Project Management in China Prof LU, Youjie and Prof. Dr. WANG, ShouQing Dept of Construction Management School of Civil Engineering Tsinghua University Beijing, China Historical Perspective Project management in China dates back to ancient times, as evidenced by a number of well-known construction projects such as the Great Wall, the Great Canal and the Forbidden City. Modern tools, techniques and methodologies for project management, such as the Critical Path Method (CPM), Programme Evaluation and Review Techniques (PERT), and Graphical Evaluation and Review Techniques (GERT) were brought to China in the 60s when China launched its nuclear weapon and missile/satellite programmes. The defense, aerospace, science and construction sectors were the first areas in China where modern project management techniques were applied. Credit for dissemination of the techniques should be given to Professor Loo-Keng Hua, a leading mathematician in China at that time. Knowing the potential of successful project management for economic growth, social development and defense strength of China, he and his assistants, setting their pure mathematics research aside, began to promote network-based techniques throughout the country. Credit should also be given to Professor Xue-Sen QIAN who promoted the application of the system engineering theory in China and developed it further as a new R&D field, i.e. the Engineering Controlling, and applied it to missile and aerospace programmes in China. Following that, many project management software based on CPM/PERT were developed by Chinese software and engineering engineers and applied to defense, aerospace and construction sectors in 1980s. At the same time, some foreign software was also introduced into China. The World Bank also provided a stimulus for project management to grow at a very fast pace in China. China resumed its membership of IBRD (International Bank for Reconstruction and Development, commonly known as the World Bank) in 1980. The Lubuge Hydroelectric Station in Yun'nan province was the first hydroelectric project in China partly financed by an IBRD loan. Its construction started in 1984. International competitive bidding was used for procurement of the construction contract for the diversion tunnel of the project. 1
The contract between the employer and a Japanese contractor included the FIDIC Conditions of Contract, as recommended in the then current Sample Bidding Documents for Procurement of Works of the IBRD. The Japanese contractor successfully managed the diversion tunnel subproject following the modern project management principles embodied in the FIDIC Conditions of Contract. Stimulated by the success of this project, the Chinese government began a reform of the construction industry in 1984. One of the principal items in the reform agenda was the promotion of project management techniques throughout the construction industry in China. MOC's Efforts The Ministry of Construction (MOC) has been playing a leading role in promoting project management in China. Before 1984, construction enterprises were under the administration of the central ministries and/or local governments. Their operations were restricted by their supervisory government agencies to certain sectors of the economy and/or to geographical areas. Their workloads and resources were allocated by their supervisory government agencies. On the other hand, the majority of the enterprises were of the general type, i.e. they undertook the work of all the trades involved in a construction project, without using subcontractors. All their human resources, skilled and unskilled workers, engineers, office staff and managers were permanently employed, no matter how big their workload was. The system resulted in low efficiency and effectiveness. The MOC launched a number of reform programmes in 1984, aiming to raise the efficiency and effectiveness of the state-owned construction enterprises and the construction industry as a whole. One of the issues that the reform programmes addressed is closely related to the implementation of project management techniques by the enterprises separating field operations from management. The separation has taken place both within and between the enterprises. On one hand, all the state-owned enterprises have given up the system of permanent employment of line workers, especially the unskilled labour. The permanent positions have been kept only for the technical and managerial staff and a limited number of skilled operatives, subject to renewal of employment contracts regularly at intervals of three or four years. The new system has enhanced flexibility in matching the workforce with the workload and reduced labour costs. On the other hand, a majority of the enterprises have been restructured to concentrate on building work; specialist or labour-only subcontracting companies, while only a small portion of them have kept their general contracting status. Besides increasing the efficiency and effectiveness of the resources available to the state-owned construction enterprises and the construction industry as a whole in China, the reorganisation has also made the enterprises more project-oriented and friendly in their operation. While the industrial restructuring got under way, a number of steps were taken by the 2
then State Planning Commission (SPC, now the State Development and Reform Commission), the State Economy and Trade Commission (SETC, now merged with the Ministry of Commerce) and the MOC to promote project management in construction enterprises. In November 1987, the SPC instructed 15 selected engineering enterprises to apply project management techniques to their operations. Encouraged by the success of the selected enterprises, many other enterprises followed suit. The excellent performance of 186 project managers was recognised at a national conference herd by the State Council (SC) in 1991, which further encouraged the enterprises to apply project management techniques to their operations. In 1992, the State Technique Superintendence Bureau (STSB) promulgated formally the GB13400: Standard for Network Planning Techniques, the first national standard related to project management. The Construction Project Management Committee (CPMC) was formed under the China Construction Industry Association in 1994. The Department of Construction Industry and the Department of Construction Supervision issued Guidelines for Construction Enterprises to Further the Application of Project Management Techniques in May 1996, requiring that efforts be made to put project management on the right track. The MOC issued the Procedures on Administration of the Qualification of Construction Project Managers in January 1995 after the Tentative Procedure on Administration of the Qualification of Construction Project Managers issued in July 1992 had been in effect for three years. In order to make the project managers competent for their roles and duties, and bring them eventually up to the standards set out in the above Procedures, a series of training programmes have been designed and offered under the auspices of the MOC to project managers and other members of project management teams. In June 1992, MOC issued a notice to all the state-owned construction enterprises stating that made it mandatory for textbooks, tests and certificates to meet the standards of MOC. Six new textbooks were published in January 1995 to be used in the training programmes throughout the country. One hundred and forty educational institutions or training centres had been accredited by MOC as project management training providers up to the end of 1995. During the same period, 321,983 project managers took the training courses and 297,774 of them were certified by the MOC. There are now about 500,000 project managers in total certified by the MOC. Starting from July 1, 1996, all applicants must be certified, as required by the Procedures on Administration of Qualifications of Construction Project Managers, before they take the position of project manager. At present the training and certification in project management is going on regularly in China. The Construction Project Management Committee produced a Construction Project Management Procedure in April 2002 under the auspices of MOC. The Procedure is based on the 3
experience and lessons that the construction community in China learnt over the past ten years. It represents the recognition of project management as an effective project development approach, and a further commitment to its dissemination by the construction community in China. In 2004, MOC also launched the Registered Builder certification system and the first National Examination for Registered Builder will be held in Nov 2004. The World Bank As in other parts of the world, project management is no longer limited to construction but has been adopted in most economic sectors in China. To a certain extent, credit for this belongs to the World Bank. The World Bank offered a number of training programmes in Beijing, Dalian and Shanghai, aimed at improving the project management capability of China, since it started lending to China in the early 1980s. Among all such efforts is a programme for the training of trainers that was implemented in 1994 and 1995. It was financed by a grant from the World Bank. In July 1994, IBRD made an IDF (Institutional Development Facility) grant in an amount of US$478,000 to China for the development of project management training capability, and the establishment of an institutional framework for such training. The activities that the grant covers include, among other things, (a) identification, translation and preparation of training materials, including case studies for training courses, (b) a training programme in Washington DC for an initial number of 44 trainers from training networks' institutions to be selected, and (c) four training courses including two conducted in Hong Kong and Singapore for project managers and officials from concerned government agencies. The Ministry of Finance (MOF) of China contributed 33 percent of the total cost of US$757,650. Immediately after the training programme a training network was formed with five major universities in Beijing, Tianjin, Shanghai and Xi'an, aiming at training project managers and specialists throughout the country on a regular basis. The Project Management Center of Tsinghua University (expanded as the Institute for International Engineering Project Management of Tsinghua University in April 2000) is currently leading the network. The network has since then organised many training programmes on project management. To make the training activities sustainable, the Project Management Center of Tsinghua University had a series of textbooks in project management published by Tsinghua University Press. The Chongqing Urban Environment Project and the Liao River Basin Project were proposed for World Bank financing in 1998 and 2000 respectively. Both projects have an institutional strengthening and training (ISI) component. The first author was employed with World Bank funds as a consultant to devise the training programmes for the staff of the specialist companies concerned with the environmental components of the projects, as well as for the government officials involved in the two projects. The majority of courses are project-management oriented. 4
Follow-up Activities The PMRC Chinese scholars and practitioners have been active in various ways, seeking to disseminate and promote modern project management knowledge and practice since the 90s. A Project Management Research Committee (PMRC) was formed within the COROMERS in June 1991 in Xi'an, Shanxi province. The Committee s aim is to promote project management professionalism, and facilitate dissemination and sharing of professional information on both a domestic and international basis. The membership of the Committee encompasses the individuals and bodies involved in project management, both academically and practically, across various sectors. The Secretariat staff has represented the Committee in a number of the International Project Management Association (IPMA) annual conferences since the Committee became a national member in 1996. In 2001, the Committee was authorised by the IPMA to operate IPMP certification in China. For this purpose, the Committee established a company named Xi an Huading Ltd. The Committee also localised the ICB (International Competence Baselines) by producing the NCB (National Competence Baselines) for China and produced a document entitled China's Project Management Body of Knowledge (Cs-PMBOK) at the same time. Although this Cs-PMBOK has not become as generally known as would be desirable, the Xi an Huading is successful in promoting the IPMP in China. It has established 53 Authorized Certification Agents including 16 in different industrial sectors and 37 in different provinces/regions (including Taiwan and Macao) in China and about 10,000 IPMP certificates have been issued since 2001. There are now 46 Chinese Evaluators who have been authorised by the IMPA for carrying out IPMP certification activities in China. The SAFEA/BMMTEC and PMP In addition, the State Administration of Foreign Experts Affairs and its then subsidiary, the BMMTEC International Education Group, invited the Project Management Institute s Dr J. D. Frame to give a public seminar introducing the PMI s Project Management Body of Knowledge in China in 1998. In 1999, the BMMTEC became the first and now one of the largest Registered Education Provider in China certified by PMI providing Project Management Professional (PMP) certification training and examination services as well as other training and education on project management. There are now 46 REPs in China, and about 70,000 people have participated PMP training and 4000 persons have been certified as PMP. The MOLSS and CPMP As the PMP and IPMP certifications are all based on foreign project management standards/guides and are not officially recognised in China, there is a need to establish China s own certification system for project management professionals in 5
China. To meet this requirement, in Sept 2002 the Ministry of Labor and Social Security promulgated the National Standards for Project Management Professionals in China (CPMP) which forms the basis for CPMP certification. The first National Examination for CPMP Certification was held in Dec 2003 and those who want to apply for the certificate have to attend a one-week training programme offered by agents authorised by the MOLSS and take the 5 hour National Examination for CPMP Certification. According to the CPMP Standards, the CPMP certification system in China features some characteristics. CPMP is a four-level certification system, i.e. a person could be certified as the Project Management Clerk, the Project Management Assistant, the Project Management Professional and the Senior Project Management Professional according to the applicant s knowledge and experience. In the Grades I & II CPMP Certifications the holder s major (Engineering, IT, Investment or General) is also indicated. CPMP certification is based on the examination or evaluation on an applicant s knowledge and skills on project management, including project management software application skill, education background, working experience as well as moral and ethics performance. CPMP places great emphasis on continuous professional development (CPD) and requires that each person with a certification should attend at least 30 hours CPD or he/she is not qualified to apply for higher level of certification. The SETC/CAS/BJZK and C-PMBOK/ICPM In Sept 1999, the SETC and Beijing ZK Project Management Research Institute jointly organised the First Executive Workshop on Project Management in Qingdao detailing the project management based on PMI s PMBOK. Then a serious similar workshops and training programmes followed and more than 2000 people participated. During popularising project management in China, Chinese scholars and practitioners realised that the international knowledge and practices of project management for example the PMI s PMBOK should be tailored to suit China s special circumstances and characteristics to achieve its best application effect. At the proposal of a group of researchers, professors and government officials, in February 2001 the SETC launched a project to develop a document that can serve as a common lexicon within the project management community in China for talking, writing and communicating with the international community about project management. This document can also be used as a guideline for project management professionals to prepare for the certification examination. The current economic and social circumstances of China were taken into account during the drafting of the document. Comments and remarks were invited nationwide and across sectors several times. The finalised document was published in April 2002 entitled the Project Management Body of Knowledge in China in a milestone international conference, the ICPM 2002. 6
The NOPEISA/PMRC/Tsinghua/IPMA and ipmbok To customise the project management application in the IT industry, taking into account the special characteristics of IT projects in China, the National Office for Promoting Electronic Information System Application in China (NOPEISA) has worked with PMRC, Tsinghua University and IPMA etc since 2000 to draft the ipmbok, a specialised PMBOK for IT industry. The finalised document was published in May 2004. More than 60 scholars and practitioners in project management from more than 30 universities and bodies were involved. This is the first customised and localised PMBOK specially-drafted for an industry sector. More specialised PMBOKs for other sectors are expected to be drafted and issued facilitating the project management application in various industries in time to come. The FIDIC Conditions of Contract A few Chinese state-owned construction enterprises, with the help of Hong Kong businessmen, began to undertake construction contracts outside mainland China in the late 1970s, exposing the Chinese construction community to international conditions of contract for building and civil engineering construction, including the FIDIC Conditions of Contract for Works of Civil Engineering Construction (the Red Book). On the other hand, the World Bank includes the Red Book in its standard bidding documents for procurement of works. Experience in China shows that most of the civil engineering works procured under the FIDIC conditions have turned out very successfully. The Chinese employers find that the project management practice and the employment of an impartial engineer, as provided for in the Red Book, have been key factors for the successful development of projects. FIDIC signifies a high level of sophistication in construction project management to the construction sector in China. FIDIC is highly regarded and well known throughout the industry. The construction sector increasingly needs engineers who are fully conversant with the principles of the FIDIC contracts, to bring its human resources to the same standard as those of the engineers engaged from overseas. On the other hand, a significant change has occurred recently within the Chinese engineering design industry. Design professionals in China are primarily technically oriented because of their education, training and experience. Many of them have not had the opportunity to undertake consulting work prior to the design phase of a project. However, the increasingly market-oriented clients and the growing size and complexity of the infrastructure projects being developed have created a major demand for a much wider range of consulting services. The design professionals have increasingly had to take on the role of the project managers and facilitators responsible for a broad scope of services. The majority of design professionals do not, however, have the necessary skills, and need to be trained to the internationally-accepted standards of consulting practice required to manage projects under the FIDIC conditions of contract. An agreement was thus made among the FIDIC, Tsinghua University and the China 7
National Association of Engineering Consultants (CNAEC) and the FIDIC-Tsinghua-CNAEC Training Center created in 200l at Tsinghua, Beijing, for programmes and project management, with a main focus on the FIDIC Conditions of Contract. The proposed training programmes are designed to prepare and/or train the leaders in engineering-oriented project/programme management, consulting engineers and project managers. The training of project managers and construction companies contract administration staff in the FIDIC Conditions of Contract and other contract documents is the starting point. Later the training will be extended to consulting and design professionals. The Center located in the Tsinghua campus in Beijing, is run by representatives from CNAEC (the FIDIC member association in China) and Tsinghua University. FIDIC guides, suggests and supervises the work and training plan of the Center. It recommends experts for the lectures, provides related documents and materials published by FIDIC, and signs the certificates for the trainees that complete the courses. For these reasons, the Chinese consulting and construction community has kept a close track of the development of FIDIC s standard forms of contract. The new suite of FIDIC Conditions of Contract became known in China almost immediately after its publication in September 1999, and has been translated into Chinese, as authorised by FIDIC, by a panel recruited by CNAEC. Education and Training in China Construction project management as a management discipline has been offered for more than 20 years at both graduate and undergraduate levels in a number of major universities such as Tongji University at Shanghai, Tianjin University at Tianjin, Harbin University of Technology at Harbin, Chongqing University at Chongqing and Tsinghua University at Beijing. However, Project Management per se has not been accepted by the Ministry of Education (MOE) as a management discipline, either at undergraduate or graduate levels until 2003. As a result there was no university that offers formal project management education. In late 2003, Tsinghua University and Beihang University (i.e. Beijing University of Aeronautic and Astronautic Science and Technology) were authorised, for the first time, by the Degree Committee of the State Council and MOE to run by trial the M.Eng.(PM) programme after feasibility studies done by Tsinghua University, Tongji University, Huazhong University of Science and Technology, Harbin University of Technology and Xi an Jiaotong University in early 2003. The Network s first meeting was held at the same time, and the Guidelines for the M.Eng.(PM) Programme was issued too after discussion and modification based on a draft prepared by the second author. The Guidelines place great emphasis on the practical application of project management knowledge and methods in industrial sectors e.g. engineering, IT, agriculture or national defense etc, requiring that the candidates should have education background and working experience in one 8
industrial sector and that the theses should be based on solving a practical problem in a real project. There are also numerous private firms that offer project management training services in several major cities such as Beijing, Shanghai, Shenzhen and Chongqing since 2000. The background for this is that more and more private businesses, especially the Chinese subsidiaries of major multinational firms, have realised that effective project management is essential for implementing their business strategies. They encourage and financially support their employees to attend project management training. Notably, some foreign universities especially those from USA, Australia and UK have also entered the project management education and training market in China since 2001. However, to provide degree education in China, a foreign university needs to sign a collaboration agreement or even form a joint venture with a local university and get approval in advance from the DCSC and MOE before they can recruit students. They usually offer project management programmes at graduate level leading to a Master's or PhD degree. However, due to the language obstacle and the relatively high tuition fees, some joint programmes are not as successful as expected. It can be expected that after Chinese universities offered its own M.Eng.(PM) programme in end 2003 and B.Sc.(PM) in fall 2004, the local degree programmes in project management will be getting popular too. 9