“Decrees 113 and 114, respectively, regulate how contractors and design firms operate in China. They must either set up wholly foreign-owned construction and engineering design enterprises or establish joint ventures with a registered Chinese firm (ENR 12/22/03 p. 14). Under 113, contractors now must post $36 million in registered capital to obtain a "special class" license and are limited to contracts up to five times that amount. Bonding or financial guarantees from corporate parents outside of China are not recognized.
The decree also requires firms to maintain a minimum staff of 200 to 300 professionals and between 12 and 20 project managers registered with the government. Foreign technical and staff managers must reside within China for at least three months during the year. And they must use a Chinese design institute licensed in the project’s market sector.
For design firms to obtain a Class A license under Decree 114, one-quarter of an 80-person technical staff must be foreigners. A percentage of foreign technical staff must be PRC-registered engineers and key foreign technical staff must live in China for at least six months each year. A foreign firm can only collaborate with a Chinese design firm licensed to work in a particular sector and the Chinese firm must be party to any contract signed with an owner. That means full project pricing must be disclosed, an item westerners say can be very sensitive.“
