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Conflicting legal regimes govern construction projects
With China's continuing economic development, an increasing number of foreign companies wish to participate in the Chinese construction market, and a considerable number of foreign companies are in fact engaged in construction and design activities in China.

Unfortunately, however, there are conflicting regulatory regimes governing project management in China.

One regime is overseen by the Ministry of Housing and Urban-Rural Development (MOHURD), while another regime is controlled by the National Development and Reform Commission (NDRC).

As the government authority in charge of regulating and supervising the construction industry in China, MOHURD issued the Provisional Measures on Construction Project Management and the ‘Guidance Opinion on the Establishment of Project Management Enterprises by Large-Scale Engineering Supervision Enterprises.

According to the Provisional Regulations on the Approval of Foreign-invested Projects, all foreign-invested projects must be approved by the NDRC or its local counterparts (for projects under US$100 million) as the first stage in governmental approval.

To further regulate the engineering consulting services market, NDRC issued the Measures for Recognizing the Qualification for Engineering Consulting Entities (Circular 29).

According to Circular 29 , any company engaging in engineering consulting services in China must legally hold an ‘Engineering Consulting Enterprise Qualification Certificate' issued by the NDRC and must practice within the profession and service scope stipulated by the Certificate.

The last three subcategories under ‘engineering project management,' above, certainly have some overlap with ‘project management' as prescribed in Circular 200 by MOHURD.

It is not clear how the overlap between MOHURD's requirements under Circular 200 and the NDRC's requirements under Circular 29 and the Implementation Notice is being managed.

Although it is not uncommon for there to be some ambiguities in scope of responsibility among different Chinese authorities, this duplication is far from satisfactory.

Mondaq has a very full, complete and readable article on the subject.

It ends its report: ‘In our view, the ambiguity of the various qualification regimes under MOHURD and the NDRC only adds to the uncertainty, and it seems to us that if companies undertaking project management are not properly qualified, there is a risk that their performance may be challenged, even where they have provided good consulting services to their clients.'