Project Management in China
Softskills as Succes Factors
					
	
		©2007
		Bachelorarbeit
		
			
				83 Seiten
			
		
	
				
				
					
						
					
				
				
				
				
			Zusammenfassung
			
				Inhaltsangabe:Abstract:	
This thesis gives an overview of Project Management in the Peoples Republic of China (PRC), with regard to soft skills as success factors. The reason for writing my thesis in China was to experience the effects of globalisation with a practical orientation. China seemed to me the most interesting and challenging country for the assignment. To learn more about the success factors which are essential for the collaboration with the Chinese was a further motivation for me to write this work in China.
During my assignment I learned that soft factors and social competence are key requirements to be accepted and successful in daily business. The intercultural difference and the social behaviour of the Chinese are very different from what Westerners are used to at home. To handle these differences, soft skills become essential for successful collaboration.
After introducing the background knowledge of Project Management in China, several situations which require soft skills are addressed and discussed. Not only ways to improve our own soft skills are stated but also ways to recognise and react to certain situations in the dialogue with others. The role of soft skills is extremely important in modern-day business life and in all divisions of a company. With the following work I want to arouse the readers interest and awareness of soft factors in business and convince him of the importance of such a fundamental topic.
Annotation: This work is written in British English with the exception of original quotations. Please note that he, his etc. refer to both genders. Inhaltsverzeichnis:Table of Contents:
ABSTRACTII
ACKNOWLEDGEMENTSIII
TABLE OF CONTENTSIV
LIST OF FIGURESVI
LIST OF TABLESVII
ABBREVIATIONSVIII
1.INTRODUCTION1
1.1PROBLEM STATEMENT - CHANGING CHALLENGES ABROAD1
1.2PROPOSED SOLUTION - SOCIAL AND PERSONAL SKILLS FOR PROJECT SUCCESS2
1.3OBJECTIVE AND APPROACH OF THIS STUDY3
2.PROJECT MANAGEMENT IN CHINA4
2.1BACKGROUND INFORMATION ABOUT CHINA4
2.1.1General overview4
2.1.2Aspects of culture and mentality of the Chinese people4
2.1.3Facts and figures about China7
2.1.4China's construction business10
2.1.5Environmental problems in China12
2.2IMPORTANT CONCEPTS OF PROJECT MANAGEMENT14
2.3THE CONSTRUCTION PROJECT MANAGEMENT ENVIRONMENT15
2.4THE CONSTRUCTION PROJECT (MANAGEMENT) PROCESS17
2.5THE COMPETING OBJECTIVES OF PROJECT MANAGEMENT18
2.5.1Project Quality Management18
2.5.2Project Cost […]
	This thesis gives an overview of Project Management in the Peoples Republic of China (PRC), with regard to soft skills as success factors. The reason for writing my thesis in China was to experience the effects of globalisation with a practical orientation. China seemed to me the most interesting and challenging country for the assignment. To learn more about the success factors which are essential for the collaboration with the Chinese was a further motivation for me to write this work in China.
During my assignment I learned that soft factors and social competence are key requirements to be accepted and successful in daily business. The intercultural difference and the social behaviour of the Chinese are very different from what Westerners are used to at home. To handle these differences, soft skills become essential for successful collaboration.
After introducing the background knowledge of Project Management in China, several situations which require soft skills are addressed and discussed. Not only ways to improve our own soft skills are stated but also ways to recognise and react to certain situations in the dialogue with others. The role of soft skills is extremely important in modern-day business life and in all divisions of a company. With the following work I want to arouse the readers interest and awareness of soft factors in business and convince him of the importance of such a fundamental topic.
Annotation: This work is written in British English with the exception of original quotations. Please note that he, his etc. refer to both genders. Inhaltsverzeichnis:Table of Contents:
ABSTRACTII
ACKNOWLEDGEMENTSIII
TABLE OF CONTENTSIV
LIST OF FIGURESVI
LIST OF TABLESVII
ABBREVIATIONSVIII
1.INTRODUCTION1
1.1PROBLEM STATEMENT - CHANGING CHALLENGES ABROAD1
1.2PROPOSED SOLUTION - SOCIAL AND PERSONAL SKILLS FOR PROJECT SUCCESS2
1.3OBJECTIVE AND APPROACH OF THIS STUDY3
2.PROJECT MANAGEMENT IN CHINA4
2.1BACKGROUND INFORMATION ABOUT CHINA4
2.1.1General overview4
2.1.2Aspects of culture and mentality of the Chinese people4
2.1.3Facts and figures about China7
2.1.4China's construction business10
2.1.5Environmental problems in China12
2.2IMPORTANT CONCEPTS OF PROJECT MANAGEMENT14
2.3THE CONSTRUCTION PROJECT MANAGEMENT ENVIRONMENT15
2.4THE CONSTRUCTION PROJECT (MANAGEMENT) PROCESS17
2.5THE COMPETING OBJECTIVES OF PROJECT MANAGEMENT18
2.5.1Project Quality Management18
2.5.2Project Cost […]
Leseprobe
Inhaltsverzeichnis
Christian Wolff 
Project Management in China 
Softskills as Succes Factors 
ISBN: 978-3-8366-0745-2 
Druck Diplomica® Verlag GmbH, Hamburg, 2008 
Zugl. Hochschule für Technik (HFT Stuttgart), Stuttgart, Deutschland, Bachelorarbeit, 
2007 
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Printed in Germany
Abstract 
I
Abstract 
This thesis gives an overview of Project Management in the People's Republic of 
China (PRC), with regard to soft skills as success factors. The reason for writing my 
thesis in China was to experience the effects of globalisation with a practical orienta-
tion. China seemed to me the most interesting and challenging country for the assign-
ment. To learn more about the success factors which are essential for the collaboration 
with the Chinese was a further motivation for me to write this work in China.  
During my assignment I learned that soft factors and social competence are key re-
quirements to be accepted and successful in daily business. The intercultural difference 
and the social behaviour of the Chinese are very different from what Westerners are 
used to at home. To handle these differences, soft skills become essential for successful 
collaboration. 
After introducing the background knowledge of Project Management in China, several 
situations which require soft skills are addressed and discussed. Not only ways to im-
prove our own soft skills are stated but also ways to recognise and react to certain situa-
tions in the dialogue with others. The role of soft skills is extremely important in mod-
ern-day business life and in all divisions of a company. With the following work I want 
to arouse the reader's interest and awareness of soft factors in business and convince 
him of the importance of such a fundamental topic. 
Annotation: This work is written in British English with the exception of original quo-
tations. Please note that `he', `his' etc. refer to both genders.  
Keywords in alphabetical order 
 
China 
 
Competitive factors (flexibility, adaptability, quality and cost) 
 
Globalisation 
 
Human factors  
 
Intercultural competence 
 
Project Management 
 
Soft Skills  
Acknowledgements 
II
Acknowledgements 
I would like to thank everyone who has contributed to this thesis, each one from his or 
her unique perspective and expertise. 
By finishing the thesis, I am successfully graduating and receiving my bachelor degree. 
I would like to thank the University of Applied Sciences Stuttgart for giving me a broad 
and well founded education in the field of Business Management.  
Special thanks go to Professor Hensler for the support and data he gave me and for the 
supervision of my thesis. Furthermore, I would like to acknowledge Winfried Mayer 
acting as co-supervisor.  
For giving me the opportunity of writing my thesis, I would like to thank TKS 
Bauplanung GmbH, especially Winfried Mayer. He also gave me the chance for the 
assignment in China as the foundation for this thesis. The stay in China has been a great 
inspiration for my thesis and even more benefit for my personal development.  
The greatest acknowledgements go to my parents who always supported me during the 
stay in China. Without their help, my stay abroad and the creation of this thesis would 
never have become reality.  
Finally I would like to thank the proof-readers, especially Michael Levene as well as all 
further persons, who are not mentioned by name. 
Table of contents 
III
Table of contents
Abstract...I 
Acknowledgements ... II 
Table of contents ...III 
List of figures... V 
List of tables ...VI 
Abbreviations ... VII 
1  Introduction... 8 
1.1  Problem statement  changing challenges abroad... 8 
1.2  Proposed solution  social and personal skills for project success... 9 
1.3  Objective and approach of this study ... 10 
2  Project Management in China ... 11 
2.1  Background information about China ... 11 
2.1.1 General 
overview ... 11 
2.1.2  Aspects of culture and mentality of the Chinese people ... 11 
2.1.3  Facts and figures about China ... 14 
2.1.4  China's construction business ... 17 
2.1.5  Environmental problems in China... 19 
2.2  Important concepts of Project Management... 21 
2.3  The construction project management environment ... 22 
2.4  The construction project (management) process... 24 
2.5  The competing objectives of Project Management ... 25 
2.5.1  Project Quality Management... 25 
2.5.2  Project Cost Management ... 27 
2.5.3  Project Time Management ... 29 
3  Design and performance of financial project controlling... 31 
3.1  Presentation of TKS Bauplanung GmbH ... 31 
3.2  The MT construction project  brief description... 32 
3.3  Analysis of the project's current financial structure... 36 
3.4  Developing an effective system to monitor costs and contracts... 37 
3.4.1  Overview to developing an effective system ... 37 
3.4.2  The redesigning of the project's filing system ... 38 
3.4.3  The preparation of the contract and cost record... 38 
Table of contents 
IV
3.5 Controlling and administering the implemented system ...39 
3.5.1  The budget and additional expenses or claims ...39 
3.5.2  The challenges within the cost and contract control...41 
4  Determining soft skills as success factors in Project Management...44 
4.1  Identification of essential soft skills in China...44 
4.2 Communication skills ...45 
4.2.1  Overview of communication skills...45 
4.2.2  Different communication styles...46 
4.2.3 Communication 
barriers ...48 
4.2.4  Ways to improve communication...49 
4.3  Conflict resolution or mediation ...50 
4.3.1  Overview of conflict resolution...50 
4.3.2  Reasons for conflicts ...50 
4.3.3  Models of conflict resolution...54 
4.4 Body language ...56 
4.4.1  Overview of the importance of body language...56 
4.4.2 Interpreting 
body 
language...57 
4.5  Rhetoric and negotiation skills...60 
4.5.1  Overview of rhetoric and negotiation with the Chinese ...60 
4.5.2  Preparing for negotiation ...61 
4.5.3  Different argumentation styles ...63 
5  Conclusions and recommendations for project approach in China ...66 
5.1  Soft factors for project success in Chinese context ...66 
5.2  Training soft skills for an assignment in China ...68 
6  Summary ...70 
Appendix ...72 
A Supplemental information to the project's financial structure ...72 
A.1 Contract Management of the MT construction project...72 
A.2 Cost Management of the MT construction project ...73 
A.3 Extracted example of MT cost control - overview ...74 
B Supplemental information to the project's implemented system...75 
B.1 Overview to controlling and administering the system...75 
B.2 The contract related payments  payment system...76 
Bibliography ...78 
List of figures 
V
List of figures 
Figure 2.1: Map of China... 11 
Figure 2.2: China's economic growth in real GDP... 16 
Figure 2.3: Migrant workers living in the new buildings, December 2006... 17 
Figure 2.4: Skyline of Shanghai Pudong ... 18 
Figure 2.5: Air pollution at the construction site in Changzhou at 3 o' clock pm... 20 
Figure 2.6: Energy-related Carbon emission ... 21 
Figure 2.7: The project stages in the construction project... 24 
Figure 2.8: The competing project objectives Quality, Time and Cost ... 25 
Figure 2.9: Concrete transportation with wheelbarrow on the site, March 2006 ... 27 
Figure 2.10: Transportation of filling material on the site, October 2006... 28 
Figure 2.11: Construction worker on bamboo framework, October 2006... 29 
Figure 3.1: Layout of new MT Plant (Changzhou) ... 32 
Figure 3.2: MT Project ,,Integrative factory", August 2006... 33 
Figure 3.3: MT Project "Daheng factory", November 2006 ... 34 
Figure 3.4: MT Project "Daheng factory", October 2006 ... 34 
Figure 3.5: MT Project "Daheng factory" from birds eye view, October 2006 ... 35 
Figure 3.6: MT Project "Integrative factory", February 2007... 35 
Figure 3.7: MT Project contract amount distribution ... 37 
Figure 3.8: MT Project Capital Expenditure during the realisation phase ... 39 
Figure 3.9: Reasons for cost variances in the project schedule ... 41 
Figure 4.2: Observing psychological phenomena e.g. Iceberg... 45 
Figure 4.3: Relationship between sources and reasons of conflicts... 52 
Figure 4.4: Different methods and their effects to reduce conflicts ... 53 
Figure 4.5: Conflict resolution approaches... 55 
List of tables 
VI
List of tables 
Table 4.1: Chinese vs. German communication style...47 
Table 4.2: Observed body language in comparison ...59 
Table 4.3: Important rules for successful negotiation ...61 
Table 4.4: Negotiation in six phases ...62 
Abbreviations 
VII
Abbreviations 
B2B 
Business to Business 
CI Corporate 
Identity 
CND 
Changzhou National Hi-Tech District 
CO
2 
Carbon Dioxide 
CSF 
Critical Success Factors  
DI Design 
Institute 
DIHK 
German Chamber of Industry and Commerce 
DIN 
German Institute for Standardisation 
GDP 
Gross Domestic Product 
GM General 
Manager 
MS Milestones 
MT Client
1
MTCA Client 
MTCB Client 
MTCC Client 
NPT 
Network Planning Technique 
PM Project 
Manager 
PRC 
People's Republic of China 
RMB Renminbi 
WBS 
Work Breakdown Structure 
WHO 
World Health Organisation 
WTO 
World Trade Organisation 
1
 Name of the client is confidential. 
1 Introduction 
8
1 Introduction 
1.1  Problem statement  changing challenges abroad 
"Human beings are drawn close to one another by their 
common nature, but habits and customs keep them apart."
2
(Confucius) 
The companies and their business environment are facing drastic challenges within the 
age of globalisation. They are confronted with a greater number of competitors, also 
caused by increasing market transparency. On the one hand, the companies are exposed 
to market saturation and enormous pressure in Europe and the USA, while on the other 
hand, they notice attractive production locations and a huge market potential in China.
3
Furthermore a paradigm shift from a production - to a service and information-driven 
society requires enhanced holistic learning. To be successful and competitive in future, 
adaptability, greater foresight and intercultural competence become requisite. 
In the highly industrialised nations, migration to so-called low cost countries has be-
come a business management trend. Profit and increasing market shares are main rea-
sons for corporations to invest in China. For 25 years, China has demonstrated stability 
and booming economic growth, providing a good basis for foreign companies to estab-
lish business relations with the Chinese. Today, China ranks as the most promising and 
attractive country for foreign investors.
4
When it comes to the construction of new industrial facilities - which is the foundation 
for producing new products, project management becomes a key part of the globalisa-
tion process. However, project management in China leads to new challenges and traps 
for western executives. Unlike in European countries, China is an `individual related' 
country, where personal relationships become more and more significant in business 
success. Knowledge of human nature becomes more important in China than it is re-
garded in western countries, where facts and figures predominantly determine the 
communication within the business environment. In China, the soft side of management 
provides a new challenge. 
2
 Blackman, C.: China Business, pg. 5. 
3
 Cp. Lau, A.: Going International, pg. 13. 
1 Introduction 
9
1.2  Proposed solution  social and personal skills for project success 
What is the key to successful business in China? It is not only dependent on hard fac-
tors or hard skills such as knowledge, specialised know-how or expertise. The personal 
culture in China requires so-called soft skills,
5
 which affect business success. Practice 
shows that the human factor has a prominent position in project success.
6
 This is mutu-
ally dependent on the sole responsibility and a right for the employees to have a say.  
In order for a foreign investor to manage a construction project successfully, a solid 
background in specialised project management expertise is indispensable. However, 
hard-skills are merely the foundation, serving as a basis for project management suc-
cess. 
Elemental awareness needs to be assigned to soft skills. They are often underestimated 
in intercultural project management, in which the project environment demands a col-
laborative partnership rather than a command-and-control managerial hierarchy. In an 
increasingly team-driven workplace, leaders and followers interact more closely and 
deficiencies in personality become clearer. Simply stated, we need these soft skills just 
to get along with each other. 
To be successful, major attention needs to be drawn to the Chinese way of thinking, 
their customs and traditions. Soft skills in communication, negotiation, conflict resolu-
tion and team work play a decisive role in business practice and prevent stumbling 
blocks. They are critical success factors (CSF) in intercultural collaboration and ad-
versely affect business success.
7
 Hence, great sensitivity and the demonstration of soft 
skills are required by the project manager (PM) and his team to minimise misunder-
standings and failure in business relations with the Chinese. 
To handle business and the differences in tradition, culture and mentality, a sensitive 
flair is needed. The mastering of soft skills determines the success or failure of busi-
ness in China. 
4
 Cp. Sieren, F.: Der China Code, pg. 11 et seqq. 
5
 Soft skills is a collective term for a group of characteristics which describe human actions in social-
situations allowing the application of a variety of different behaviours. 
6
 Cp. Gemünden, H.G.: Erfolgsfaktoren des Projektmanagements, pg. 162 et seq. 
7
 Cp. Möller, T.; Dörrenberg, F.: Projektmanagement, pg. 156. 
1 Introduction 
10
1.3  Objective and approach of this study 
The objective of this thesis is to investigate factors that influence the success of con-
struction Project Management in China. This work is written from a business manage-
ment point of view, not from an engineering aspect. All the experience in this thesis 
refers predominantly to the construction project in Changzhou, China during the as-
signment. The thesis is a field report containing empirical appendages and observa-
tions.  
For this, background information about China, important concepts of project manage-
ment as well as the project management environment are presented in the theoretical 
section. It also describes the project management process and the competing objectives 
of Project Management. 
The practical section introduces the construction project and points out the design and 
performance of the project controlling. It contains the analysis of the project's financial 
structure and is followed by the development and administration of an effective system 
to monitor the project's costs and contracts.  
To handle daily business successfully, soft skills as success factors in Project Manage-
ment are identified in the main chapter. After identifying essential skills in China, 
communication skills, conflict resolution, body language as well as rhetoric and nego-
tiation skills are discussed. They are needed for successful collaboration and to manage 
the construction project smoothly. 
This work ends with conclusions and recommendations for our approach to projects in 
China. Soft skills for project approach in the Chinese context give suggestions for the 
preparation of an assignment in China. It is rounded off by giving advice on how soft 
skill training should be carried out to ensure the best benefits for an assignment in 
China.  
2 Project Management in China 
11
2  Project Management in China 
2.1  Background information about China 
2.1.1 General overview 
In order to bring about successful Project Management, a common understanding of 
background knowledge about China has to be established. For this purpose, a short pre-
view of the Chinese culture and mentality as well as originalities within the Chinese 
business culture in the Project Management environment will follow. Subsequently, 
China's construction business and the resulting environmental problems are discussed 
at the end of this chapter.  
Figure 2.1: Map of China
8
2.1.2  Aspects of culture and mentality of the Chinese people 
Chinese people are a very cheerful folk. Being humorous and able to joke and laugh 
with the Chinese is essential to be successful in meetings and negotiations.
9
 Doing 
such, reduces the probability of being pulled a fast one in business. Thus, it is essential 
to break the ice before getting to the actual point of the cause. 
Having your face respected is very important in the Chinese culture. They are enor-
mously sensitive to maintaining face in everything they do. Saying or doing anything 
that causes someone to lose face can instantly destroy a relationship and any business 
8
http://www.maps-of-china.com/china-country.shtml
, Call on 16
th
 of April 2007. 
2 Project Management in China 
12
that might result from it. The rules set forth below should be considered and strictly 
adhered to: 
insulting or openly criticising someone in front of others resulting in their losing 
face is an unforgivable offence, 
refrain from making fun of the Chinese, even if it is supposed to be a joke, 
find a way to draw back without causing loss of the counterpart's face.
10
A Chinese saying goes: "Don't bruise the lotus, don't stir the water". That means that 
you should keep all frustrations inside for the sake of harmony. This is exactly how 
most of the Chinese behave. 
Education 
The reason for the great difference in culture and mentality compared to western cul-
tures has its seeds in the education system. Western mode of teaching which encour-
ages students to question and challenge the instructor is unknown to the Chinese. The 
Chinese teaching style is based on models that students then emulate. This contrasts 
with the Western school and education system in which students are valued for their 
opinions.
11
 Moreover, the one child policy influences the behaviour of the Chinese who 
are often raised as selfish and fastidious children. Many families invest all their goods 
and chattels in their son's education hoping that he will get rich overnight. 
Business culture 
In Chinese business the rules are simple. The credo goes: China gives market share and 
cheap labour to the West. In exchange, Western know-how and technology will be 
transferred to China. The individuals themselves participate in the "get rich is glorious" 
movement whose credo is private gain.
12
 The Chinese want to learn foreign skills, adopt 
foreign technology, make money and become powerful, preferably within one day, and 
with all methods. In the past, they were not supposed to have personal property. Now it 
seems as if that they want to catch up on everything. To achieve their goals, Chinese 
use the 36 Chinese strategem,
13
 a collection of proven and tested methods to mislead or 
9
 Cp. Mayer, W.: China Codes, pg. 12. 
10
 Cp. Blackman, C.: China Business, pg. 100. 
11
 Cp. Ibidem, pg. 147 et seq. 
12
 Cp. Ibidem, pg. 115. 
13
 Strategem is a neutral word for cunning, trickery and slyness. It refers to a smart, unconventional or 
unusual way of problem solving. 
2 Project Management in China 
13
trick opponents. Knowing how to apply such strategem in daily business is a sign of 
wisdom from a Chinese point of view.  
When doing business in China, invitations to banquets, excessive drinking sessions as 
well as the gift-giving are part of the business. Visits to bath houses or karaoke is a 
common business practice which often takes place after a banquet. This seems a 
strange habit for many Westerners who are in China for the first time. Confidentiality 
and silence are ensured concerning all occurrences in the bath houses where you may 
obtain massages and sometimes other services. These visits strengthen the mutual rela-
tionship between the business partners giving them confidence and trust. 
Guan xi (relationship) 
Speaking about business, "Guan xi" (
), known as relationships and network of 
friends and family, is an important element when doing business in China. Entire books 
have been written on this topic. Chinese society is built on Guan xi. Little or no distinc-
tion is made between business and personal relationships. Establishing strong Guan xi 
with the government is particularly important. This prevents the usual hiccups and ad-
ministrative hurdles which come along when performing project management.  
With a good relationship, business can become smoother and the probability of failure 
will be greatly reduced. Because of the person-related business environment, the Chi-
nese tend to invest more time and effort in strengthening business to business (B2B) 
relationships and reciprocity. To improve Guan xi it can be a great benefit to invite the 
Chinese to a nice restaurant for a business banquet once in a while to deepen the rela-
tionship. Western executives do well to accept relationship building as a business 
strategy. The focus at this is rather on establishing a long-term relationship. 
In terms of corruption, China is the sixth most corrupt country in Asia after Indonesia, 
Vietnam, India, Thailand and the Philippines. Corruption and nepotism are "necessary" 
because of the Chinese family system. For Westerners this is often hard to understand, 
however, moral fraud or cunning is a well accepted business practice in China and part 
of the 36 strategem. One example: It is possible that a Chinese contractor `works' for 
more than one company at the same time. He also possesses fake business cards with 
the company logo and his name on it. Therefore it is of utmost importance to check all 
references of the participants systematically prior to negotiation. A sound method to 
identify the person acting for more than one company is to compare the cell phone 
numbers on the business cards. 
2 Project Management in China 
14
Chinese versus foreigner 
The majority of the Chinese feel unhappy about the way foreign business performs in 
their market. Foreign products take away market share of Chinese brands and harm 
their reputation as preferential treatment is given to foreign enterprises and puts na-
tional products in an unfavourable position. Some feel exploited and put it like this: 
"We have been slaves to the Westerners".
14
 From a Chinese point of view, foreigners 
are temporary employees, earning a lot of money and causing trouble and grief. How-
ever, Chinese people are perfect survivors and very practical.  
It is frightening for foreigners that there seems to be nothing to stop them from their 
capitalistic thinking and incredible greediness to get rich at the expense of others. That 
is also a reason why foreign investors are afraid that China's imitation products will 
hurt their own sales. Chinese possess no set of morals such as The Ten Command-
ments. The only thing that counts in the long term is their personal benefit. In my opin-
ion it is not possible for the Chinese to hold real friendship without having some kind 
of hidden agenda. In terms of cunning or fraud, the main difference between Europeans 
and Chinese is that the Europeans tend to practise barefaced cunning but bashfully hush 
it up. The Chinese on the other hand practise barefaced cunning and talk about it with-
out any false shame.
15
2.1.3  Facts and figures about China 
China ranks as the third largest country in the world (after Canada and Russia). How-
ever, it is still a developing country. The population amounts to 1.3 billion, resulting in 
the fact that 20 percent of the world's population are Chinese.
16
 Only 10 percent of the 
population are over 60 years old, compared to Germany where 25 percent are over 60 
years old.  
The country is divided into provinces, autonomous regions and municipal cities directly 
under the central government in Beijing. Currently there are 34 provincial-level admin-
istrative areas and 23 provinces in China.
17
 It is amazing, that the huge country only has 
one single time zone for all provinces.  
14
 Cp. Blackman, C.: China Business, pg. 102-103. 
15
 Cp. Senger, H.: Die Kunst der List, pg. 37. 
16
 Cp. Ashford, L.: 
http://www.prb.org/pdf06/06WorldDataSheet.pdf
, pg. 9, Call on 29
th
 of January 2007. 
2 Project Management in China 
15
The climate in China is extremely diverse, from tropical in the south to frozen and sub- 
arctic in the north of the country. In central China, in the valley around the Yangtze 
River, the summer is long, hot and humid and the winter is short and cold. 
China's  economy has changed from a centrally planned system to a market-oriented 
economy in the last decades. It began in the early 1980s, not because of its culture- 
which was relatively unchanging - but because of its policies, which went through a 
dramatic transformation by the country's leader Deng Xiaoping. During the 1980s and 
1990s many companies went into China, led by the hype from their own governments 
and the media about China's new market economy.
18
At the height of the Industrial Revolution, Britain was called "the workshop of the 
world". That title surely belongs to China today. It is already the world's fastest-
growing large economy even though it still ranks as developing country. China has 
grown around 9 percent a year for more than 25 years. That is the fastest growth rate 
for a major economy in recorded history. Therefore every businessman these days has a 
dazzling statistic about China.  
Future prognoses 
According to the Swiss institute "Prognos", China is going to replace Germany as 
world export leader in the year 2015.
19
 Currently, Germany is still the most important 
business partner for China within in the European Union.
20
 Statements like "China's 
growth is a tougher event than anything we faced since World War Two" or "China is 
the Viagra of the global economy"
21
 fill the title pages of international newspapers. 
Economists say that the size of the Chinese economy is likely to climb in world rank-
ings, from its current position as the sixth largest to the second largest by 2030. There 
are also many who criticize China's economic path, but so far at least, none of these 
critical prognoses have come true. The economy of the PRC is the fourth largest in the 
world when measured by nominal Gross Domestic Product (GDP).
22
17
 Cp. 
http://www.china.org.cn/english/en-sz2005/indes.htm
, Call on 29
th
 of December 2006. 
18
www.cia.gov/cia/publications/factbook/goes/ch.html
, Call on 27
th
 of November 2006. 
19
 Cp. Gramke, K.: 
http://www.spiegel.de/wirtschaft/0,1518,druck-461374,00.html
, Call on 29
th
 January 
2007. 
20
http://www.auswäertiges-amt.de
, Call on 24
th
 of Nov 2006. 
21
 Cp. Sieren, F.: Der China Code, pg. 28, adapted from Süddeutsche Zeitung, 31
st
 of January 2004. 
22
http://en.wikipedia.org/wiki/Economy_of_the_People_%s_Republic_of_China#Industry
, Call on 27
th
of December 2006. 
2 Project Management in China 
16
China's real GDP in %
10,1
10
9,1
8,3
8,4
7,6
7,8
9,3
10,2
10,5
10
0
2
4
6
8
10
12
1997
1998
1999
2000
2001
2002
2003
2004
2005 2006* 2007*
* prognosis
GDP
Figure 2.2: China's economic growth in real GDP
23
China is now the world's largest producer of coal, steel and cement. The country is 
buying most of the world's steel at the moment and a lot of oil. 
Regarding the unemployment situation in China, the unemployment rate in the cities 
averages at least 8,5 percent and in the rural areas about 30 percent. These are adjusted 
figures from the Chinese government. The reason for the high unemployment is the 
restructuring of state owned enterprises. It has been estimated that the number of mi-
grant workers is 300 million, many of them working in the construction business and 
willing to travel huge distances within the country to get a job.
24
23
 Own figure according to 
www.bfai.de/China-Wirtschaftsdaten
kompakt
, Call on 2
nd 
of January 2007. 
24
http://www.auswaertiges-amt.de/diplo/de/Laenderinformationen/China/Bilateral.html
, Call on 2
nd
 of 
February 2007. 
2 Project Management in China 
17
2.1.4  China's construction business 
Project Management, in its modern form, began to take root only a few decades ago, 
starting in the early 1960s in the United States. The foundation was shaped predomi-
nantly from the military and aerospace sector. In Germany, the term Network Planning 
Technique (NPT) has been used as a synonym for Project Management for many 
years.
25
China's  construction industry has experienced consistent growth over the last few 
years. Thus, Project Management experience and construction techniques have been 
invaluable. By the end of 2001, there were 36.69 million people working permanently 
in the construction business.
26
The image below illustrates how migrant workers live on the construction site. 
Figure 2.3: Migrant workers living in the new buildings, December 2006
27
25
 Cp. Schelle, H.: Projektmanagement Fachmann, pg. 36. 
26
http://www.buyusa.gov/china/en/ace.thml
., Call on 27
th
 of November 2006. 
27
 Own figure. 
Details
- Seiten
 - Erscheinungsform
 - Originalausgabe
 - Erscheinungsjahr
 - 2007
 - ISBN (eBook)
 - 9783836607452
 - DOI
 - 10.3239/9783836607452
 - Dateigröße
 - 3.3 MB
 - Sprache
 - Englisch
 - Institution / Hochschule
 - Hochschule für Technik Stuttgart – Wirtschaft, Betriebswirtschaft
 - Erscheinungsdatum
 - 2007 (Dezember)
 - Note
 - 1,7
 - Schlagworte
 - china projektmanagement communication skills negotiation globalisation market
 - Produktsicherheit
 - Diplom.de