Property / Construction

Hong Kong's expertise much in demand

by Ella Lee

Cheung Siu-lun, managing director, Hsin Chong Construction Company Ltd

There is no shortage of labour to work on building projects in China but, when it comes to hiring experienced construction managers, the industry still looks to Hong Kong

When first-time visitors to Hong Kong are asked to give their impressions of the city, they often use adjectives like "futuristic" and talk about the skyscrapers, transport systems and infrastructure links which are nothing like what they have seen at home.

This, in many ways, can be taken as an unspoken tribute to the expertise and vision of the local construction industry. Therefore, when visitors to the fast-developing cities in China now regularly describe what they see as "just like Hong Kong", it should be no surprise to learn that Hong Kong construction companies and their senior personnel are playing an important role in many of the mainland's most prestigious projects.

With their abundant labour force and trained on-site staff, several well-established government-run construction giants will lead the way in China, according to Cheung Siu-lun, managing director of Hsin Chong Construction Company Ltd, one of Hong Kong's top five construction companies. "Just for technical employees, one of the major players has more than 220,000 people, which exceeds the total number of practitioners in the Hong Kong construction industry," says Mr Cheung, who oversees his company's mainland operations. As a result, he thinks it will always be difficult to compete directly with these state-owned enterprises.

However, when assessing the role Hong Kong companies can play on the mainland, Mr Cheung highlights the field of construction management. Traditionally, projects in China entail a high risk of non-payment and developers usually do not plan cash flow and project financing as well as they should. This can result in procurement problems, unfinished work and delayed completions.

Although the Chinese government has recently tightened requirements and stipulated that developers must have readily available no less than 30 percent of the capital for projects that last over a year, there is still room for improvement. Bringing in Hong Kong expertise in construction management can help improve procurement and use of resources, the formation of financial and technical partnerships and quality management of the product and process.

Essential skills

"Mainland companies have limited knowledge about contract management and compliance," says Mr Cheung, "but these are essential parts of the modernisation process and are international business practices." Although a "jian li" (a third party consultant) is always appointed to be responsible for ensuring compliance with national standards, this may not be enough since certain contracts may require higher standards.

"With their record in fast-track projects, Hong Kong companies can also introduce new technologies and equipment in China which will support the rapid implementation of large-scale projects," notes Mr Cheung.

To undertake construction work in China, a contractor's licence is needed. The mainland government standardised licensing requirements for local and overseas contractors in April 2004. However, since previous experience in mainland projects is one of the key criteria in the application, things are not completely straightforward.

Fortunately, Hong Kong companies can benefit from CEPA. This allows them to run wholly-owned operations on the mainland and recognises their previous construction experience in Hong Kong.

"To run a business in China, localisation is a must," says Mr Cheung. "There is abundant local talent and it keeps costs down. For example, an experienced Chinese engineer might get around HK$100,000 a year while a similar Hong Kong professional might expect up to ten times more."

In view of this, Hsin Chong mainly appoints Hong Kong staff to senior project management positions on the mainland. An engineering degree and ten years' practical experience are usually required for such posts while those with six years' experience can work as project coordinators. Previous China experience is a definite advantage.

"In general, Hong Kong employees are proactive, disciplined and have good professional ethics and all-round skills," says Mr Cheung. "They also excel with their international exposure."

While the trend towards localisation will continue, senior Hong Kong managers are unlikely to be replaced. "We intend to cultivate our corporate culture and implement a Hong Kong management style in our mainland operations," Mr Cheung explains. He points out that Hong Kong expatriates must learn about and incorporate local practices but also uphold the company's high ethical standards.

Valuable experience

The prerequisite for working in China is a willingness to be stationed there and commitment to long-term development. "One must be open to change in work, lifestyle and your social network," says Jase Fung, the group's senior human resources and administration manager in Beijing.

Since any employee being relocated has to start from scratch, the company provides full support. They give allowances, assistance in finding accommodation plus medical and educational services. "A tailor-made package is designed for individual staff," says Ms Fung.

With the slowdown in property development and building activities in Hong Kong, contractors are steadily shifting their focus to the mainland market. Therefore, engineers have the chance to gain broader exposure and increase their experience of the industry in large-scale, world-class projects across the border and employers are encouraging them to seize these opportunities.

Taken from Career Times 28 May 2004
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