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Breaking China

China overview - China is proving a tough nut to crack for UK consultants.Jackie Whitelaw spoke to two businesses who believe persistence will pay off.

After 20 years working in mainland China, consultant Scott Wilson can lay claim to a $12.6M turnover - 4.5% of overall turnover. This makes it the most heavily committed of all UK businesses working in China surveyed by NCEI for this month's report (see table).

The consultant knows just how difficult the market is, but is hoping that decades of ground work will pay off in the next five years as a booming construction market frees up, offering more opportunities for western fi rms.

In its early days Scott Wilson focused on advising international firms building factories in the Pearl River delta and aid funded work. Now it does 80% of its business directly with the Chinese government and has two significant joint ventures with major design institutes.

'If you want to work in China, the design institutes are key, ' explains China director Peter Chan. 'There are thousands of them, undertaking all design work at a national, provincial and local level across all sectors of infrastructure.' Scott's JV's are with Jiangsu Provincial Transportation Planning and Design Institute and Tianjin Municipal Investment.

Its Jinagsu JV is registered as 'Class A' which allows the company to work nationally.

The arrangement in Jiangsu focuses on roads and transportation, and in Tianjin it is water and masterplanning.

'As international engineers you can't build bridges or roads - you help' says Chan. 'China has very smart engineers. We bring the international, multi disciplinary dimension that the Chinese are keen to learn.' Working in joint venture with the Chinese design institutes is giving Chan - who is originally from Hong Kong but lived for a long spell in Canada - a precious insight into how business is done on the mainland. 'We rotate the chairmanship and take it in turns to run the company. Very few expats have had a real opportunity to manage a Chinese company. I have learned how to behave in the Chinese system, ' Chan says.

The potential market is huge, he believes. 'We have a strong five year plan to grow to 1,000 staff and could easily have staff numbers higher than the UK in the future. It is very exciting working here.

The Chinese want to get things built, quickly.

'But you have to remember that China is so big. And what Beijing thinks, is not how Chengdu will react. Local contacts are very important.' Being seen to be there is also very important. This is something that Halcrow's Asia Pacific regional managing director Bill Austin quickly picked up on when he decided the company needed to put more effort into building a business in China. He and his wife upped sticks and moved from Melbourne where the division is headquartered to Shanghai nine months' ago.

'You need to be in China, ' he says. 'You can't keep going back to the mother ship.

Clients ring and they want to see you tomorrow.' Halcrow accepts it was late opening up in Shenzhen and Shanghai. It is determined to be first into what it believes is the new boom area, the west and specifically the region round Chongqing and Chengdu.

The Three Gorges Dam will allow ships to travel up the Yangtse as far as the 35M population industrial city of Chongqing and investment is expected to follow. 'At the same time the aid institutions like the World Bank have indicated that they will only be supporting schemes in the west in the future, ' Austin says.

Halcrow opened an office in Chengdu in May on the back of a small but very high profile project to masterplan a much expanded Giant Panda park.

The company even adopted a giant panda - named Hele or Halcrow in Chinese - to underline its commitment to the region. Commissions, he says, are now pouring in.

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