Huai'an China News and Events
Huai'an Issued the Implementation Opinions on Construction Guarantee

The State Council and the government of Jiangsu issued the "implementation opinions by the general office of the State Council on further optimizing the business environment and better serving the market entities" and the "guiding opinions on promoting the implementation of the guarantees for housing construction and municipal infrastructure projects" respectively. To better implement the two documents, the Bureau of Housing and Urban-Rural Development of Huai'an, together with the Development and Reform Commission, Municipal Bureau of Finance, Huai'an Central Sub-branch of the People's Bank of China, the Banking and Insurance Regulatory Bureau, and Business Office of the Municipal Party Committee of Huai'an issued the opinions on promoting the implementation of the guarantees for housing construction and municipal infrastructure projects in Huai'an.

The opinions specify different types of guarantee. In the administrative region of Huai'an, the housing construction and municipal infrastructure projects which are controlled or dominated by state-owned capital should be subject to construction guarantee. Other projects should be subject to project payment guarantee and are encouraged to apply construction guarantees of different types. The opinions are applicable to lump-sum contracts. The construction guarantees include bid guarantees, contractor performance guarantees, project payment guarantees of the employers, project quality warranty guarantees, and payment guarantees for migrant workers' wages. Construction guarantees can be in the form of bank guarantee, insurance policies of insurance companies, and cash. And it is encouraged to replace cash guarantee with bank guarantees and insurance policies of insurance companies.

Cash guarantee used to be the only form of guarantee for construction enterprises, and this practice caused tremendous pressure to enterprises' cash flow. The comprehensive implementation of construction guarantees will reduce the burden of enterprises to a great extent, stimulate the vitality of construction market entities, enhance enterprises' awareness of honesty and credit, prevent and resolve construction risks, ensure project quality, and promote the sustainable and healthy development of the construction industry.