business. Over the years, with the convening of the China-Africa Forum and the continuous expansion of our economic cooperation with African countries. Many countries, in particular, have been at war all the year round. Now, after the armistice, there is a huge market demand and great market potential for infrastructure construction. In addition, these countries have some oil resources, mineral resources and other resources. We have carried out economic cooperation and infrastructure construction cooperation, and the two sides are highly complementary. They have project needs, resources but lack funds and construction strength. We have construction strength and funds, but lack resources. In this case,

Fourth, the number of enterprises undertaking foreign contracted projects is constantly expanding.

after decades of development, it has basically formed a team composed of many industries, which can compete with foreign big contractors. In 2117, 49 enterprises in China entered the ranks of the world's largest 225 international contractors. In 2116, these 49 enterprises completed foreign contracted projects with a turnover of US$ 16.29 billion, up 61.8% year-on-year, accounting for 54% of the total overseas turnover of China's foreign contracted enterprises. The concentration of the engineering contracting industry has been further strengthened, and the competitiveness of large enterprises has been further improved. At present, the competitive advantages of Chinese companies are not only reflected in labor cost and price, but also in technology, complete sets of equipment, resource integration and project management, which have been widely recognized around the world. In particular, Chinese enterprises have undertaken a large number of infrastructure projects in some developing countries, which have met the urgent needs of local development and people's lives, and have been supported by local governments and people, and have also had a very good impact. Since 2116, more and more countries, including the governments of developed countries, have expressed their desire to cooperate with China companies and invite China companies to participate in infrastructure construction in these countries. Therefore, our current development situation is a very good situation and a very rare development opportunity.

Introduction to several key regional markets

In Africa, the sustained high energy prices such as oil and minerals have led to rapid economic development, and the GDP growth rate of some African countries has reached more than 41%, which has provided favorable conditions for vigorously developing infrastructure, such as Algeria, Nigeria, Equatorial Guinea, Angola and other markets. Contracted projects are developing rapidly, mainly in infrastructure fields such as roads, houses and hydropower. For example, the Nigerian railway project with a contract value of more than 11 billion US dollars was finally won by China Earth Corporation. The Algerian $6.7 billion expressway project was also won by a joint venture of CITIC and China Railway Group. In Africa, the most important feature of cooperation is the economic cooperation package agreement, which not only exchanges resources for engineering cooperation, but also is an investment model negotiated between the two governments, which has surpassed other countries in carrying out such business in Africa.

in the Asian market, which is also experiencing a rapid development stage, such as India, Vietnam, Pakistan, the Philippines and other countries, the investment in infrastructure construction is huge. For example, in India, in the next few years, the annual investment in electric fields, airports and other infrastructure areas will reach 3.5% of GDP. It is estimated that in the next few years, the investment in infrastructure areas such as transportation, urbanization, housing, roads, ports and airports will reach 511 billion US dollars, so more planning will be made in the future investment process. According to the analysis, the actual growth rate of Vietnam in 2117 can reach 8%. The main problem now is that infrastructure construction is lagging behind, and the investment centered on infrastructure construction is expanding continuously. This is the characteristic of the Vietnamese market. In order to achieve the goal of becoming a modern industrial country by 2121, more than 11 billion US dollars are invested in industrial projects and infrastructure construction every year. According to our preliminary statistics, in 2117, Chinese enterprises' bidding projects in Asia accounted for 36% of the total bidding projects.

The Middle East market is another important regional market for international contracted projects. With the soaring oil, these countries are implementing vigorous development plans. According to the forecast of the International Monetary Fund, the investment plan of the six Gulf countries will reach 711 billion US dollars from 2116 to 2111, and according to the Gulf news reports, the total value of the planned construction projects of the Gulf Cooperation Council, Iran and Iraq is about 1 trillion US dollars. Among them, the United Arab Emirates accounts for one-third of the market, about 294 billion US dollars, Kuwait and Saudi Arabia are the second and third respectively, and the total value of planned construction projects is 211 billion US dollars and 211 billion US dollars respectively. The whole region has huge demand for construction projects. At present, in the Middle East, including countries like Iraq, many companies are paying close attention to it. At the same time, many projects have been carried out in the United Arab Emirates, Saudi Arabia and Kuwait. They have signed a government framework agreement with Saudi Arabia and provided a list of business leaders engaged in infrastructure construction, which covers many fields such as railways, highways, housing construction, electric power and chemical engineering, and has great market potential.

Looking at Europe again, from the perspective of Eastern Europe, the growth rate of buildings in many countries in Eastern Europe is above 7%, and it will continue to grow in the next few years. After joining the EU, Poland, Hungary, Romania and other countries have received a lot of financial assistance from the EU, and their investment in infrastructure construction has greatly increased, so large-scale projects urgently need to introduce new builders. With the economic development of Russia, there is a great demand in the fields of residential construction, non-residential construction and infrastructure construction, and domestic construction engineering enterprises are far from meeting the needs of their infrastructure construction, which provides huge business opportunities for Chinese enterprises.

In addition, in South America, Latin America, Brazil, Argentina, Chile and other countries, the demand for infrastructure construction has increased. For example, Brazil is carrying out infrastructure construction in a big way, and many of our companies have already participated in some projects in Brazil, and some of them have already started construction. When we visited Venezuela, the government organized a discussion between Venezuelan enterprises and our China enterprises, and the desire for cooperation was very strong. Venezuela is rich in oil resources and has many projects, but it lacks builders, which is also a good opportunity for Chinese enterprises.

problems and challenges

in the face of unprecedented development opportunities, our foreign engineering has made great achievements and progress, but some problems still exist, and some outstanding problems should be highly valued.

First, the overall quality of business development is not high

At present, the growth mode of China's foreign contracted engineering industry is still extensive, the growth of turnover mainly depends on the increase of the number of projects, and the improvement of business quality is not obvious. Some enterprises have low management level and poor profitability, and there are blind pursuit of the improvement of project number and neglect of project benefits. Enterprise's comprehensive service ability, financing ability and financial product management ability are not strong. According to the statistics of bidding in 2117, enterprises are mainly cash projects with traditional funds. According to statistics, our national enterprises bid for projects of international financial institutions, accounting for 12.4%, and projects raised by owners and local governments account for 65.9%. Together, they account for 78.3% of all our bidding projects, and the proportion of contracted projects with capital is relatively low, which is different from that of international projects, which account for 65%. In addition, most enterprises are concentrated in the low-end and low-profit construction field of the industrial chain, and basically rely on cost and price to compete internationally. This is a difficulty and challenge in developed countries and regions, and it is a prominent problem at present. Of course, this situation is gradually changing, and the Chamber of Commerce has been pushing enterprises to develop into high-end markets and high-end businesses.