Post and Courier
December 24, 2014

China Construction America growing by leaps and bounds

Posted: 06/08/2014 12:01 a.m.


By Robert Behre

Most parents realize their children's toys and clothes are made in China, but their public schools?

Increasingly, the answer is yes, those too.

One of South Carolina's newest and largest contractors is China Construction America, a company that established a toehold in South Carolina 15 years ago and a subsidiary of the company that has built some of China's most recognizable new buildings.

During the past decade, the company has branched out to all sorts of public projects here, including the state's largest high school in Lexington County, the current reconstruction of Charleston County's St. Andrews School of Math and Science and several other eight-figure projects.

While some question the wisdom of South Carolina governments spending tax dollars with a company that is a wholly owned subsidiary of China, others say the company is doing good work.

And they note local and state governments' hands are tied, as state law doesn't let a school district reject a low bid because of Chinese ties any more than it would if those ties were to any other state or country.

Charleston County School Board Chair Cindy Bohn Coats said board members voted recently to award a $20.7 million contract to China Construction America because it was the lowest responsive bidder, period.

"There is an eyebrow-raising factor," she said, "but we weren't going to go down the road and say we're going to violate state procurement code because we don't want to hire somebody."

From refrigerators to cool schools

The company's rise in America was the topic of a 2009 Harvard Business School study, which noted that years before China's "Go Global" initiative in 2000, its government was urging major construction companies to undertake projects in developing countries. China State Construction Engineering Corp., the parent company of China Construction America, began working outside China in 1978.

At home, CSCEC has built some of China's newest landmarks, such as the "Water Cube," the nickname for the Beijing National Aquatics Centre, and the new headquarters for China Central Television, a building Beijing residents affectionately refer to as "The Big Pants."

In 1998, five years after China Construction America incorporated in Delaware, the company was able to land a contract to build a 300,000-square-foot refrigerator assembly plant in Camden for Haier, a company based in Qingdao, China.

"The Haier plant had given CCA a strong start in South Carolina," the Harvard report noted, "but Haier was the only Chinese company operating in this Southeastern state.

The report also quoted CCA President Ning Yuan saying that in the private sector, companies can decide who they want to hire and often have their own preferences. But in the public sector, Ning noted, "the lowest bidder gets the project."

Bing Jia, a vice president for China Construction America of SC, said the company also has been attracted to this state because of its relatively low unionization rate. The state ranks 49th out of the 50 states in terms of unionized workers.

"We don't do a lot of projects per year," he said. "We focus on larger projects, anything above $10 million."

While some news stories and letters to the editor have called into question the wisdom of public contracts with the company, Bing said, "I feel like the people of South Carolina are very nice to us, very friendly to us."

While Bing was born in China, he received a degree from the University of South Carolina. "I don't really feel there's much difference between us and an American company," he said. "We are a local business, too, in a way. We consider ourselves a local business."

'So far, doing well'

China Construction was the general contractor that renovated the North Charleston Coliseum, a $12.5 million job that extended the Montague Terrace's wings and built a new ticket booth and kitchen pantry.

That job began in 2010 and was finished in late 2011 - "within the budget and on schedule," North Charleston spokesman Ryan Johnson said.

Earlier this year, Trident Technical College unveiled its new 90,000-square-foot Nursing and Science Building, a $30 million project also built by China Construction America of South Carolina. It features classrooms, science labs, a 300-seat divisible tiered classroom, a nursing resource center, and nursing simulation labs with programmable mannequin patients.

Its largest project was finished just recently - the $76 million River Bluff High School in Lexington School District 1.

Ted McGee, a Lexington County resident, said the River Bluff contract was a hot topic, though other aspects of the school, such as its size and effect on local traffic, also were debated.

"There was and always will be controversy any time you hire a foreign company to come into South Carolina and take the money and profit out of the country," he said. "If they're government subsidized, they can bid low."

Still, the company built the school on time and under budget, said Jeff Salters, the district's chief operations officer.

"They were very reasonable to work with," he said, adding that the company owned up to any errors or problems. "They did not 'change order us to death,' " he said.

Salters said while there was a news article that pointed out the company's China roots, those concerns "really died down" after the company hired several local subcontractors. "People quickly realized everything was being performed by folks that we worked with in the past, neighbors and friends and good contractors in the community," he said.

And Bing said about 90 to 95 percent of CCA workers are local hires, not immigrants from China. "We have only five people from China," he said.

Meanwhile, the company is having similar success with the St. Andrews Math and Science school.

"So far, they are doing well," said Bill Lewis, who monitors construction work for the Charleston County School District. "Like all projects, general contractors have challenges, but they have been up to them so far."

Are state procurement codes OK?

As River Bluff was being completed, one opinion posted on The Lexington Anchor website noted that South Carolina's law - unlike federal procurement law - has no Buy American provisions.

"And there are no protections in the law favoring Lexington County companies where, as in the case of River Bluff High School, only Lexington County public money is being spent," it said. "Any changes in the law to benefit our local businesses and keep our tax dollars locally would have to be made by our state government.

"Do we hate to see our local money go to a company backed by a repressive government that suppresses human rights, pirates technology and promotes child labor?" it asked. "Did our school board have an option to not award the River Bluff construction contract to the low bidder China Construction America? No," the post said.

Former state Rep. Gloria Haskins, R-Greenville, proposed legislation to address this a few years ago, but it didn't pass - and no similar bills are pending, said Otis Rawl, president of the S.C. Chamber of Commerce.

And Rawl said that's a good thing because such legislation could work against other foreign companies with a strong South Carolina presence, such as BMW, Michelin, Continental and Bridgestone.

Rawl said he has talked to people about China Construction America and learned that the company does use South Carolina subcontractors and businesses. He said if CCA succeeds because its pencil is a little sharper, then that's a sign local contractors need to step up their game.

"We hate to be like that, but business is business," he added. "It's all about competition and competition should drive cost and should drive prices."

And in the case of public projects, such as schools and bridges, China Construction America's success helps more than just that company.

"It actually holds down the cost to the taxpayer," Rawl said. "It does keep taxes down lower for taxpayers in the communities where they're working."

Reach Robert Behre at 937-5771.