There are many difficulties facing foreign firms hoping to get a foothold in the massive task of rebuilding Sichuan’s earthquake devastated regions. But some Australian companies are making inroads. Sophie Loras reports.

When the Sichuan earthquake struck on May 12, 2008, the tremors were felt as far away as Shanghai and Beijing. Measuring 7.8 on the Richter Scale, the earthquake left more than 80,000 people dead, almost 400,000 injured, 17,000 missing and a further 15 million people displaced (of that, five million left without homes).

The relief and reconstruction effort, while prompt, open and organised, has faced a momentous challenge in rebuilding vast tracts of infrastructure spanning several provinces.

China must rebuild 4.5 million new residential units or homes, 50,000km of new road, 5,500km of railways, almost 12,000 new schools (from kindergartens to universities and colleges) around 10,000 medical institutions and clinics and 4,000 manufacturing facilities. 

"It’s a huge project,” says James Zhan, the manager of Austrade’s Chengdu office.

Initial central government restoration and reconstruction target figures stood at RMB 1,000 billion (A$221 billion).

In November last year, in response to the global financial crisis, the government allocated an economic stimulus package of RMB 4 trillion (A$865 billion). The Sichuan earthquake reconstruction effort has been singled out as a major recipient of funding. It is hoped that as well as repairing damaged infrastructure, reconstruction projects will also provide much needed employment for the millions of laid off migrant workers recently sent home from China’s affluent coastal cities.

"The earthquake is a disaster but at the same time, China has an opportunity to pull the economy forward through these investment projects,” says Zhan.

Zhan has been at the forefront of assisting Australian companies to secure work in the reconstruction effort, but he is the first to admit, securing such work for foreign businesses has not been easy.

"These are not high-end productions, it is therefore very hard for Australian or foreign companies to get involved,” says Zhan. “If you are just producing ordinary building materials – China already has that.”

Austrade is therefore focussing on assisting companies which specialise in niche markets, particularly those which produce green or sustainable materials.

"China is encouraging companies to use these materials in the reconstruction process and that’s our opportunity,” he says.

Temporary housing, schooling and medical facilities are all complete. The next stage is the reconstruction of more permanent structures.

One way foreign organisations and companies have secured projects has been from initial donations made in the first days and weeks of the earthquake.

BlueScope Lysaght was approached through its Butler arm in Guangdong to assist with the provision of 50 temporary schools in the initial aftermath. Within 24 hours a design for a temporary school with dormitories, a canteen and classrooms was put together. Within 15 days, all the material had been shipped to the area and workers were assembled to begin the four-day job of putting together the first temporary school in Mianyang. The company then went on to donate a 650m² two–storey permanent school accommodating up to 300 students. The school, earthquake tested to 9 on the Richter Scale, was designed with the support of China’s Tongji University – which boasts a strong reputation in the construction field. At a cost of RMB 1 million (A$220,000), BlueScope has been targeting NGOs and other organisations to donate a school. One Australian bank has already pledged once such school in Sichuan.

The big test however has been persuading mindsets to consider steel as an alternative building material.

"Nearly every building that collapsed was cement,” says Tim Lefebvre, President of BlueScope Lysaght China. “So there has been a big move to steel and a big push from the government especially in earthquake prone areas. But while steel structures are compelling, we are still finding people going back to their standard construction methods,” he says.

Another Australian company which has secured work in Sichuan is Kann Finch Design Group. The design of an 80,000m² high-tech facility in one of Sichuan’s most severely affected areas, Mianyang, was won in large part due to the company’s existing reputation and established contacts in the city. Government offices and a local museum in Mianyang withstood the earthquake without any significant damage.

Foreign businesses can also look at securing relief work through the assistance provinces and cities program.

Under the State Council’s ‘Overall Planning for the Post-Wenchuan Earthquake and Reconstruction’ relief effort announced in August 2008, 19 provinces and cities, including Shanghai, Beijing, Tianjin, Guangdong, Jiangsu, Zhejiang and Chongqing have been partnered with ‘counterpart’ earthquake affected regions to oversee reconstruction efforts to the value of 1 percent of their GDP.

Those projects include providing planning, building design, professional advice, construction and supervision of residential buildings, schools, hospitals, public facilities, as well as restoring roads and amenities. In rural areas, it includes restoration of some farming and agricultural facilities as well as the provision of machinery, equipment and technology. Donors also dictate how their funding is spent and how they wish reconstruction work to be allocated. That means Australian companies don’t necessarily have to be approaching the Sichuan government to secure projects. Cities and regions such as Shanghai will likely allocate relief work to their own local businesses – potentially including Australian companies based there.

Austrade will conduct a fact finding mission to Sichuan and Yunnan in April. Companies in the field of construction and building materials will be invited to join – especially those with expertise in green technologies.

For more information:
James Zhan in Chengdu: This e-mail address is being protected from spambots. You need JavaScript enabled to view it