In the past three years, the project investment market of countries affected by the epidemic has been sluggish, and the overseas turnover of the world's largest 250 international contractors has dropped from 487.20 billion US dollars in 2018 to 473.07 billion US dollars in 2019, 420.35 billion US dollars in 2020 and 397.85 billion US dollars in 2021, a decrease of 18.3% in three years.

The operation of China's foreign contracted engineering enterprises is also affected by the shrinking size of the international engineering market. Since 2018, the newly signed contracts of China's foreign contracted projects have reached 241.8 billion US dollars, a year-on-year decrease of 9.7%, and have been in a state of ups and downs. The amount of newly signed contracts and completed turnover in 2022 were $253.07 billion and $154.99 billion, respectively, down 4.6% and 8.1% from 2017. Combined with the impact of Sino-US trade friction, the new coronavirus epidemic and the Russia-Ukraine conflict, industry peers have some confusion and confusion about how to do foreign contracting projects at present, and they also actively think: where is the path of future development?

The industry peers generally believe that the integration of investment and construction and localization is a good strategy for foreign contracted engineering enterprises to cope with the current international engineering market difficulties and focus on the sustainable long-term development of enterprises, which the author very much agrees with. At the same time, the author believes that cooperative management is also a good strategy.

As the scale of the international engineering market shrinks, the competition in the industry intensifies. Taking the loan projects of the World Bank and other international multilateral financial institutions as an example, they have (1) reliable funding sources; (2) Having foreign exchange; (3) Open bidding, qualified enterprises can participate in the bidding; (4) Generally the lowest bid; (5) Adopt FIDIC contract terms and conditions, and the contract terms are fair; (6) Advantages of supervision standards. As a result, competition is fierce, and the winning price has been as low as 60% of the bottom bid. It can be imagined that if the enterprise does not have the accumulation of resources such as the capital of the material machine in the local market in the past few years, it will be a huge challenge to rash-heartedly contract such projects at low prices. In fact, the scene of excessive competition not only occurs in the World Bank and other international multilateral financial institutions loan projects, other sources of funding projects also show a similar situation.

In the past three years, the scale of the international engineering market has declined year by year, and more and more enterprises in China's foreign contract engineering industry have gone out. When there are more and more people, the competition between Chinese and foreign enterprises, the competition between Chinese enterprises, and even the competition between brother enterprises in the same group has intensified. The enterprises that can't get the project are bitter, and the enterprises that are lucky to get the project are also bitter, because the price is too low. In this context, cooperative operation can alleviate excessive competition and help foreign contractors to play their respective strengths and achieve win-win and sustainable development.

Regarding cooperative management, the author has the following suggestions. For some major projects, leading enterprises should take out the business they are not good at to the company with professional ability to do, and cooperate through the consortium or general subcontracting to reduce unnecessary competition. In the past few years, some leading enterprises have achieved remarkable results in leading upstream and downstream enterprises of the whole industrial chain to "go global" in major projects, such as the series of projects of the Djibouti Railway and its economic corridor, from design, supervision, financing, construction, supply and operation, from the railway to the port of Djibouti, from the Ethiopian Industrial Park to the Djibouti International Free Trade Zone. From the Addis Ababa Riverfront Green development to the Djibouti East Africa International Special Business District, a few companies have taken the lead and a large number of businesses have benefited. This practice and model should be encouraged and promoted.

Investment enterprises and engineering enterprises should strengthen cooperation and rely on each other. Investment enterprises should take advantage of engineering enterprises' technology and engineering management capabilities, and engineering enterprises should take advantage of project opportunities provided by investment enterprises. In recent years, some enterprises with financial strength have realized the value of investment and investment-driven projects, opened the integrated business of investment + engineering, investment and construction, and even set up special international investment companies to promote foreign trade and foreign contracting projects through direct investment in mining/oil/real estate/manufacturing/agriculture/logistics/commerce/others. For example, investment in Africa's undeveloped mineral resources, or through investment, construction and operation integration projects to promote foreign contracting projects such as: airports, ports, roads, railways and other transportation infrastructure projects; Electricity, water, hospitals and other livelihood projects; Waste incineration, sewage treatment and other environmental protection projects; Park (free trade zone, industrial park) projects, etc.

In the construction + operation phase, such investment projects bring new business opportunities for foreign contracted engineering enterprises. SMB-WinningConsortium was formed by four companies, namely, Singapore Wei Li International Group, China Hongqiao Group under Shandong Weiqiao Venture Group, Guinea UMS and China Yantai Port Group. Smb-winningconsortium successfully invested in the construction and operation of Guinea Saint Tu-Hooda bauxite mining area + Da Sheng Railway (125 km) in Guinea. A number of foreign contracted engineering enterprises participated in the construction and operation of this project, and achieved win-win results.

State-owned enterprises and private enterprises should strengthen cooperation and support each other. According to the overseas turnover, the author divides the foreign contract project enterprises into leading enterprises (annual turnover of more than 2 billion US dollars)+ seven tiers, such as the first tier (annual turnover of more than 1 billion US dollars), the second tier (annual turnover of more than 500 million US dollars), the third tier (annual turnover of more than 300 million US dollars), the fourth tier (annual turnover of more than 100 million US dollars), and the third tier (annual turnover of more than 300 million US dollars). The fifth tier (annual turnover of more than $50 million), the sixth tier subcontractors, and the seventh tier provides labor services. Among them, there are many private enterprises below the third tier, and some private enterprises are also listed in the ranks of the world's largest 250 international contractors.

Central enterprises, state-owned enterprises and private enterprises have their own advantages in the international engineering market. Leading enterprises and the first echelon have basically realized the business pattern of global operation and integration of investment, construction and operation, and are at the forefront of the development of the industry, while private enterprises are in the stage of national operation and project management, and are very good at professional aspects. They should strengthen cooperation and form a strategic partnership for common development.

The general contractor shall treat the subcontracting well and pay the project payment in time. The subcontractor shall maintain the general contractor and complete the subcontracting project well. In 2020, the value of China's new overseas contract projects will reach US $255.54 billion. Among them: the total amount of new contracts signed by the top 10 leading enterprises was 155.37 billion US dollars, accounting for 60.8% of the total amount of new contracts signed; The new contracts signed by the top 100 backbone enterprises totaled US $236.86 billion, accounting for 92.6% of all new contracts signed.

The following conclusions can be drawn from these two sets of data: First, the concentration of China's foreign contracted engineering industry is getting higher and higher; Second, the vast majority of enterprises go out as subcontractors following the general contractor; Third, the general and subcontracting mode is the main mode of cooperation between Chinese foreign contractors. In China's foreign contracting engineering industry, only a small number of enterprises have always been the general contractor, and only a small number of enterprises have always been the subcontractor, the vast majority of enterprises are both the general contractor and subcontractor. When doing the general contractor, we should understand the difficulties of the subcontractor, and when doing the subcontractor, we should think of the difficulties of the general contractor. The general contractor and subcontractor should strengthen cooperation, form a community of interests, and jointly handle the relationship with the owner and the supervisor. Editor/Xu Shengpeng