In the first half of this year, a rare phenomenon has emerged in the Chinese construction industry – large-scale infrastructure projects led by state-owned enterprises and central enterprises frequently faced “bidding failure”. According to preliminary statistics, in just the first quarter, out of 700 projects listed in bid announcements jointly issued by 12 top companies, nearly half of them received no bids, with almost 3 consecutive rounds of bidding no one showing interest. A board member of a contracting company in Jiangsu revealed that the company is owed 1.1 billion yuan in project funds by China Railway and has been unable to recover the amount for several years.
On platforms like Douyin and WeChat, many construction firms and netizens have expressed that projects led by state-owned and central enterprises are now considered “untouchable”. The reason being that the substantial upfront investment made by contractors is often difficult to recoup, and cases of bidding entities suddenly closing down have been reported. One blogger lamented, “In 2025, why is no one taking on projects from China State Construction and China Railway? It’s because their projects often require advance funding, deposit payments, and are subject to potential deductions at any time. The real issue is the delayed settlement of completed projects. The profitable projects are kept in-house, while the ones that are not lucrative are put up for bidding. For a project worth 1 billion yuan, they take away half of it upfront.”
Another blogger gave an example, stating that billion-dollar projects led by state-owned and central enterprises are no longer attractive opportunities. Recently, the bidding for the Anhua section of the Changji Expressway in Zhejiang, with a total investment of 25.6 billion yuan, failed to attract bidders for three consecutive rounds. There is a saying within the industry: “One year for construction, five years for audit, and a decade to collect payments.” Even more exaggerated is a highway renovation project worth 320 million yuan, which has been put up for bid five times since last year with no takers. The blogger concluded, “The reputation of state-owned and central enterprises has crumbled.”
Construction firms have summarized three ironclad rules: reject projects requiring an advance payment exceeding 30%; refuse projects requiring an advance period of over six months, and steer clear of projects that will completely strain their cash flow. They label central enterprise projects as bottomless pits that may ultimately lead to financial ruin.
Liu Dan, a real estate developer now residing in Malaysia, shared with reporters that on the surface, these multi-billion and even hundred-billion projects seem like “fat cows”, but most small and medium-sized construction enterprises prefer to take on “small deals” such as wall repairs and interior renovations rather than central enterprise projects. Liu recounted an experience in Yunnan where he took on a multi-billion project only to have the state-owned enterprise unexpectedly go bankrupt last year, resulting in his invested billions going down the drain. With partners demanding repayment, he had nowhere to turn but to temporarily seek refuge overseas.
In construction circles, many industry insiders have reported that projects require upfront payment of deposits before starting, continuous additional funding during construction, leading to complete funds lockup. A billion-dollar project gets subcontracted multiple times, leaving only a fraction of the contract amount in the end. There are complaints such as, “My uncle has been working on projects for China Railway for ten years and still hasn’t settled the account.”
Mr. Zhu, a board member of a major construction company in Jiangsu, stated, “Six years ago, my company, alongside my brother-in-law’s company, worked on a China Railway project with an advance payment of 1.1 billion yuan which we have yet to recover. No one dares to report it to the media, and the court delays court hearing the case. The developers claim they have no money, and this is the norm in our industry.”
Mr. Yao, a subcontractor in Zhejiang, recalled accepting a segment of a highway project in 2020 with a contract value of 50 million yuan. However, he was asked to pay over 5 million yuan in a security deposit and was charged various management fees. “After a year, I still haven’t received any payment. Everyone is scared.”
Liu Dan mentioned that after central enterprises win bids, they retain the most profitable parts within their subsidiaries and subcontract the rest layer by layer. By the time the grassroots construction team takes over, the contract amount has been significantly reduced. Yet, all the risks are passed down to the lowest level workers.
Experts have noted that state-owned enterprises often do not publicly bid for projects that offer stable returns and significant profits, with such projects mostly kept in-house. The ones that do enter the market are often projects with significant fund commitments, low profits, and high risks.
Liu Dan believes that the mass bidding failures of projects from state-owned and central enterprises indicate a growing integrity crisis within these companies: “Central enterprises are dominant, leaving little room for negotiation for private enterprises. The responsibilities outlined in contracts are unclear, coupled with strained local finances and inadequate accompanying funds, making payment collection uncertain. Some state-owned enterprises close down, and the government does not step in to settle debts. I have witnessed too many cases like this.”
According to data from the United Credit Information, the total national fixed asset investment in 2024 was 51.44 trillion yuan, a 3.2% year-on-year increase. While infrastructure investment continues to grow, investment in real estate development has decreased by 10.6%. New construction and completion areas have declined significantly, and inventory digestion still requires time. Against this backdrop, central enterprises, benefiting from low financing costs and strong policy support, have taken a dominant position, further squeezing the survival space of privately-owned construction enterprises.