CONSTRUCTION LAW OF THE PEOPLE’S REPUBLIC OF CHINA

The Standing Committee of the National People’s Congress

Order of the President of the People’s Republic of China

No.91

The Construction Law of the People’s Republic of China which has been adopted at the 28th Meeting of the Standing Committee of the
Eighth National People’s Congress on November 1, 1997 is promulgated now, and shall enter into force as of March 1, 1998.

President of the People’s Republic of China Jiang Zemin

November 1, 1997

Construction Law of the People’s Republic of China ContentsChapter I General Provisions

Chapter II Building Permit

Section 1 Building Permit for Construction Project

Section 2 Qualifications for Operations

Chapter III Construction Project Contract Issuance and Contracting

Section 1 General Rules

Section 2 Contract Issuance

Section 3 Contracting

Chapter IV Construction Project Supervision and Control

Chapter V Construction Production Safety Management

Chapter VI Construction Project Quality Control

Chapter VII Legal Liability

Chapter VIII Supplementary Provisions

Chapter I General Provisions

Article 1

This Law is enacted with a view to enhancing supervision and administration over building operations, maintaining order in the construction
market, ensuring the quality and safety of construction projects and promoting the sound development of the building industry.

Article 2

This Law shall be adhered to in engaging in building operations and in the exercise of supervision and administration over building
operations within the territory of the People’s Republic of China.

The building operations referred to in this Law mean construction of all types of housing and the construction of their ancillary
facilities as well as their matching installation operations of wiring, piping and equipment.

Article 3

The building operations shall ensure the quality and safety of construction projects and ensure that they are in conformity with the
state safety standards for construction projects.

Article 4

The State supports the development of the building industry, supports scientific and technological research in construction to improve
the levels in the design of housing construction, encourages energy economy and environmental protection, encourages adoption of
advanced technologies, advanced equipment, advanced techniques and new building materials and modern mode of management.

Article 5

In engaging in building operations, laws and regulations shall be adhered to, and public interest of society and the legitimate rights
and interests of others shall not be infringed upon.

No unit or individual shall hinder or obstruct the building operations conducted in accordance with law.

Article 6

The competent department of construction administration under the State Council exercises uniform supervision and administration over
building operations nationwide.

Chapter II Building Permit

Section 1 Building Permit for Construction Project

Article 7

A construction unit shall, prior to the start of construction of a construction project, apply to the competent department of construction
administration of the people’s government at or above the county level of the place wherein the project is to be located for a building
permit pursuant to the relevant state provisions; however, the below-ceiling small projects determined by the competent department
of construction administration under the State Council are exceptions.

A construction project the report for the start of construction of which has been approved pursuant to the terms of reference and
procedures prescribed by the State Council shall no longer obtain a building permit.

Article 8

Application for a building permit shall meet the following terms:

(1)

having completed the formalities for the approval of land use for the said construction project;

(2)

having obtained the planning permit in the case of the construction project in an urban planning zone;

(3)

in the case of necessity of demolition and shifting, the pace of demolition and shifting conforming to the requirements of construction;

(4)

having determined the construction enterprise;

(5)

having construction drawings and technical information which meet the requirements for construction;

(6)

having specific measures for ensuring project quality and safety;

(7)

the construction funds having been made available; and

(8)

other terms prescribed by laws and administrative regulations.

The competent department of construction administration shall, within 15 days from the date of receipt of an application, issue a
building permit for the application which conforms to the terms.

Article 9

A construction unit shall start the construction within three months from the date of acquisition of the building permit. For inability
to start the construction in time due to unforeseen reasons, an application for extension shall be filed with the permit-issuing
organ; the extension shall be limited to two times, and each time shall not exceed three months. The building permit shall be automatically
annulled in the case of a construction project which neither gets started nor applies for extension, or which has exceeded the time
limit for extension.

Article 10

For suspension of construction of a construction project under construction due to unforeseen reasons, the construction unit shall,
within one month from the date of suspension of the construction, submit a report to the permit-issuing organ and carry out maintenance
and administration of the construction project in accordance with rules.

A report shall be submitted to the permit-issuing organ when the construction project resumes construction; prior to resumption of
construction of a construction project whose construction has been suspended for a year, the construction unit shall submit a report
to the permit-issuing organ for the verification and examination of the building permit.

Article 11

For inability to start construction in time or suspension of construction due to unforeseen reasons, a construction project the report
for the start of construction of which has been approved pursuant to the relevant provisions of the State Council shall submit a
report to the approval authority in time on the situation. For inability to start construction in time exceeding six months due to
unforeseen reasons, formalities for the approval of the report for the start of construction shall be completed again.

Section 2 Qualifications for Operations

Article 12

Building construction enterprises, survey units, design units and project supervision units engaging in building operations shall
have the following qualifications:

(1)

having a registered capital conforming to state provisions;

(2)

having specialized technical personnel with qualifications for legal operations commensurate with the building operations engaged
in;

(3)

having technical equipment for engaging in related building operations; and

(4)

other qualifications prescribed by laws and administrative regulations.

Article 13

Building construction enterprises, survey units, design units and project supervision units engaging in building operations shall
be classified into different grades of human quality in accordance with such human quality qualifications as the registered capital,
specialized technical personnel, technical equipment in their possession and achievements in construction projects completed, and
may engage in building operations within the scope permitted by their respective human quality grades on acquisition of the corresponding
grade human quality certificates upon passing human quality examination.

Article 14

Specialized technical personnel engaging in building operations shall obtain corresponding qualification certificates for operations
in accordance with law and engage in building operations within the scope permitted by the qualification certificates for operations.

Chapter III Construction Project Contract Issuance and Contracting

Section 1 General Rules

Article 15

The contract issuing unit and contracting unit of a construction project shall conclude a contract in writing according to law expressly
defining the rights and obligations of the parties.

The contract issuing unit and contracting unit shall comprehensively fulfil the obligations agreed in the contract. The party that
fails to fulfil the obligations pursuant to the agreement in the contract shall bear the liability for the breach of the agreement
according to law.

Article 16

Invitation to tender and bidding of the tender of contract issuance and contracting of a construction project shall follow the principle
of openness, fairness and equal competition and the contracting unit shall be selected on merit.

For invitation to tender and bidding of the tender of construction projects not prescribed by this Law, provisions of laws relating
to invitation to tender and bidding of the tender shall apply.

Article 17

A contract issuing unit and its staff members shall not, in the contract issuance of a construction project, accept bribes and commissions
or seek other benefits.

A contracting unit and its staff members shall not employ such unfair means as offering bribes, commissions or giving other benefits
to the contract issuing unit and its staff members to contract the project.

Article 18

The cost of a construction project shall, pursuant to relevant state provisions, be agreed upon by the contract issuing unit and the
contracting unit in the contract. For a construction project with invitation to open tender, the agreement on its cost shall abide
by the provisions of laws on invitation to tender and bidding.

The contract issuing unit shall, pursuant to the agreement in the contract, make allocations for the project in time.

Section 2 Contract Issuance

Article 19

Construction projects shall practise contract issuance by invitation to tender in accordance with law; those construction projects
not suitable for contract issuance by invitation to tender may adopt direct contract issuance.

Article 20

For a construction project for invitation to open tender, the contract issuing unit shall, pursuant to the legal procedures and mode,
publish a tender notice providing tender documents carrying such contents as major technical requirements of the project open to
tender, main articles of the contract, standards and methods of bid evaluation as well as procedures of bid opening, bid evaluation
and bid finalization.

Bid opening shall be held in public at the time and place prescribed in the tender document. Evaluation and comparison of bid proposals
shall be carried out pursuant to the standards and procedures for bid evaluation prescribed in the tender document after the bids
are opened, and selection of the winning bidder made from among bidders with corresponding human quality qualifications on merit.

Article 21

Bid opening, bid evaluation and bid selection of the construction project open to tender shall be organized and carried out by the
construction unit according to law and subject to the supervision of the competent administrative departments concerned.

Article 22

For a construction project following contract issuance through tender, the contract issuing unit shall award the contract of the construction
project to the contracting unit winning the bid in accordance with law. For a construction project following direct contract issuance,
the contract issuing unit shall award the contract of the construction project to the contracting unit with corresponding human quality
qualifications.

Article 23

The Government and its subordinate departments shall not abuse their administrative powers in restricting contract issuing units in
awarding contracts of construction projects following contract issuance through tenders to designated contracting units.

Article 24

General contracting of construction projects shall be encouraged and dismemberment of contract issuance of construction projects shall
be prohibited.

The contract issuing unit of a construction project may award in total the contract of surveying, design, construction and equipment
procurement of the construction project to a general contracting unit of the project. It may also award one item or several items
of surveying, design, construction and equipment procurement of the construction project to a general contracting unit of the project;
however, it shall not dismember a construction project which should be completed by one single contracting unit into several parts
for awarding contracts to several contracting units.

Article 25

For building materials, building structural pieces and parts and equipment to be procured by the contracting unit of the project pursuant
to the agreement in the contract, the contract issuing unit shall not designate the contracting unit in the procurement of building
materials, building structural pieces and parts and equipment for the project, nor shall it designate the manufacturers and suppliers
of the same.

Section 3 Contracting

Article 26

The contracting units of construction projects shall contract projects with human quality certificates obtained in accordance with
law and within the business scope permitted by their human quality grades.

Building construction enterprises shall be prohibited to contract projects beyond the business scope permitted by their respective
human quality grades or in the name of other building construction enterprises in any form. Building construction enterprises shall
be prohibited to permit in any form other units or individuals in the use of their human quality certificates, business licences
to contract projects in the name of their respective enterprises.

Article 27

Large construction projects or construction projects with complex structures may be jointly contracted by more than two contracting
units. Parties to the joint contract shall bear joint responsibilities in the implementation of the contract.

In the case of a joint contract by more than two units with different human quality grades, the project shall be contracted in accordance
with the business scope granted to the unit with lower human quality grade.

Article 28

Subcontracting to others of the entire construction project contracted by the contracting unit shall be prohibited. Subcontracting
to others in the name of subcontracting after dismemberment of the entire construction project contracted by the contracting unit
shall be prohibited.

Article 29

The general contracting unit of a construction project may award contracts of parts of the contracted project to subcontracting units
with corresponding human quality qualifications; however, except for the subcontracting agreed upon in the general contracting contract,
acknowledgement of the construction unit shall be obtained. In the case of general contracting of construction, construction of the
main structure of the construction project must be completed by the general contracting unit itself.

The general contracting unit of a construction project shall, pursuant to the agreement in the general contracting contract, be responsible
to the construction unit; subcontracting units shall, pursuant to the agreement in the subcontracts, be responsible to the general
contractor. The general contracting unit and subcontracting units shall bear joint responsibility to the construction unit in respect
of the subcontracted projects.

The general contracting unit is prohibited to subcontract the project to units with no corresponding human quality qualifications.
The subcontracting unit shall be prohibited to re-subcontract the project it has contracted.

Chapter IV Construction Project Supervision and Control

Article 30

The State practises the construction project supervision and control system.

The State Council may determine the scope of mandatory supervision and control of construction projects.

Article 31

The construction unit of a construction project under supervision and control shall entrust the supervision and control with an engineering
supervision and control unit with corresponding human quality qualifications. The construction unit and its entrusted engineering
supervision and control unit shall conclude a contract for entrustment of supervision and control in writing.

Article 32

The construction project supervisor-controller shall, pursuant to the laws, administrative regulations as well as relevant technical
standards, design documents and the construction project contractual contract, exercise supervision over the contracting unit in
construction quality, construction schedule and use of construction funds on behalf of the construction unit.

Engineering supervisors have the power to ask the building construction enterprise to make corrections when they hold that construction
of the project does not conform to engineering design requirements, construction technical standards and agreement in the contract.

Engineering supervisors shall, upon discovery of engineering design not in conformity with construction project quality standards
or quality requirements agreed in the contract, report to the construction unit to ask the design unit to make corrections.

Article 33

The construction unit shall, prior to the exercise of supervision and control over the construction project, notify the building construction
enterprise to be put under supervision and control in writing of the entrusted engineering supervision and control unit, the contents
of supervision and control and terms of reference in supervision and control.

Article 34

An engineering supervision and control unit shall undertake engineering supervision and control business within the scope of supervision
and control permitted for its human quality grade.

The engineering supervision and control unit shall, in accordance with the entrustment of the construction unit, conduct the missions
of supervision and control objectively and fairly.

The engineering supervision and control unit and the contracting unit of the project under supervision and control as well as supply
units of building materials, building structural pieces and parts and equipment shall not have subordinate relationship or other
relations of interest.

The engineering supervision and control unit shall not transfer its engineering supervision and control business.

Article 35

An engineering supervision and control unit shall bear corresponding liability of compensation in the case of failure to fulfil the
obligations of supervision and control agreed in the contract of entrustment of supervision and control, not carrying out inspection
or carrying out inspection not in accordance with the provisions over items which should have been put under supervision and inspection,
thus causing losses to the construction unit.

An engineering supervision and control unit shall bear joint liability of compensation with the contracting unit for collusion in
gaining illegal interests for the contracting unit thus causing losses to the construction unit.

Chapter V Construction Production Safety Management

Article 36

Construction project production safety management must adhere to the policy of safety first and prevention first, establish and perfect
the responsibility system of production safety and the system of prevention and treatment by the masses.

Article 37

Construction project design shall conform to the construction safety procedures and technical standards formulated in accordance with
state provisions to ensure the safety performance of the project.

Article 38

A building construction enterprise shall work out corresponding safety technical measures according to the characteristics of the
construction project in the compilation of design for construction organization; for speciality-intensive items of the project, design
for special-purpose safety construction organization shall be compiled and safety technical measures taken.

Article 39

A building construction enterprise shall take such measures as the maintenance of safety, precautions against danger and fire prevention
at the construction site; where there are the required conditions, construction site closed management shall be followed.

A building construction enterprise shall take safety protection measures in the case of the construction site causing possible damage
to its adjoining buildings, structures or special operational environment.

Article 40

The construction unit shall provide the building construction enterprise with the relevant information on underground piping and wiring
of the construction site, and the building construction enterprise shall take measures for their protection.

Article 41

The building construction enterprise shall abide by the provisions of the laws and regulations relating to environmental protection
and safety in production and take control and disposal measures at the construction site of various kinds of dust, waste gas, waste
water, solid waste as well as noise, vibration polluting and damaging the environment.

Article 42

A construction unit shall, pursuant to the relevant state provisions, go through the formalities of application for approval in case
of any of the following circumstances:

(1)

need of temporarily occupying sites beyond the approved planned scope;

(2)

possibility of damaging such public facilities as roads, pipes and cables, electricity, postal service and telecommunications;

(3)

need of temporary suspension of water supply, electricity supply and suspension of road traffic;

(4)

need to conduct explosion operations; and

(5)

other circumstances requiring going through the formalities of application for approval as prescribed by laws and regulations.

Article 43

The competent department of construction administration shall be responsible for the administration of construction safety in production
and subject to the guidance and supervision of the competent department of labour in construction safety in production in accordance
with law.

Article 44

A building construction enterprise must, in accordance with law, strengthen construction safety production management, implement the
safety production responsibility system and take effective measures to prevent casualties and other accidents in safety production
from taking place.

The legal representative of a building construction enterprise shall be responsible for the safety in production of the enterprise.

Article 45

The building construction enterprise shall be responsible for the construction site safety. The general contracting unit shall be
responsible for the construction site safety of the project under general contract for construction. Subcontracting units shall be
responsible to the general contracting unit and subordinate themselves to the management of the general contracting unit for construction
site safety in production.

Article 46

Building construction enterprises shall establish and perfect the educational and training system of safety in labour and production,
step up the education and training of workers and staff members in safety in production; no personnel without undergoing education
and training in safety in production shall take up posts in operations.

Article 47

Building construction enterprises and their personnel shall, in the process of construction, abide by the laws and regulations relating
to safety in production and safety regulations and procedures of the building industry, and shall not give command in contravention
of regulations or operate in contravention of regulations. Operators have the right to put forth suggestions for improvement with
regard to the operational procedures and operational conditions adversely affecting physical health and have the right to obtain
protective gear necessary for safety in production. Operators have the right to make criticism, report the case of and file charges
against acts endangering lives, safety and physical health.

Article 48

Building construction enterprises must insure workers and staff members engaging in dangerous operations against accidental injuries
and pay the insurance premium.

Article 49

In restoration or rehabilitation project involving the main body of the building and changes in the weight-bearing structure, the
construction unit shall, prior to the construction, entrust the original design unit or a design unit with corresponding human quality
qualifications to put forth a design proposal; where there is no design proposal, no construction shall be undertaken.

Article 50

Dismantling of houses shall be undertaken by building construction units with conditions to ensure safety and the person-in-charge
of the building construction units shall be responsible for the safety.

Article 51

In the event of an accident in the process of construction, the building construction enterprise shall take emergency measures to
reduce casualties of personnel and losses caused by the accident, and submit a report in time to the departments concerned pursuant
to relevant state provisions.

Chapter VI Construction Project Quality Control

Article 52

The quality of survey, design and construction of a construction project must conform to the requirements of state safety standards
relating to construction projects. Specific control measures shall be formulated by the State Council.

State standards relating to safety in construction projects shall be revised in time when they are unable to adapt to the requirements
of ensuring safety in building.

Article 53

The State practises the quality system authentication system with respect to units engaging in building operations. Units engaging
in building operations may, in accordance with the principle of voluntarism, apply for quality system authentication to authentication
agencies acknowledged by the department of product quality supervision administration under the State Council or by the authorized
departments of the department of product quality supervision administration under the State Council. Authentication agencies shall
issue quality system authentication certificates to those having qualified for the authentication.

Article 54

No construction unit shall, with whatever reasons, ask the building design unit or building construction enterprise to lower the project
quality in project design or construction operations in violation of the laws, administrative regulations and quality and safety
standards of construction projects.

The building design unit and building construction enterprise shall reject the requests of the construction unit for lowering the
project quality in violation of the provisions of the preceding paragraph.

Article 55

For a construction project under general contract, the general contracting unit shall be responsible for the project quality. In the
case of the general contracting unit subcontracting out the construction project to other units, the former shall bear joint responsibility
with the subcontracting units of the quality of the subcontracted projects. The subcontracting units shall subject themselves to
the quality control of the general contracting unit.

Article 56

The survey and design units of a construction project shall be responsible for the quality of their survey and design. Survey and
design documents shall conform to the provisions of relevant laws and administrative regulations and construction project quality
and safety standards and technical standards for construction project survey and design as well as the agreement in the contract.
Such technical indexes as the specifications, types and characteristics of building materials, building structural pieces and parts
and equipment selected in the design documents shall be annotated and their quality requirements shall conform to the standards prescribed
by the state.

Article 57

No building design unit shall designate manufacturers or suppliers of the building materials, building structural pieces and parts
and equipment selected in the design documents.

Article 58

The building construction enterprise shall be responsible for the construction quality of a project.

The building construction enterprise must proceed with the construction in accordance with the project design drawings and construction
technical standards and shall not do shoddy work and use inferior materials. The original design unit shall be responsible for revisions
in the project design and the building construction enterprise shall not revise the project design on its own.

Article 59

The building construction enterprise must carry out inspections over the building materials, building structural pieces and parts
and equipment in accordance with the requirements of the project design, construction technical standards and agreement in the contract
and shall not use those that fail to pass the inspection.

Article 60

A building must ensure the quality of its ground foundation project and the main part of the structure within its life expectancy
of rational use.

No such quality flaws as leakage, seepage and cracks in roofs and on wall surfaces shall remain upon completion of a construction
project; the building construction enterprise shall repair the quality flaws discovered.

Article 61

A construction project handed over for completion acceptance checks must conform to the prescribed construction project quality standards,
have complete project technical and economic information and signed project warranty, and have qualified other conditions for completion
prescribed by the state.

A construction project may only be handed over for use upon passing the acceptance checks; no construction project shall be handed
over for use without going through the acceptance checks or passing the acceptance checks.

Article 62

Construction projects practise the quality warranty system.

The scope of warranty of a construction project shall include the ground foundation project, main part structural project, roof waterproof
project and other civil engineering projects as well as installation projects of electrical wiring and water piping and drainage
and projects of the heating and cooling systems; the duration of warranty shall be determined in accordance with the principle of
ensuring the normal use of the building within its rational life expectancy and safeguarding the legitimate rights and interests
of the user. Specific warranty scope and minimum warranty duration shall be laid down by the State Council.

Article 63

Any unit or individual has the right to report to, file a charge or lodge a complaint with the competent department of construction
administration or other departments concerned about quality accidents and quality flaws of construction projects.

Chapter VII Legal Liability

Article 64

For construction on one’s own without obtaining a building permit or without obtaining approval of the report for the start of construction
in violation of the provisions of this Law, an order shall be issued for making corrections; that which does not conform to the conditions
for the start of construction shall be ordered to stop construction and may be imposed a fine.

Article 65

In the case of the contract issuing unit issuing contracts of a construction project to contracting units without co

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