On May 20, the General Office of the Ministry of Housing and Urban-Rural Development issued the "Circumstances of Investigation and Handling of Illegal and Non-compliant Acts such as Construction Project Contracting and Illegal Subcontracting in 2023," in which a total of 8,173 instances of illegal and non-compliant acts in construction project construction were identified. Among them, 6,126 instances involved other illegal and non-compliant acts such as commencing construction before obtaining a construction permit, accounting for 74.9%.

According to statistics, housing and urban-rural development authorities across 31 provinces, autonomous regions, and municipalities directly under the Central Government, as well as the Xinjiang Production and Construction Corps, conducted a total of 314,619 project inspections, involving 244,128 construction unit inspections and 275,049 construction enterprise inspections.

A total of 8,173 instances of illegal and non-compliant acts in construction project construction were identified. Among them, 583 instances involved illegal contracting, accounting for 7.1%; 464 instances involved subcontracting, accounting for 5.7%; 830 instances involved illegal subcontracting, accounting for 10.2%; 170 instances involved qualification affiliation, accounting for 2.1%; and 6,126 instances involved other illegal and non-compliant acts such as commencing construction before obtaining a construction permit, accounting for 74.9%.

A total of 2,585 construction unit inspections and 5,994 construction enterprise inspections were conducted and handled for the existence of illegal and non-compliant acts. Among them, 572 construction unit inspections involved illegal contracting, and 2,013 involved other illegal acts such as commencing construction before obtaining a construction permit; 492 construction enterprise inspections involved subcontracting, 848 involved illegal subcontracting, 133 involved affiliation, 112 involved lending qualifications, and 4,409 involved other illegal and non-compliant acts.

In terms of the total number of illegal and non-compliant construction projects investigated and handled, five provinces (municipalities)—Sichuan, Jiangsu, Hubei, Jiangxi, and Chongqing—investigated and handled a relatively large number of projects, with 809, 802, 716, 656, and 591 instances respectively.

Screenshot from the official website of the Ministry of Housing and Urban-Rural Development

In terms of the four categories of illegal and non-compliant acts investigated and handled—illegal contracting, subcontracting, illegal subcontracting, and affiliation—five provinces—Hubei, Hebei, Sichuan, Jiangsu, and Jiangxi—investigated and handled a relatively large number of projects, with 305, 229, 162, 141, and 137 instances respectively.

In terms of the amount of fines, five provinces—Hainan, Hubei, Jiangxi, Henan, and Liaoning—imposed relatively large fines, with 127.1023 million yuan, 61.16 million yuan, 60.8987 million yuan, 38.5265 million yuan, and 34.0586 million yuan respectively.

In response to the various illegal and non-compliant acts mentioned above, local housing and urban-rural development authorities imposed administrative penalties or administrative management measures on the enterprises and individuals involved, including suspension of business for rectification, revocation of qualifications, and restriction of bidding eligibility.

Among them, 201 enterprises were ordered to suspend business for rectification, 7 enterprises had their qualifications revoked, 108 enterprises had their bidding eligibility restricted, and 1,930 enterprises were subjected to measures such as circulated criticism and credit punishment; 21 individuals were ordered to stop practicing, and 1,670 individuals were subjected to measures such as circulated criticism; the total amount of illegal gains confiscated was 11.616 million yuan (including 205,200 yuan in illegal gains by individuals), and the total amount of fines was 611.4189 million yuan (including 38.0408 million yuan in fines on individuals).

The General Office of the Ministry of Housing and Urban-Rural Development required that, next, housing and urban-rural development authorities at all levels must seriously investigate and handle illegal and non-compliant acts such as illegal contracting, subcontracting, illegal subcontracting, affiliation, construction before approval, bid rigging and collusion, undertaking projects beyond qualification levels, arbitrarily compressing reasonable construction periods, and defaulting on migrant workers' wages.

Adhere to "strict supervision and heavy penalties," severely punish in accordance with the law a number of enterprises and individuals that have committed illegal and non-compliant acts, summarize typical cases, and comprehensively use means such as public exposure, warning interviews, situation notifications, economic penalties, restriction of bidding, and revocation of qualifications to maintain a high-pressure stance against illegal and non-compliant acts in the construction market, form a strong deterrent, and achieve the comprehensive effect of investigating and handling one batch, warning a broad area, and governing a whole region.

Provincial housing and urban-rural development authorities shall strengthen supervision and guidance over the work of municipal and county-level housing and urban-rural development authorities, designate responsible persons for supervision, regularly notify the progress of construction market supervision work in each city and county within their administrative regions, and provide key assistance to areas with insufficient supervision capacity and prominent market problems, striving to promote the resolution of a number of major, long-pending, and accumulated cases.

Provincial housing and urban-rural development authorities shall strengthen data verification and control, seriously handle verified illegal and non-compliant acts in accordance with laws and regulations, further improve the quality and timeliness of case investigations, and provide feedback on handling results on time.