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An exploratory analysis of chinese building specifiers -- : their knowledge of wood products & contributions… Ding, Yingxiang (Mineral) 2005

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A N E X P L O R A T O R Y ANALYSIS OF CHINESE BUILDING SPECIFIERS - T H E I R K N O W L E D G E OF WOOD PRODUCTS & CONTRIBUTIONS TO M A T E R I A L SPECIFICATION by YINGXIANG (MINERAL) DING A THESIS SUBMITTED IN PARTIAL F U L F I L M E N T OF T H E REQUIREMENTS FOR T H E D E G R E E OF M A S T E R OF SCIENCE in T H E F A C U L T Y OF G R A D U A T E STUDIES (Forestry) T H E UNIVERSITY OF BRITISH C O L U M B I A April 2005 © Yingxiang (Mineral) Ding, 2005 ABSTRACT China's construction market has been booming in last decades due to economic growth and the privatization of the housing sector. This construction market is currently dominated by structural materials of concrete, steel, and masonry with little wood use. Wood frame construction is new to the Chinese market and therefore, the acceptance and knowledge of architects, structural engineers, and developers about wood products are important to the successful introduction of wood products in China. This study investigated Chinese specifiers' current knowledge about structural and non-structural wood materials, their perceptions about wood, contributions on material specification, and information sources about new building products and technologies. A mail survey of 800 Chinese specifiers was completed in the major urban areas of Shanghai City, Jiangsu and Guangdong Provinces and 373 responses were received. Results indicated that the major building types in these regions were concrete residential buildings with a height of 4 to 20 stories and 5,000 to 20,000 m 2 in building space. The market share of wood houses was very small. Engineers had the greatest contribution on structural material specification (42.3%) followed by architects (23.6%). For non-structural material specification, architects had the greatest contribution (43.3%) followed by developers (23.8%) and builders (20.3%). Engineers indicated that they had little knowledge about structural wood products. Architects had slightly more knowledge about non-structural wood materials compared to engineers' knowledge about structural wood materials. Specifiers were most concerned about burning and rotting of wood materials followed by costs and lack of acceptance both by developers and the marketplace. Technical reading and corporate promotional materials were the most important information sources and were used by over 50% of respondents. Other channels, such as manuals, codes and standards, association promotional materials, computerized information, and physical examples, were also used by a substantial number of specifiers. Due to the co-operator's lack of market research experience and the reluctance of professionals to share their knowledge, substantial challenges had were faced in this marketing survey and recommendations were given to facilitate future studies and to improve data quality. i i TABLE OF CONTENTS A B S T R A C T i i T A B L E O F C O N T E N T S i i i L IST O F T A B L E S v i LIST O F F I G U R E S v i i A C K N O W L E D G E M E N T S v i i i 1. I N T R O D U C T I O N 1 2. B A C K G R O U N D 4 2.1. A R C H I T E C T U R A L T R A D I T I O N S A N D T R E N D S OF C H I N A 4 2.2. C H I N A ' S C O N S T R U C T I O N M A R K E T 7 2.2.1. B R I E F H I S T O R Y OF R E S I D E N T I A L C O N S T R U C T I O N M A R K E T 7 2.2.2. N A T I O N A L H O U S I N G M A R K E T 9 2.2.3. B A C K G R O U N D OF I N V E S T I G A T E D R E G I O N S 13 2.2.3.1. Shanghai 13 2.2.3.2. Jiangsu Province 17 2.2.3.3. Guangdong 19 2.2.3.4. Overview of A l l Three Study Regions 21 2.3. W O O D C O N S U M P T I O N A N D A P P L I C A T I O N S I N C H I N A 23 2.4. C H I N E S E B U I L D I N G SPECIFIERS 24 2.4.1. Q U A L I F I C A T I O N S Y S T E M F O R A R C H I T E C T S 24 2.4.2. Q U A L I F I C A T I O N S Y S T E M F O R S T R U C T U R A L E N G I N E E R S 25 2.4.3. Q U A L I F I C A T I O N S Y S T E M F O R B U I L D I N G D E S I G N C O M P A N I E S 26 2.4.4. S T A T E - O W N E D A N D P R I V A T E D E S I G N C O M P A N I E S 26 3. P R O B L E M S T A T E M E N T A N D O B J E C T I V E S 29 4. M E T H O D O L O G Y 31 4.1. P O P U L A T I O N A N D S A M P L I N G F R A M E 32 4.2. S A M P L I N G M E T H O D S 32 4.3. D E S I G N OF T H E I N S T R U M E N T 33 4.3.1. I N T R O D U C T I O N T O T H E Q U E S T I O N N A I R E S 33 4.3.2. Q U E S T I O N N A I R E S 34 4.3.3. C O N T E N T S O F Q U E S T I O N N A I R E S 34 4.3.4. B E H A V I O U R R E S E A R C H E T H I C S . . : 35 4.4. D A T A A N A L Y S I S 35 5. I M P L E M E N T A T I O N 36 6. R E S U L T S 39 6.1. S U R V E Y R E S P O N S E 39 6.1.1. M A I L S U R V E Y 39 6.1.2. S E M I N A R Q U E S T I O N S '. 41 6.2. D E M O G R A P H I C I N F O R M A T I O N 42 6.2.1. G E N D E R 42 6.2.2. A G E 42 6.2.3. E D U C A T I O N 43 6.2.4. D E S I G N E R Q U A L I F I C A T I O N S 44 6.2.5. C O M P A N Y Q U A L I F I C A T I O N S 45 6.2.6. E X P E R I E N C E A N D C O M P A N Y SIZE 46 6.3. C H A R A C T E R I Z A T I O N OF P R A C T I C E 47 6.3.1. E N D U S E OF B U I L D I N G S 47 i i i 6.3.2. B U I L D I N G H E I G H T 48 6.3.3. A R E A S OF B U I L D I N G S 50 6.3.4. S T R U C T U R A L M A T E R I A L S 51 6.4. C O N T R I B U T I O N S O N B U I L D I N G M A T E R I A L S P E C I F I C A T I O N 52 6.4.1. C O N T R I B U T I O N S O N S T R U C T U R A L M A T E R I A L SPECIFICATION. . . . . . . . 53 6.4.2. C O N T R I B U T I O N S O N N O N - S T R U C T U R A L M A T E R I A L S P E C I F I C A T I O N 55 6.5. K N O W L E D G E A N D P E R C E P T I O N S OF W O O D M A T E R I A L 56 6.5.1. K N O W L E D G E OF S T R U C T U R A L W O O D M A T E R I A L S 57 6.5.2. K N O W L E D G E OF N O N - S T R U C T U R A L W O O D M A T E R I A L S 57 6.5.3. P E R C E P T I O N S OF A V O I D A N C E O F W O O D M A T E R I A L U S E I N C H I N A 58 6.6. I M P O R T A N T F A C T O R S F O R T R Y I N G N E W M A T E R I A L S 59 6.7. I M F O R M A T I O N S O U R C E S 60 6.8. I M P A C T S OF G O V E R N M E N T P O L I C Y A N D I N T E R I O R E N V I R O N M E N T 62 6.8.1. I N F L U E N C E OF G O V E R N M E N T P O L I C Y 62 6.8.2. I M P O R T A N C E OF I N T E R I O R E N V I R O N M E N T Q U A L I T Y 62 6.9. C H A L L E N G E S F O R D O I N G M A R K E T I N G S U R V E Y I N C H I N A 63 7. D I S C U S S I O N A N D C O N C L U S I O N 66 7.1. C O N T R I B U T I O N S O N M A T E R I A L S P E C I F I C A T I O N (Objective 2) 66 7.1.1. S T R U C T U R A L M A T E R I A L S P E C I F I C A T I O N 66 7.1.2. N O N - S T R U C T U R A L M A T E R I A L S P E C I F I C A T I O N 66 7.2. K N O W L E D G E A N D P E R C E P T I O N S OF W O O D M A T E R I A L S (Objective 1) 68 7.2.1. K N O W L E D G E OF S T R U C T U R A L W O O D M A T E R I A L S 68 7.2.2. K N O W L E D G E O F N O N - S T R U C T U R A L W O O D M A T E R I A L S 68 7.2.3. P E R C E P T I O N S A B O U T W O O D 69 7.3. I N F O R M A T I O N S O U R C E S (Objective 3) 71 7.4. R E C O M M E N D A T I O N S F O R D O I N G M A R K E T I N G S U R V E Y I N C H I N A (Objective 4) 71 7.5. R E C O M M E N D A T I O N S F O R F U T U R E R E S E A R C H 73 8. S U M M A R Y 75 9. N O T E S 77 9.1. N O T E 1, M E A S U R E I N G U N I T S F O R H O U S I N G S P A C E 77 9.2. N O T E 2, C H I N E S E STATISTICS 78 9.3. N O T E 3, E X C H A N G E R A T E OF R M B 78 9.4. N O T E 4, S P E C I A L E C O N O M I C Z O N E 79 9.5. N O T E 5, H U K O U - H O U S E H O L D R E G I S T R A T I O N I N C H I N A 79 9.6. N O T E 6, F L O A T I N G P O P U L A T I O N S 80 9.7. N O T E 7, E D U C A T I O N G A P D U E T O T H E G R E A T C U L T U R A L R E V O L U T I O N S 1 10. R E F E R E N C E S 82 11. A P P E N D I C E S 91 11.1. A P P E N D I X I : Q U E S T I O N N A I R E F O R A R C H I T E C T S 92 11.2. A P P E N D I X II: Q U E S T I O N N A I R E F O R S T R U C T U R A L E N G I N E E R S 96 11.3. A P P E N D I X III: Q U E S T I O N N A I R E F O R D E V E L O P E R S 100 11.4. A P P E N D I X IV Q U E S T I O N N A I R E F O R S H A N G H A I & B E I J I N G S E M I N A R S 103 11.5. A P P E N D I X V M E T H O D O L O G Y (FOR O R I G I N A L T E L E P H O N E S U R V E Y ) 105 iv 11.5.2. S A M P L I N G M E T H O D S 105 11.5.3. D E S I G N O F T H E I N S T R U M E N T 106 11.5.4. D A T A A N A L Y S I S 109 v LIST OF TABLES Table 1 Liv ing condition and annual national residential building area 10 Table 2 Investment in residential construction and sales in Chinese estate market 11 Table 3 Urban residential construction by estate companies (million m ) 12 Table 4 National residential houses sales and prices 12 Table 5 Population and urbanization rates of study regions in 2003 14 Table 6 G D P and per capita G D P of study regions in 2003 . 15 Table 7 Resident's incomes of study regions in 2003 15 Table 8 Foreign trade of study regions in 2003 16 Table 9 Foreign direct investment of study regions in 2003 16 Table 10 Shanghai residential construction (million m 2 ) and investment 16 Table 11 Shanghai residential market sales : 17 Table 12 Jiangsu Province housing construction and investment by estate companies 18 Table 13 Jiangsu residential market sales 19 Table 14 Guangdong Province residential construction (million m 2 ) and investment 20 Table 15 Guangdong Province residential market sales 21 Table 16 Regional distribution of respondents 40 Table 17 Responding Rates of Questions 41 Table 18 Regional distribution of respondents at seminars 41 Table 19 Types of building end uses by specifier group and regional breakdown (%) 47 Table 20 Building heights by specifier group and regional breakdown 49 Table 21 Building heights by specifier age group 50 Table 22 Types of structural materials of buildings by respondent age and region 52 Table 23 Contributions on structural material specification by profession 53 Table 24 Contributions on structural material specification, by region 54 Table 25 Contributions to structural material specification by age (%) 54 Table 26 Contributions on non-structural material specification, by profession 55 Table 27 Contributions on non-structural material specification, by region (%) 56 Table 28 Reasons of avoidance of more wood use in China by specifier group 59 Table 29 Information sources of new materials/technologies 61 Table 30 Influence of government policy on material specification 62 Table 31 Importance of interior environmental quality in material specification 63 v i LIST OF FIGURES Figure 1 Structure of Chinese traditional house 4 •Figure 2 Map of China 5 Figure 3 Vernacular wood house in China 7 Figure 4 Map of administrative regions of China 13 Figure 5 Gender of the respondents 42 Figure 6 Age distributions of Chinese building designers 43 Figure 7 Educational backgrounds of Chinese building designers 44 Figure 8 Qualification of Responding Architects and Engineers 44 Figure 9 Company Qualifications 45 Figure 10 Work experience of Chinese specifiers 46 Figure 11 Workloads on different end use buildings of Chinese specifiers 47 Figure 12 Workloads based on building height by specifier group 48 Figure 13 Chinese specifiers' workloads on buildings at different areas (m 2) 50 Figure 14 Workloads of Chinese engineers and developers by structural material 51 Figure 15 Contributions on structural material specification 53 Figure 16 Contributions on non-structural material specification 55 Figure 17 Knowledge of Chinese engineers about wood structural materials 57 Figure 18 Knowledge of Chinese architects about wood non-structural materials 58 Figure 19 Reasons of avoidance of more wood use of Chinese building specifiers 58 Figure 20 Important factors for trying new materials 60 Figure 21 Information sources of Chinese building specifiers about new building materials 61 ACKNOWLEDGEMENTS I knew I would change my life and career when I decided to move to Canada. But which way to go? Maybe careers that would make my background useful, as a forester from China. I deeply believed that education is the best and fastest way for me to restart my career in a new country. I finally found the MSc. program of wood products marketing at UBC. At that time, Canada and US was in dispute on softwood lumber trade and Canada started to pay attention to China's market. I am so grateful to Prof. David Cohen, not only for his accepting me as his MSc. student and bringing me into a career I am so much interested in, but also for his patience, kindness, and encouragement which I can feel every time I am with him. I learned so much from him academically, socially, and culturally, that I will get lifetime benefits from it. Drs. Christopher Gaston and Robert Kozak, two committee members of mine, gave me their invaluable guidance and comments during my study and thesis work, such as survey design, field investigation, and thesis review. Their helps and contributions will be appreciated forever. I want to express my thanks to Antje Wahl at Forintek for her help in field investigation; Prof. He Minjuan at Tongji University in Shanghai for her assistance in data collection; Pavlos Alexiadis, Wellington Spetic, Natalia Vidal, and Jennifer Rice in Market Lab for their help and friendship. Their helps made the completion of this thesis possible. My wife and daughter have gone through all the happiness and difficulties with me. My wife's support and her keeping questioning our decision of immigration have been the impetus for me to continue; the joys from my daughter's loveliness and the bothers from her naughtiness make my life more meaningful. My old parents, my brothers and sister, their love and understanding make me feel always be backed up. I love them. Now, I can say it is a great change, language, culture, career, and everything. I can and will continue to feel the change truthfully in person and I like it because it widens my view of the world. v i i i 1. INTRODUCTION Architects, structural engineers, and developers are important groups of professionals who have substantial influence on building materials specification. Not only are they directly involved in the planning, design, and construction of buildings, but they also play an important role in the adoption of new building technologies and materials. As opinion leaders (due to their professional positions), they have a significant impact on consumers' decisions. The Chinese construction market has grown substantially since the early 1980s along with the development of its economy (Anonymous, 1997, 1998, 1999; Freese, 2001). Construction, home decoration, and furniture manufacturing continue to consume large quantities of wood products (Zhu, 2004). With the implementation of the Natural Forest Protection Program (NFPP) in 1998 and a reduction of tariffs on wood products, China has become the world's largest log importer since 2001 (Sun, Katsigris, and White, 2004). Until the 1980s, in rural regions, most Chinese residential houses were built in the traditional style using wooden frames with brick construction (Su, 1964; Anonymous, 2001a; Ding, 2003a). However, concrete and steel structures have evolved to become the most widely used forms of buildings (Ding, 2003a). Most contemporary Chinese consider that wood is inferior to steel and concrete in terms of fire, decay, strength and durability (Wu, 2002; Good, 2002). This impression comes from the lack of experience with modern wood frame houses, such as those in Canada, and also from a negative association with wood houses in China's remote and less developed countryside where houses are of poor quality due to inadequate design and construction (Ding, 2003a; Gaston and Mapleden, 2003). In China, there is little urban tradition of modern wood housing so specifier's acceptance and knowledge of wood building materials and construction are prerequisites to increased wood applications. However, a comprehensive literature review showed that few studies had been published regarding Chinese specifiers. There is little information about their work characteristics, their respective roles and contributions on material specification, information sources, and knowledge and opinions about wood materials and houses. 1 Canada has only a small share in China's overall wood products imports due to price considerations and the suitability of its products (China Customs Statistics, 2004). To further increase China's wood consumption and expand Canada's presence in this market, it is important to introduce modern wood technologies and products to the Chinese market (Office of the Premier, 2003a and 2003b; Gaston and Mapleden, 2003; ERC, 2003). Exploratory research about Chinese specifiers is necessary to provide essential information for future marketing strategies. The research is exploratory in nature due to the immaturity of the market economy and the lack of experience of the Chinese with market research techniques. After consultation with industry and academic experts, the objectives for this project were identified: 1. To investigate specifiers' current knowledge about both structural and non-structural products used in residential and non-residential construction in China; 2. To determine how material and product decisions are made and the relative contributions of architects, engineers, and developers in the specification process; 3. To determine the best methods to transfer knowledge about wood materials, products, and systems to each specifier group, and 4. To better understand the possibilities and problems associated in industrial market research in China--a new market economy in a unique Asian culture with little history of market research. In this study, Shanghai City (municipality), and the major urban areas of Jiangsu and Guangdong Provinces were selected for investigation. These areas are located in the southern part of the east coastal belt of China. They are historically the more advanced and industrialized regions in China. Since the people in these regions have the highest disposable incomes in China and have the most contacts with foreign cultures and fashions, they would be more likely to accept wood frame construction, hybrid construction, and new structural and non-structural wood applications (Wu, 2002). The thesis is structured as follows: Section 1, the current section, is a brief introduction to this project and thesis. Section 2 provides a background, .through a literature review, on the Chinese residential construction market and Chinese 2 specifiers. It includes a brief history, the status quo of the national market, as well as descriptions of the regions where data was collected: Shanghai, Jiangsu and Guangdong. This is followed by an examination of China's architectural traditions and trends, wood consumption and the qualification system for architects, engineers and design companies. Section 3 describes the limitations encountered during this exploratory work and restates the objectives of this study. The methodology of the study is described in Section 4. Due to the changes of sampling, questionnaire, and survey methods, a separated section, Section 5, is set up to describe the actual procedures of implementation of the survey. Survey results are reported in Section 6 and Section 7 provides a detailed discussion of the results as well as recommendations. Section 8 summarizes the thesis with major findings followed by references, end notes and appendices. 3 2. BACKGROUND This section provides a brief introduction to the issues related to the topics of this project. The first subsection is about China's architectural traditions and trends. The second discusses China's residential construction market, both nationally as well as in the regions targeted for this research. The review of China's wood consumption and wood applications is given in subsection 3. Subsection 4 presents a summary of the qualification systems for Chinese building specifiers and design firms 2.1. ARCHITECTURAL TRADITIONS AND TRENDS OF CHINA Traditional Chinese rural houses, until the 1980s, were made of bricks with wood post-beam frames and purlins (Liu, 1989). The walls and roofs were made of baked earth bricks and tiles. There was substantial amount of timbers used for structural components such as posts, beams, purlins, and rafters (Figure 1). Wood application was restricted by accessibility to forest resources. In wood rich Southeast China, wood was used for interior partitions, sheathing, large decorative doors, windows, and many other applications. In North and West China, it was only used for frames and a few parts such as doors and windows (Ding, 2003a). (From: Liu, 1989, p30) Figure 1 Structure of Chinese traditional house 4 Foreign architectural styles, modern construction technologies, and building materials entered China with increased trade and the missionary presence after the Opium War from 1840 to 1842. Western influences started from the Guangdong Province, and extended along the coast to the north and along the Yangtze River (Chang Jiang in Figure 2) to the interior areas (Rowe and Kuan, 2002). (From: http: //www.lib.utexas.edu) Figure 2 Map of China Foreign architects started to practice in China in 1894 and their presence started to modify the Chinese conception of buildings (Su, 1964; Warner, 1994). Chinese students, who studied in architecture and civil engineering in western countries, started coming back in 1921 and they contributed greatly to the spread of modern architectural and engineering technologies in (Su, 1964). The 1930s was the most colourful time in Chinese architectural history, when diverse styles of buildings appeared in many areas in China as architects were trying to blend Chinese traditions with western styles and modern technologies to create a new modern Chinese style (Rowe and Kuan, 2002). Afterwards, wars and politics made these explorations impossible. In terms of residential buildings, the "lilong" dwelling, which was developed before 1940 in the Shanghai area, was a typical mixed model of western influences and Chinese vernacular style. Western style single houses, townhouses, as well as multi-story residential apartments were adopted (Rowe and Kuan, 2002). Since then, multi-story residential 5 apartments have evolved to be the dominant building type in China's urban regions (Treister, 1987; Ding, 2003a). With the founding of the People's Republic of China in 1949, China adopted a revolutionary social ideology and repudiated foreign non-communist styles (Anonymous, 200If). Russian influence dominated Chinese architectural designs since the 1950s until the 1970s (Rowe and Kuan, 2002). Soviet style residential buildings emphasized construction speed, low cost, and labour savings to fit with the so-called modern and socialist life style (Treister, 1987). Typically, these concrete residential buildings were three to four stories high, used concrete for frames and bricks for exterior walls, and provided access by stairs and internal corridors (Rowe and Kuan, 2002). This style greatly affected Chinese residential design and is still being applied in many school dormitory buildings. Once China started its economic reforms in 1978, simple, inexpensive, and lifeless concrete walk-up apartments (usually less than six stories) were constructed to meet the exploding housing demand. This dynamic demand was driven by population growth, pent up demand from decades of unfulfilled housing needs, rapid urbanization, and a growing consumer desire for housing improvements (Ding, 2003a). Limited resources ensured that the focus was on increasing the quantity of housing units rather than on the quality of architecture design, community environment, or quality of construction (Treister, 1987). One positive design change was that, during this period, kitchens and baths were included in each unit rather than being shared facilities. These dull and lifeless grey buildings spread quickly in many cities until the early 1990s. Since then, apartment buildings in China have become increasingly functional and aesthetically pleasing. With continuous population growth and increasing urbanization, low rise (7-12 stories) and high rise (> 12 stories) residential buildings have become the principal building forms for housing in metropolitan areas such as Shanghai and Beijing. At the same time, there was increasing market differentiation in housing. Single houses and town houses were developed in luxury districts and wood frame houses were introduced in China (Good, 2002). However, China has paid high environmental prices for its fast development in the last twenty years (Anonymous, 2004a; Oliver, 2003). Chinese institutions, international organizations, and universities 6 have initiated a number of studies on sustainable housing in China's urban and rural areas (Anonymous, 2000a). These organizations tried to improve house energy efficiency (Long, 2002), to combine Chinese vernacular architectural traditions with modern technologies (Anonymous, 2001), and to promote the use of renewable building materials (Gan, et al., 2002). Today, wood houses are not the mainstream of housing structures in urban areas. Vernacular wood houses appear only in remote rural areas near timber producing regions. They have similar post-beam structures as traditional brick houses, but most components are made from wood, except for the baked earth roof tiles (Figure 3). Vernacular wood houses are usually built by house owners or local masons. They lack proper design or construction and are generally not considered high quality houses (Ding, 2003a). (from: http://www.gotohn.com) Figure 3 Vernacular wood house in China 2.2. CHINA'S CONSTRUCTION MARKET 2.2.1. BRIEF HISTORY OF RESIDENTIAL CONSTRUCTION MARKET China's private construction market is young compared with most of the countries in the world. Before initiation of economic reforms and the "opening door" policies in 1978, the construction and housing sector were controlled by governments, and investment was made according to government plans (Li, 7 1998). There was little private housing and, thus, no open housing market. Investment in housing was relatively small due to limited budgets and the investment that did occur was directed to agricultural or industrial sectors. Low levels of housing construction, poor maintenance of existing houses, and a high rate of population growth created a very large pent up housing demand (Ding, 2003a). Housing development was stimulated by increased government investments in residential construction, usually by state owned enterprises (SOEs). Since the 1980s, SOEs were allowed to share a certain proportion of profits with the state to improve the living standards of their employees. Governments gradually reduced their share of housing investment and shifted the responsibility of providing housing to the SOEs. It turned out to be a high burden on SOEs. At the same time, housing built by private real estate investors was increasing and eventually become the major source of new residential construction (NBSC, 2003). The Chinese real estate market first started in the early 1980s. A few privileged state owned and overseas estate companies were set up in some major cities to construct and sell houses to overseas investors (mostly from Hong Kong) and to meet sparse domestic demand (SASS, 2001). Market development was constrained by the state, land ownership system that led to a lack of land available for market development due to the prevailing socialist ideology (SASS, 2001). Market development proceeded rapidly after 1986, when the concept of "land use right (LUR)" was accepted. It was further stimulated when the real estate market was opened to more investors in the late 1980s (MOCC, 1989; 1993a), although the total market remained small until early 1990s. Development accelerated once again after the three-year economic pause following the Tiananmen Square event in 1989. From 1992 onward, the real estate market was further deregulated allowing freer transfer of "land use rights" and the removal of limitations on the establishment of private corporations (MOCC, 1993a and 1993b). In addition, the expectation of great housing demand attracted investors and speculators. Consequently, many real estate developing companies were set up in early 1990s (SASS, 2001). The real estate bubble burst in the mid 1990s due to excess supply. A variety of factors contributed to this, including an over estimation of housing demand, escalating prices, and quality problems due to bad 8 design, incompetent management, and below standard construction materials (EIU, 2001). The Asian Financial Crisis in 1997 also contributed to the real estate depression causing South Asian investors to cancel their housing investments in China. Sales of office buildings and housing to overseas residents in China dropped significantly (EIU, 2001). In the second half of the 1990s, a series of policies and measures were implemented to spur a recovery of the real estate market, including sales tax exemption, income tax deduction, lower down payment requirements, and longer housing loans (SASS, 2001). The most important and revolutionary housing reform policy was implemented in 1998. The Chinese central government decided to abolish the long existing beneficial housing allocation system and commoditize the housing distribution system (SCC, 1998). As of this date, all government branches, institutions, and SOEs can not allocate new houses to their employees but must but sell it to them. Existing houses had to be sold to the people who lived in them except for those houses that were not suitable for selling (e.g. older houses which should have been demolished or rebuilt). The houses bought from SOEs were soon allowed to be traded in a free market to stimulate the depressed real estate market (SCC, 1999). After two years of housing reforms, individual buyers had contributed to more than 85% of national housing sales volumes and a real estate market was taking shape (Anonymous, 2000b). The Chinese government gradually realized that the housing market was an important sector to drive domestic demand and national GDP. As a low-tech and labour intensive industry, the construction industry creates a large number of jobs that the government requires to absorb excessive urban and rural labourers (EIU, 2001). 2.2.2. N A T I O N A L H O U S I N G M A R K E T Prior to 1978, annual housing investment and construction volume were very low. Housing space was only about 6.7 m 2 per capita and.a strong demand for housing had been pent up (see Note 1 for additional information about the units used to measure housing space in China) (NBSC, 2003). Since then, annual housing construction has increased greatly to meet growing demand. Total national, urban, residential construction was about 38 million m 2 in 1978 and rose to 598 million m 2 in 2002 (Table 1), an increase of a factor of 15 in only 25 years (NBSC, 2003; see Note 2 about China's statistics). Except for fluctuations in a few years, the growth was steady and robust. As a result of the prolonged construction boom, the 9 living conditions of urban Chinese have improved significantly. Per capita living space more than tripled to reach 20.3 m 2 in 2000, and 22.8 m 2 in 2002 (NBSC, 2003). One projection indicated that China would have to maintain annual construction of more than 500 million m 2 for 50 years i f it wants to improve urban housing conditions and accommodate the new urban populations that will accompany industrialization and urbanization (Bao, 2001). Regardless of the accuracy of this projection, it is clear that China will require a very large area of new residential construction annually for a long time to come. Residential construction will provide good opportunities for construction related industries for the foreseeable future. Table 1 Living condition and annual national residential.building area Year Building space per capita, m 2 Living space per capita, m 2 Usable capita, space per m 2 Total urban residential constructed space, million m 2 1978 6.7 3.5 4.9 38 1980 7.2 3.8 5.2 92 1985 10.0 5.3 7.2 188 1990 13.7 7.2 9.9 173 1995 16.3 8.6 11.8 375 2000 20.3 10.7 14.9 549 2002 22.8 12.0 16.5 598 Source: China Statistical Yearbook 2003 As previously stated, prior to the 1980s, most urban Chinese obtained housing from their workplaces and other non-market channels. Investment in the real estate market before 1992 was rather small and totalled only 15 billion R M B in 1987, rising to 33.6 billion R M B in 1991 (Table 2) (see Note 3 about exchange rates of RMB) . There was a boom of China's estate market in the early 1990s and annual investment jumped nine fold to 315.2 billion R M B in 1995. A depression followed due to over supply, high prices, and poor construction quality (EIU, 2001). The market started to recover in 1998, driven by housing reforms and other policy incentives. Since 2000, investment has increased by over 20% annually and by 2003 was over one trillion R M B which was 2.7 times of that in 1998 (362.3 billion). Analysts warned that the real estate market may be overheating and the Chinese government is currently trying to slow it down 10 (Yuan, 2004). Overall, China's estate market has grown rapidly in the 16 years from 1987 to 2003, with investment in real estate increasing by a factor of 65 during that time span. Table 2 Investment in residential construction and sales in Chinese estate market Year Total estate investment, billion R M B Growth (%) over previous year 1987 15.0 48.4 1991 33.6 32.8 1992 73.1 118 1993 193.8 165 1994 255.4 31.8 1995 315.2 23.4 1996 324.7 3.0 1997 318.4 -1.93 1998 362.3 13.8 1999 410.3 13.5 2000 498.4 21.5 2001 634.4 27.3 2002 779.0 22.8 2003 1,010.6 29.7 Source: China Statistical Yearbooks; Conmmunique of China's Economic and Social Development, 2003 and 2004; M O C C , 2004 In recent years, the total area of residential construction built by private real estate companies has risen dramatically (Table 3). New housing starts in 1997 were 110 million m 2 , but by 2002, had more than tripled to 347.2 million Total finished area by real estate companies increased from 158.2 million m 2 in 1997 to 349.8 million m 2 in 2002 (Table 3). This represented 58.5% of total urban residential construction space and signified that real estate developers had become the dominant housing suppliers, taking over from the state. Average house prices increased greatly in the early 1990s (Table 4). The price per square metre increased from 756 R M B to 1,609 from 1991 to 1996. Since the housing bubble burst in 1996, price increases have been relatively smooth, while housing sales have grown substantially. However, housing prices are pretty high compared to average family disposable incomes. According to the data from the China Statistical Yearbook 2003, the price of an average-sized apartment unit of 67.4 m 2 is 8.4 times the annual disposable 11 income of a three-member household with two income earners (NBSC, 2003). However, since most houses sold are empty concrete shells and buyers have to finish it themselves; total housing expenses would be much more than initial housing price. Table 3 Urban residential construction by estate companies (million m2) Year New start area, million m 2 Growth (%) over previous year Finished space, million m 2 Growth (%) over previous year 1997 110.0 - 158.2 -1998 166.4 51.3 175.7 11.0 1999 188.0 13.0 214.1 21.9 2000 244.0 29.8 251.0 17.3 2001 305.3 25.1 298.7 19.0 2002 347.2 13.7 349.8 17.1 Source: China Statistical Yearbooks Table 4 National residential houses sales and prices Year Sold space, million m 2 Growth (%) over previous year Average price, R M B / m 2 Growth (%) over previous year Individual purchases in total % 1991 . 27.5 - 756 - 33.8 1995 67.9 10.9 1509 '26.4 49.3 1998 108.3 37.7 1854 3.6 72.0 1999 130.0 20.0 1857 0.2 80.1 2000 165.7 27.5 1948 4.9 87.3 2001 199.4 20.3 • 2017 3.5 91.5 2002 237.0 18.9 2092 3.7 96.2 Source: China Statistical Yearbooks Along with housing reforms and the development of a private housing estate market, the buyer composition has also changed. Before the early 1990s, the majority of buyers in the real estate market were institutional/corporate buyers. They bought houses from the market and then allocated them to their employees. In 1991, only 33.8% of the sales were purchased by individual buyers. In 1996, more than half of the housing space was sold to individual buyers and, by 2002, this percentage had increased to 96.2% (Table 4). The real estate market is now supplied predominantly by private developers for sale to individual people. 12 2.2.3. BACKGROUND OF INVESTIGATED REGIONS China is a vast country and economic development is not geographically balanced. There are three major economic zones in China: the Pear River Delta, the Yangtze River Delta, and the Beijing area. These regions are the most dynamic and advanced areas in China and are the most dynamic housing markets (Yu, 2003). This survey was carried out in Shanghai Municipality, Jiangsu Province and Guangdong Province (Figure 4). The first two regions are in Yangtze River Delta and the later one is in the Pearl River Delta. (From: http: //www.tdctrade.com) Figure 4 Map of administrative regions of China 2.2.3.1. Shanghai Historically, Shanghai has been the largest city and economic center of China. However, from 1949 to the 1980s, it served as a manufacturing base to support the national economy and was not listed as an open area (Wikipedia, 2004) (see Note 4 about Special Economic Zone). One result was that it received little 13 investment for infrastructure and technology innovation. However, since the 1990s, Shanghai has been regaining its position in China's economy after the late Chinese leader Deng Xiaoping called for a fast developing Shanghai, and required it to play the "dragon head" role in national economic development. Shanghai is now striving to turn itself into a global economic, financial, trade, and shipping center (SMG, 2003). Shanghai is located in the middle of China's coastline, at the entry point of the Yangtze River (Figure 2 and 4). This central geographic location positions it as the center for domestic and international trade in China. The city has a total area of 6,341 km 2, representing 0.06% of China's total territory. It is now divided into 18 administrative districts and one county. Nine of the districts are central urban districts with a total area of 289 km 2. The others are rural districts, but have smaller urban areas within them. In 1990, Pudong District, a 523 km 2 suburb rural district, was designated as a Special Economic Zone and was expanded as a new urban district. This expansion was critical for Shanghai since it provided valuable space for the city to expand, given it extremely over-crowded urban area (SMG, 2003). The population with household registration of Shanghai was 13.4 million (considering "Hukou"- the household registration, see Note 5) by the end of 2003. There are also more than 3.5 million people in the "floating population" (see Note 6) according to the census in 2000. Shanghai has the highest urbanization rate in China and in 2002, 76.4% of its registered population lived in urban areas (Table 5). If the floating population were taken into account, this percentage would be even higher. Although Shanghai is the first region in China to report a negative birth rate (since 1993), the population is still growing due to the inflow of migrants. Table 5 Population and urbanization rates of study regions in 2003 Region Land area, 1,000 km 2 Land area, % in China Population, million Population, % in China Urban population, million Rural population, million Urban population % Shanghai 6.34 0.06 13.42 1.0 10.19 3.15 76.4 Jiangsu 102.6 1.06 74.06 5.7 34.64 39.42 46.8 Guangdong 177.6 1.87 79.54 6.2 27.67 51.87 35.2 National 9,600 100.0 1,292.27 100.0 523.76 768.51 40.5 Sources: China Statistical Yearbooks; Shanghai Statistical Yearbooks; Statistical Yearbooks of Jiangsu Province; Statistical Yearbooks of Guangdong Province 14 Table 6 GDP and per capita GDP of study regions in 2003 Region GDP, billion R M B GDP, billion $US GDP GDP per rowth G D P % ca ita ^ G D P p e r C a p i t a t 0 ^ r ?n/ in China n^ PJLf' capita $US national rate% R M B ^ average Shanghai 625.08 75.52 11.8 5.4 46,695.00 5,641.33 5.17 Jiangsu 1,245.18 150.43 13.5 10.7 16,796.00 2,029.16 1.86 Guangdong 13,44.99 162.49 13.6 11.5 16,909.18 2,042.84 1.87 National 11,669.40 1,409.81 9.1 100.0 9,030.16 1,090.95 1.00 Sources: China Statistical Yearbooks; Shanghai Statistical Yearbooks; Statistical Yearbooks of Jiangsu Province; Statistical Yearbooks of Guangdong Province The GDP of Shanghai in 2003 was 625 billion R M B (75.5 billion $US), representing 5.4% of the total national GDP (Table 6). In 2003, per capita GDP was 46,695 R M B (5,641 $US), about 5.17 times the national average and was the highest of all Chinese regions. The per capita disposable income of urban Shanghai residents was 1,797 $US (Table 7). The urban income was 1.76 times of the national average. Shanghai is one of the most important foreign trading regions in China. In 2003, its overall foreign trade was 112.4 billion $US, about 13.2% of the national total (Table 8). The foreign trade value was about 1.5 times its GDP, indicating that foreign trade was a very important sector in its economy. Table 7 Resident's incomes of study regions in 2003 Region Urban disposable income $US Urban income to national average, % Rural net income, $US Rural income to national average, % Urban to rural income ratio Shanghai 1,797 175.6 804 253.9 2.23 Jiangsu 1,1189 109.3 512 161.7 2.18 Guangdong 1,496 146.1 490 154.6 3.05 National 1,024 100.0 317 100.0 3.23 Sources: China Statistical Yearbooks; Shanghai Statistical Yearbooks; Statistical Yearbooks of Jiangsu Province; Statistical Yearbooks of Guangdong Province Shanghai's location, well-developed infrastructure, and well-educated workers have attracted foreign investment. In 2003, foreign direct investment (FDI) was 5.85 billion $US representing 10.9% of the national FDI (Table 9). The per capita FDI was even higher than in Guangdong and Jiangsu Provinces. Shanghai was once famous for very tight housing availability. In 1979, the average living space was as low as 4.3 m 2 (8.5 m 2 floor space) per capita. Housing conditions improved slowly in the 1980s and the 15 improvement has accelerated rapidly since 1992 (Table 10). Per capita living area rose to 6.9 m 2 (13.7 m 2 floor space) in 1992 and 13.8 m 2 (27.5 m 2 floor space)in 2003, which put it on a par with the national average of 12.0 m 2 (in 2002). In 2002, residential construction was 18.8 million m 2 . Investment in the residential construction sector was 7.06 billion $US in 2003, representing 10.8% of its GDP. At the same time, real estate market sales have been growing since 2000 (Table 11). Table 8 Foreign trade of study regions in 2003 Region Total, billion $US Foreign trade to GDP Foreign trade, % in China Export, billion $US Export, % i n China Import, billion $US Import, % i n China Shanghai 112.40 1.49 13.2 48.48 11.1 63.92 15.5 Jiangsu 113.67 0.76 13.4 59.14 13.5 54.53 13.2 Guangdong 283.65 1.75 33.3 152.94 34.9 130.70 31.7 National 851.20 0.60 100.0 438.40 100.0 412.80 100.0 Sources: China Statistical Yearbooks; Shanghai Statistical Yearbooks; Statistical Yearbooks of Jiangsu Province; Statistical Yearbooks of Guangdong Province Table 9 Foreign direct investment of study regions in 2003 Region FDI, Billion $US % of national FDI Shanghai 5.85 10.9 Jiangsu 15.80 29.5 Guangdong 15.58 29.1 National 53.51 100.0 Sources: China Statistical Yearbooks; Shanghai Statistical Yearbooks; Statistical Yearbooks of Jiangsu Province; Statistical Yearbooks of Guangdong Province Table 10 Shanghai residential construction (million m2) and investment Year Total constructed, million m 2 Residential investment, billion $US % in GDP 2000 17.2 5.36 9.8 2001 17.4 5.64 9.4 2002 18.8 7.06 10.8 Sources: Statistical Yearbooks of Shanghai 16 Table 11 Shanghai residential market sales Year House built by estate company for sale, million m 2 New house sold Old house sold 2000 13.88 14.46 6.48 2001 15.24 16.81 10.31 2002 17.08 18.46 13.42 Source: Statistical Yearbooks of Shanghai 2.2.3.2. Jiangsu Province Jiangsu Province is situated on the Yangtze River delta in the middle of eastern coastal zone of China, adjacent to Shanghai (Figure 4). It faces the Pacific Ocean to the east with a coastline of 954 kilometres. The Yangtze River divides this province into north and south parts. It has 103,000 km 2of land representing 1.06% of the total area of China (JSB, 2003). Historically, Jiangsu was one of the most developed regions in China, due to its fertile soils and advantageous geographical location. Before 1949, it was the most industrialized province in China. During the first two decades of economic reform, it was not listed as a special economic zone (Wikipedia, 2004) and Guangdong surpassed it in economic importance. In the 1990s, Jiangsu started to grow at a rapid pace as equal economic policies were enforced nationally. Jiangsu has a population of 74.0 million, about 5.7% of the total national population (Table 5). It is one of the most populated provinces in China. In 2003, about 46.8% of its population lived in urban areas, higher than most of its peer provinces (JSB, 2003). Jiangsu had a GDP of 1,245 billion R M B (about 150.4 billion $US) in 2003, representing 10.7% of the total national GDP (Table 6). The per capita GDP was 2,029 $US, about 1.86 times the national average. This is one of the highest in China, except for provincial level municipalities, such as Shanghai and Beijing. The urban disposable income of Jiangsu residents was 1,119 $US (Table 7), only about 1.09 times the national average, much lower than the ratio of per capita GDP of Jiangsu to the national average (1.86 times). Jiangsu is also one of the major foreign traders in China provinces. In 2003, its foreign trade was 113.7 billion $US, representing 13.4% of the national total, a similar percentage to Shanghai in national share. 17 The value of foreign trade was 76% of its GDP. This rate was lower than those of Shanghai and Guangdong, but higher than the national average (Table 8). In 2003, Jiangsu Province attracted 15.8 billion $US foreign direct investment (FDI), the highest of all provinces, representing 29.5% of the total national FDI (Table 9). Most of the investments were in manufacturing industries. Living conditions in the urban areas of Jiangsu Province were not as crowded as in Shanghai. In 1990, average floor space per capita was 17.3 m 2, which increased to 26.5 m 2 in 2002. However, housing investment and construction in Shanghai were increasing at a faster pace, and its average living space has now surpassed Jiangsu (see section about Shanghai housing). The economy and the real estate market differ between regions in Jiangsu. The southern area is the most affluent and investments in this region were 57.9 billion RJVIB. This represents 71.5% of the provincial total (JSB, 2003). Thus, the southern region has the greatest potential for construction, include wood houses. Table 1 2 Jiangsu Province housing construction and investment by estate companies „ _ . . Finished space Space under _ . , _. . Investment Total housing , *_ A _ _• . Residential n . „ _ _. by estate construction by growth, % Year constructed, . _ . investment, .... 2 companies, estate companies, , . „ . „ A , U million m .... 2 2 billion R M B million m million m 1990 102.1 2.6 4.8 1.2 -1995 90.2 24.1 58.0 2000 93.2 17.7 33.5 35.9 8.5 2001 83.2 19.2 38.3 41.4 15.5 2002 71.7 22.6 49.8 54.4 31.3 2003 65.5 25.7 72.0 80.9 48.7 Source: Statistical Yearbook of Jiangsu Province, 2002, 2003 In the past 15 years, total housing construction has been declining from a peak in 1990 (Table 12). In contrast, private housing development has increased from 2.5% of the total housing construction (2.6 million m2) in 1990 to 39.2% (25.7 million m2) in 2003. Another significant change is that private purchases are now the most important demand driver in the housing market. In 1995, about 52.8% of the residential houses in the market were sold to private buyers, but by 2002, 97.9% were sold to individual 18 families (JSB, 2003). This clearly illustrates that the residential housing market is now principally dominated by free market power. The housing market in Jiangsu has been growing steadily in the past few years. Overall sales increased from 11.8 million m 2 in 1998 to 24.0 million m 2 in 2003 (Table 13). The percent of unsold vacant houses has been declining. On the other hand, fast price growth and huge investment in housing construction in 2002 and 2003 make the future market rather unpredictable. Table 13 Jiangsu residential market sales Year Overall new houses sold, million m 2 Sold finished space to space, % Price, new houses, R M B / m 2 Price growth, % 1998 11.8 80.3 1444.57 -1999 - - - -2000 15.6 88.1 1526.66 5.7 (in two years) 2001 17.1 89.1 1665.00 9.1 2002 20.7 91.6 1805.51 8.4 2003 24.0 93.8 1975.98 9.4 Source: Statistical Yearbook of Jiangsu Province, 2002, 2003. 2.2.3.3. Guangdong Guangdong Province is in South China. Surrounding Hong Kong (Figure 2 and 4), this close accessibility to a free market has played an important role in its development, particularly since the economic reforms of the early 1980s. It was the first province that was provided with special policies for economic reforms (Wikipedia, 2004) and has been the fastest developing region in China the last two decades (GSB, 2003). Guangdong has an area of 177,600 km 2, representing 1.9% of China's land territory. It has 15 cities, 73 counties, and 3 autonomous counties. The Pearl River Delta and the Hanjiang Delta along the coast of the South China Sea are the most affluent areas of Guangdong (GSB, 2003). Guangdong Province has a population of 79.5 million (with registered household, "Hukou"), only representing 6.27% of the total national population (Table 5). It is one of the most populated provinces in China. In 2002, 35.2% of the population lived in urban areas (GSB, 2003). In 2003, Guangdong had a GDP of 1,345 billion R M B (about 162 billion $US), representing 11.5% of the total national GDP (Table 6). The per capita GDP was 2,043 $US, 1.87 times of the national average. The 19 urban disposable income of Guangdong residents was 1,496 $US, about 1.46 times the national average (Table 7). In 2003, Guangdong attracted 15.6 billion $US FDI representing 29.1% of the national total. In 2003, Guangdong had the largest foreign trade in China at 283.7 billion $US, representing a third of the national total. Exports were 153 billion $US and imports were 131 billion $US (Table 8). It attracted 15.6 billion $US foreign direct investment (Table 9), which was about 29.1% of the national total and only second to the FDI in Jiangsu in the same year. The private real estate market in Guangdong Province is relatively mature compared with most of other regions in China. This market started in the 1980s and has already experienced many of the developmental ups and downs other regions are currently experiencing. The rules for private real estate development are already established in Guangdong. Real estate related sectors such as finance, construction, sales, rentals, and property management already exist and facilitate smooth real estate development. Home buyers are more familiar with housing loans and feel more comfortable taking on debt to purchase housing (Gu, 2003; Yu, 2003). Guangdong is the largest regional real estate market in China both in terms of the volume and value of construction (Table 14). In 2002, total construction by developers was 120.2 million m 2 of which 92.1 million m 2 was residential construction. The total investment in real estate development was 111.5 billion R M B (13.5 billion $US). In 2003, this investment increased to 121.0 billion R M B (14.6 billion $US), a gain of 8.5% from 2002. This was the lowest annual growth rate since 2000, partly because of the SARS (Severe Acute Respiratory Syndrome) epidemic in the first half in 2003. Table 14 Guangdong Province residential construction (million m2) and investment Total Finished Space under Residential Growth over Year constructed, space in construction investment, previous year, million m 2 urban area in urban area billion R M B % 2000 84.8 20.9 2001 27.4 81.7 97.2 13.2 2002 120.2 31.8 92.1 111.5 14.7 2003 121.0 8.5 Source: Statistical Yearbooks of Guangdong Province 20 Although sales volume increased 25.3% in Guangdong from 22.6 million m 2 in 2002 to 28.6 million m 2 in 2003, the area that was vacant increased to 24.3 million m 2 , which suggests that there has been an excess supply in the market (Table 15). Housing prices declined about 3% in 2003, one of the few provinces which saw a housing price decrease. Industry expects the growth rate in the Guangdong real estate market will slow to 9% annually, which represents a substantial reduction comparing with recent growth rates in the Yangtze River regions (Yao, 2004) Table 15 Guangdong Province residential market sales Year New house sold, million m 2 Luxury house sold, million m 2 Vacant space (all estate products), million m 2 2002 22.6 1.90 21.4 2003 28.3 24.3 Source: Statistical Yearbook of Guangdong Province 2.2.3.4. Overview of All Three Study Regions Based on the economic and housing market growth in the last decades, and their key roles in China's economy, real estate markets in the medium to long term in the three regions of this study should remain attractive. However, the market is unstable and in a state of rapid change, creating some risks. Some of the major characteristics of the market are as follows: • The overall housing condition in these regions is still relatively low and there is a need for additional improvement (Gu, 2003). Urbanization is occurring rapidly and incremental demand for housing will increase (Bao, 2001). The private real estate market is the principal channel for housing and will continue to grow for the foreseeable future (SCC, 1998); • The market is diversifying and demanding higher quality, driven by income growth and the expanding numbers of middle class individuals. Home buyers will require houses of higher quality and there will be growing market share for up-scale houses for the newly affluent classes, expatriates, and foreign workers (SASS, 2001). Although the state has announced policies to restrict the development of luxury houses (ChinaNet, 2003; XinhuaNet, 2003), investment remains high and this segment is expected to grow in the future (Fushan, 2004). It may provide a market opportunity for wood products; 21 • China now has a policy that new houses shall be finished (decorated) before sale (MOCC, 2002a) and some major metropolitan areas have set a time table for that. For instance, Shanghai stipulated that all new houses must be decorated before sale in 2003 (Xinhua News Agent, 2002). This policy will greatly change the decoration (finishing) market. Specifiers will have larger say on material specification, and purchasing power will most likely become more concentrated with developers and builders. Foreign building materials suppliers might have a better chance to compete with smaller domestic suppliers who are in advantageous situation to sell to dispersed individual home buyers; • Although there is an excess supply in most regions, real estate investment is still very strong (NBSC, 2003). However, housing prices are already very high relative to the average income. In the regions of this study, the average housing price is more than ten times the income of the buyers. This imbalance may restrain consumer's purchasing power and cool down the real estate market; • In most big cities, there remains little land in central urban areas for development and the land price is high. In Shanghai, average land price was R M B 2,164/m2 ($US261/m2) in 2003, about 42% of the overall house price. In Guangzhou, it was R M B 1,396/m2 ($US169/m2), about 34% of the house price (Anonymous, 2004c). High land price in central urban areas is slowly driving residential construction to the suburbs. • A popular opinion is that attracted by high profit margins (10-40%, Anonymous, 2004c), China's real estate market is full of small developers. Most developing companies have insufficient capital and speculate on earning quick money. In China, more than 70% of the real estate development investment comes directly or indirectly from bank loans (Zhang, et al., 2003). In Guangdong, only 15.1% of total investment was from developing enterprises in 2003 (Yao, 2004). .These companies are vulnerable to financial fluctuations and put great risks on the Chinese banking system; • The market is experiencing intense competition and consolidation. As supplies increase, the state has tightened several policies, such as raising the threshold for market entry, restricting loans to real estate projects, increasing transparency, and competition in land tendering, etc. In Guangdong, a survey investigated 609 enterprises in October 2002, but by December 2003, only 426 of them were still in business. The others had disappeared or were merged (Yao, 2004); 22 • Since Beijing will host the Olympic Games in 2008 and Shanghai will host the 2010 World Exposition, a large amount of venues and residential buildings will be built in the next four years, potentially driving a continued building boom. 2 . 3 . W O O D C O N S U M P T I O N A N D A P P L I C A T I O N S I N C H I N A Driven by increasing demand for construction, home decoration and the furniture industries, China's wood consumption continues to surge. Due to scarcity of domestic forest resources and the implementation of Natural Forest Protection Program in 1998, China has grown to be the largest importer of industrial roundwood in the world since 2001 (Cohen, Lee and Vertinsky, 2002; FAO, 2003). In 2003, it imported 25.5 million m 3 of roundwood and 5.5 million m 3 of sawnwood (SFAC, 2004). Zhu (2004) estimated the overall wood consumption of China at 182.6 million m 3 (excluding pulp and paper) in 2003. Despite these large volumes, wood is mostly used in furniture manufacturing and home decoration (including floorings, mouldings, millwork, etc.), but rarely used directly as building material in urban regions (such as structural components, walls, partition, sub floor, etc.) except for windows and doors. Industry sources estimated that about 63 million m 3 of wood (29% of total consumption) was used in construction and decoration (Zhu, 2004). Concrete and steel structures are the most widely accepted building technologies and Chinese attitudes towards wood houses and components, especially structural wood components, remain relatively unknown. With the publication and implementation of the design code for wood structures (MOCC & GAQSIQC, 2003; C M H C , 2003) and the inspection code for wood structures (MOCC, 2002b), modern wood frame construction has become a possible choice in the residential and non-residential market (Anonymous, 2001b; O'Connor, 2003 and 2004). Nevertheless, the potential of wood material applications, whether in wood frame construction or as components in concrete and steel construction, is not clear and additional information is required, particularly from Chinese specifiers, to be able to better understand that potential. Architects, structural engineers, builders, and developers are considered to have tremendous influence on building specification process. From the literature reviews (Ding, 20Q3a and 2003b), it was found that 23 architects, structural engineers and developers were the most influential people for specifying building materials. Their influence may increase due to the new regulations in 2002 that force encourages developers to sell completely finished houses rather than "empty shell" houses (MOCC, 2002a). This trend may increase the influence of these specifiers for structural and non-structural materials. The following section provides background information on two important specifier groups, Chinese architects and engineers. 2.4. CHINESE BUILDING SPECIFIERS In China, there is a dual qualification system in the construction design sector, namely, both design firms and individual architects and/or engineers are required to attain certain qualifications or certificates in order to carry out their business (Ding, 2003b). Stipulated by the Construction Law of China (PRC, 1997), each of the qualification systems has several levels and design firms and designers can only design projects compatible with their qualification levels (MOCC, 1999a; SCC, 2000a and 2000b). 2.4.1. Q U A L I F I C A T I O N S Y S T E M F O R A R C H I T E C T S Before 1995, China had a qualification system different from the prevailing international qualification systems. Architects were evaluated according to national or provincial standards into three levels: assistant architects, architects and senior architects. Only those who had qualifications at or above architect level could carry out architectural designs independently. The current registration systems for architects started in 1995 (SCC, 1995; MOCC, 1996). There are two professional levels of registered architects, Level A and Level B. Candidates who intend to become registered architects must pass national examinations executed by the National Registered Architect Council. A person who passes the examinations is called a qualification holder. A qualification holder can only register and execute his/her professional activities through a registered design firm (MOCC, 1996; NRAC and NRSEC, 1999). A registered architect must reregister when he/she leaves the current firm and is employed by another firm. They are not allowed to register if they do not work for any registered design firm, (MOCC, 2001a). An unregistered architect cannot execute professional designs in their personal name. 24 To be compatible with the qualification system, the Ministry of Construction of China set up a classification system which defines construction projects into five classes according to their scales and complexities with Class 1 of the largest scale or complexities. A Level A architect may execute his professional activities without any restrictions on scale or complexities of construction (MOCC, 1996, 1997, 1998). Level B architects may only work on construction projects of class 3 or below as defined by the national classification of construction projects (MOCC, 1999c). Construction projects of class 5 and below may be designed by non-registered architects (MOCC, 1996, 1997, 1998). When the new system was introduced, some of the architects who already had architect or senior architect titles in the old system were exempted from examinations (SCC, 1995). However, these older titles have now been abolished and it is important to know that, according to the current regulations, only architects with Level A or B registered designation can now engage in their professions independently (MOCC, 1996, 1997). Many architectural designers who do not have registered designations are working as members in design teams led by registered designers. 2.4.2. QUALIFICATION SYSTEM FOR STRUCTURAL ENGINEERS The registered structural engineering system is also rather new in China. In the past, the title of structural engineer was not clearly separated from other engineering professions, which had three levels: assistant engineer, engineer and senior engineer. In 1997, the Interim Regulations on the Qualification for Registered Structural Engineer was issued to make Chinese construction design systems more compatible with the world's prevailing systems (MOCC, 1997). The registered structural engineering system is very similar to the registration system for architects. To get either Level A or Level B qualification, candidates must pass the national examinations managed by the National Registered Structural Engineering Council. The qualification holders can only register through the design firms they are working for (MOCC, 1998; 2001a; N R A C and NRSEC, 1999). Similar to the architects' system, the older titles have not been abolished and holders of these titles may work as members in design teams led by registered designers. The Chinese rules for registered architects and structural engineers are quite similar to other major systems in the world. The most conspicuous differences are that both Chinese systems have two 25 qualification levels, while most systems of other countries have only a single level. Chinese executive councils have been working together with international partners to develop more compatible and mutual recognised qualification systems (NABER(S) and ASE, 1998; NCEES and NABER(S) , 1999). 2.4.3. QUALIFICATION SYSTEM FOR BUILDING DESIGN COMPANIES In China, design firms are also required to hold qualifications, separate from those held by designers, to carry out their business (PRC, 1997; SCC, 2000b; M O C C , 1999a; 2000, 2001b). The construction administration department of the central and local governments are correspondently responsible for management of design qualifications. There are three levels of qualifications for architectural and engineering design firms, Level A , Level B and Level C (MOCC, 2001b), each can design buildings of certain sizes and complexity (MOCC, 1998, 1999c and 2000). Level D is a complementary class and is applied only in some less developed regions and may be established with special approval (MOCC, 2001b). The qualifications can be obtained or promoted by two separate criteria: 1) employing certain numbers of architects and engineers with relevant levels of personal qualifications, and, 2) having sufficient business experience and achievements for the firm itself. 2.4.4. STATE-OWNED AND PRIVATE DESIGN COMPANIES Architectural and engineering design institutions were once integral parts of different levels of government in China. There were central, provincial, and local levels of design institutions. Each administrative region (such as provinces and cities) had a few government controlled design institutions that employed both architects and engineers working together. These firms usually were large in size and comprehensive in functions. In 1994, the central government initiated the course to transform these institutions from governmental branches into corporate entities (MOCC, 1994). However, this transformation was slow and unsuccessful due to lack of incentives and operational policies (MOCC, 1997). In 1999, the central government required all governments to dismantle these institutions and separate them from governmental structures (MOCC, 1999b). Now all these institutions are independent companies, either state-owned or publicly 26 traded private corporate entities. However, these companies still maintain a very close relationship with governments and their leaders are still appointed by governments. Almost no foreign design enterprises have worked in China or on Chinese projects since 1948, except some from the Soviet Union in 1950s. In 1986, China started to open the door of the design market to foreigners. It allowed foreign designers to engage in designs on a contract basis, but only in cooperation with a Chinese design company. These collaborations were often for projects that were technically too difficult for Chinese designers (SPCC and MFTECC, 1986). In 1992, foreign design companies were allowed to establish joint-ventures with Chinese partners (MOCC and M F T E C C , 1992; M O C C , 1993b). However, the policy was rather restrictive since domestic private design companies were not allowed to set up joint-ventures with foreign partners without the explicit approval by central government departments (MOCC and M F T E C C , 1992). China further deregulated the construction design market restrictions in 2002 when wholly foreign invested enterprises (WFIE) and joint-ventures were allowed in the new regulations (MOCC and M F T E C C , 2002). Restrictions on Chinese private enterprises were also eliminated. WFIEs are required to have at least one quarter of the minimum number of the designers for certain qualification level to be foreigners who hold Chinese qualifications. For joint-venture companies, this limit is one-eighth (MOCC and MFTECC, 2002). The building design market partially opened for domestic private designers in 1993 (MOCC, 1993b). Regulations were first tested and implemented in Shanghai, Guangzhou and Shengzhen, which reflected the cautiousness of the Chinese government about private design enterprises, and then were nationally implemented in 1995 (MOCC, 1995). The number of companies that were allowed to set up was decided according to a quota system, and the qualification certificates had to be approved by the Ministry of Construction at the central government. Despite these difficulties, there has been an explosion of small boutique design firms specializing in specific types of design since 1995. Nevertheless, in most regions, the design markets are dominated by a few big design firms which were formerly state-owned and still have significant influence with regional political decision makers. 27 The booming Chinese design market is increasingly attractive for foreign designers and design companies. One of the major barriers for them may be the qualification system. Many individual foreign designers worked on Chinese projects through a consulting service arrangement with a Chinese design company. For foreign design companies who want to set up enterprises in China, Chinese expatriates who have overseas citizenships and at the same time have both Chinese qualifications and overseas educational backgrounds, are the best candidates to fulfil the requirements on minimum number of foreign designers in foreign-invested design companies. As mentioned in this section, China currently does not have a culture that uses large amounts of wood materials in construction, especially for structural purposes. It has been adopting modern architectural styles, construction technologies, and building materials from foreign countries throughout the last century. China's economy, along with its construction market, has developed greatly since the late 1970s. To successfully introduce wood frame houses and wood materials into China's construction market, it is necessary to benchmark Chinese building specifiers' knowledge about wood products and identify the most efficient channels for future promotional and educational marketing campaigns. 28 3. PROBLEM STATEMENT AND OBJECTIVES China is now in a period that is experiencing tremendous economic, cultural, and social changes. The driver of much of the changes has been the rapid shift from a planned economy to a market economy. For example, housing construction and design were managed, operated, and controlled by the governments until the early 1990s and, only a decade later, is operating in a relatively free market driven by private ownership and market forces. Nevertheless, government policies are still very influential in this market. China is also undergoing rapid modernization. New cultures, technologies and products are entering China at an unparalleled speed. However, China has a long and unique culture of its own and the successful promotion and adoption of many modern products can only be achieved by tailoring the products according to Chinese styles and demands (Cohen and Lee, 2000; Cohen, 2003). In the construction sector, steel, concrete, and bricks, as well as their associated technologies, are widely accepted and deemed culturally suitable. Wood frame houses and wood as structural building material in urban settings are relatively new to the Chinese people, as well as to the building specifiers. As wood products and materials for building are introduced to China, it is important to have baseline information as a point of reference to identify changing perceptions and evaluate the impacts of promotion programs. This baseline information also can be used to evaluate future initiatives and new opportunities for promotional programs. Building specifiers often act as opinion leaders in this industry, and their acceptance and knowledge of wood products is a prerequisite to the successful promotion of wood building technologies and products in China. However, few studies had addressed Chinese specifiers in terms of their work characteristics, their roles and contributions on material specification, and their knowledge and opinions about wood materials and wood houses. In addition, little was known on how these specifiers gathered information about new materials, products, and systems. This information gap is an obstacle for the development of efficient marketing programs. As a country only recently developing a market economy, there is little experience or history of industrial market research in China. Companies and their employees have little experience in completing surveys, 29 interviews or providing information for research purposes. As one of the first industrial market research projects, one of the purposes is to explore what types of data collection are most suitable, cultural problems in conducting industrial market research in China and to provide guidance for future research work. The major objectives of this research initiative were: • To investigate specifiers' current knowledge about both structural and non-structural products used in residential and non-residential construction in China. This will provide a point of reference to assist in developing effective educational and promotional campaigns targeted to specifiers in China; • To determine how material and product decisions are made and the relative contributions of architects, engineers, and developers in the specification process. This will aid in determining target groups for future promotional campaigns; • To determine the best methods to transfer knowledge about wood materials, products, and systems to each specifier group. This will assist in determining the best channels to use for promotion and education of targeted specifier groups, and • To better understand the possibilities and problems associated in industrial market research in China--a new market economy in a unique Asian culture with little history of market research. This will help identify opportunities and provide guidance for future surveys. 30 4. METHODOLOGY Following an extensive literature review concerning China's construction tradition and styles, construction market status, and registration systems for Chinese building designers (Ding, 2003a and 2003b; Section 2 in this thesis), a field survey was developed to collect information based on the objectives listed in Section 3. This study was designed to collect primary data from Chinese building specifiers in the Shanghai Municipality, and the provinces of Jiangsu and Guangdong. As there is little history of market research in China due to its very recent shift to a market economy, this type of market research can only be considered exploratory. Initially, the data collection procedure was designed to be a telephone survey and the sampling methods and questionnaires were developed according to the requirements for telephone survey. However, the field investigators met substantial difficulties in implementation and they changed it to a mail survey with no consultation to ensure the completion of the survey. The original survey instruments and methodology were unilaterally simplified by the field investigators. As some questions of interest in original questionnaires were deleted when the survey was simplified and changed to a mail survey, a short complementary survey was designed and completed at seminars, attended by members of similar specifier groups, held in Shanghai and Beijing in December 2003. It should be made clear that the originally planned telephone survey was not carried out. Instead, a simplified mail survey was taken place and the results reported in this thesis were all from the mail survey and from the two relevant questions in the seminar questionnaires. The following parts in this section discuss the principles for mail surveys. Nevertheless, it must be clarified that these rules were not completely followed in the field survey, due to the investigators' lack of experience in market research and their failure to communicate the change in mode of data collection to the researchers at U B C . Lessons learned about completing survey in China (one of objectives of this study as stated in Section 3) are discussed in Section 7.9. Thus, Section 4.1-4.3.2 summarizes the methods that should have been followed for a mail survey. 31 For a more detailed description of the actual implementation of data collection procedures please see Section 5. It provides useful lessons for future market research in a society that has only recently become a market economy and where there is little cultural familiarity with market research. The methodology originally designed for the telephone survey is attached in Appendix 5. To reiterate, the following sections 4.1 - 4.33, are a summary of the methods that should have been followed for a mail survey, and not the methods actually used. 4.1. POPULATION AND SAMPLING FRAME For this study, building specifiers were defined as registered architects, registered structural engineers (referred to as engineers) and developers in China. The geographical locations selected were three eastern coastal urban regions of China: Shanghai Municipality, and major cities in Jiangsu and Guangdong Provinces. According to Chinese regulations, only registered architects and engineers can perform construction designs independently, so registered designers in these areas would be considered as sample populations for designers. Non-registered architects and engineers should be excluded even though they might be working with registered designers in some design firms. Recently published lists by the governmental registration agencies provided the names of registered architects and engineers in the study areas. The lists include designers at all qualification levels which were currently working in design companies and would be used as the sampling frames. For the developer population, the most recent yellow page listings in each of these three regions should be used as the sampling frame. Although these listings are considered to cover most enterprises, it is unknown how many new, start-up developers were missed. 4.2. SAMPLING METHODS All the architects and engineers at different qualification levels and working at companies with different qualifications should be included in the population to avoid sampling error caused by the omission of elements of the population being surveyed (Fowler, 1993). 32 To prevent coverage error caused by unequal chance of selection for each member of the sampling frame (Weisberg et al., 1996), the populations of architects and engineers should be stratified according to qualification levels and then randomly sampled for each region. The developers should be randomly sampled for each region from the entire list derived from the yellow pages. Efforts should be made to minimize non-response rate by simple wording of questions, clear declaration of the study purpose, and promising to provide a summary report for participants. Times of responses should be recorded so that non-response bias could be detected (Armstrong and Overton, 1977; Zikmund, 1997). To get samples large enough for statistical analysis, minimum numbers of responses should be established according to the chosen statistical approaches. The actual number of questionnaires to send out should be decided upon budgets, labour and time availabilities, and the potential response rate estimated from surveys carried out in similar circumstances. 4.3. DESIGN OF THE INSTRUMENT Three questionnaires should be prepared for architects, engineers and developers. These questionnaires were to be very similar in content with a few questions differing according to each specifiers' professional characteristics. For instance, a question referring to knowledge about non-structural wood materials would only be asked in the questionnaire for architects but omitted from questionnaire for engineers and replaced with one concerning structural wood materials. Wood products referenced in the questionnaires should be those that are technically well defined and commonly used in North American (FPL, 1999). To minimize measurement error, questions should be kept as clear and simple as possible (Czaja and Blair, 1996). Questionnaires were to be reviewed and discussed through several iterations with both English and Chinese speaking persons. The Chinese and English versions should be translated and checked by bilingual experts to ensure that the meaning in both languages was kept identical. 4.3.1. INTRODUCTION TO THE QUESTIONNAIRES 33 A cover letter, or an introduction, is usually required in a mail survey to give a brief description of the investigators and the survey. It should include information regarding the purpose of the study, its organization, how the survey is being conducted, the importance of the study, the rules of voluntary participation, a promise of confidentiality, reasons why the results would be useful and ways to contact the investigators. 4.3.2. QUESTIONNAIRES To assure accurate and representative information being collected in the survey, the following principles should be followed in preparing the questionnaire: • The language used in questionnaires should be kept as simple, clear and accurate as possible, so each respondent would understand what they are being asked and understand the meaning in the same way (Fink, 1995). • Open-ended questions should be avoided to prevent difficulties in the interpretation of the results (Czaja& Blair, 1996). • When possible, questions for architects, engineers, and developers should be kept identical to facilitate comparisons among specifier groups. The questionnaires should be pilot tested, so necessary changes and improvements can be made in contents, order of questions, timing, etc. 4 .3 .3 . CONTENTS OF QUESTIONNAIRES According to the objectives of this research, the questions that were to have been included in the questionnaires (whether collected by phone or by mail surveys) covered seven categories. Some questions, such as primary building structural types, building end uses, information channels for new building technologies and materials, and types of wood product, were adapted and modified from Kozak and Cohen's questionnaires for wood non-residential construction survey (Kozak and Cohen, 1997 and 1999). The categories in the questionnaires include: • Workloads of the specifiers in the last three years based on different types of buildings according to end uses, heights, areas, and structural materials used; 34 • Relative contributions of specifiers on the specifications of both structural and non-structural building materials; • Knowledge and perceptions of designers about structural and non-structural building materials; • Major concerns about the use of wood for construction in China; • Designers' major requirements and expectations for new building materials; • Major channels through which the specifiers find and receive information about new materials and technologies and; • Demographic and personal information about specifiers including gender, age, educational background, years of work experience and qualifications of both the designers and their companies. The previous sections (from 4.1) detail how the mail survey would have been managed had the U B C investigators been informed of the switch from a telephone survey (methods outlined in Appendix 11.5) by the field investigators prior to completion of data collection. 4.3.4. B E H A V I O U R R E S E A R C H E T H I C S The questionnaires were reviewed and approved by the Behavioural Research Ethics Board of The University of British Columbia on December 19, 2003 (File No. B03-0761). 4.4. DATA ANALYSIS The collected data was entered into Excel worksheets and descriptive analyses were conducted using Microsoft Excel 2000. There was no testing for non-response bias because early responses and late responses were not recorded. No inferential statistical analyses were carried out in the survey due to the sampling problems noted in Section 5 which prohibited inference to the population. 35 5. IMPLEMENTATION Data collection was contracted to Forintek Canada Corp. who was completing a complementary study in wood roof trusses. The Civil Engineering Faculty at Tongji University, Shanghai, China, was sub-contracted to complete the data collection in China having completed work previously for Forintek Canada Corp. The author of the thesis and a researcher from Forintek (Antje Wahl) went to Shanghai in October 2003, to test the instruments, arrange field investigation, and train the Chinese co-operators. The survey instruments (both in English and Chinese), the Excel files for data recording, and the interview scripts in Chinese that were designed for telephone survey were provided to the co-operators in Shanghai. Eleven specifiers were personally interviewed to test the contents of the questionnaires and a telephone interview was made to test time needed for completing telephone interview. A short training session was held in Shanghai for the telephone interviewers. The collected lists of registered architects and engineers for the three regions were provided to the Chinese co-operators for data collection. They were also directed to use the lists of developers from the latest local yellow pages. However, during initial implementation of the telephone survey, the field investigators found it was very difficult to collect data using telephone interviews. Their major reason was that Chinese people were reluctant to release opinions and information over telephone, often to people that they did not know. The co-operators in Shanghai decided to change the data collecting method from a telephone survey to a mail survey without informing and obtaining consent from U B C or Forintek representatives. The original survey instruments and methodology designed for telephone survey were revised and some questions were dropped off and others were simplified, for example, one of the options "clients /homebuyer", in a question concerning contributions on material specification, was removed from the original question. To repeat, this was done without the knowledge of the Canadian researchers. Eight hundred questionnaires were mailed out to specifiers in Shanghai City, Jiangsu Province, Guangdong Province and some other cities. To guaranty an adequate response rate, questionnaires were mostly sent to specifiers and firms that maintained good connections with the co-operators at Tongji 36 University in Shanghai. Telephone follow-ups were made to encourage the specifiers to reply. By the time of the deadline, 373 responses were received representing a 46.6% response rate but not from a random sample. Due to a lack of an intellectual infrastructure for a social science survey, proper scientific methodology was not fully employed in the process of data collection. Therefore, caution is necessary in interpreting the data from the mail survey. They are useful but might not reflect the population exactly that it could be. Major deviations from the work plan and common principles for mail surveys included the following: • There were no cover letters or introductions attached to the questionnaires; • Some of the questions in the original questionnaires were eliminated; • Some questions in the original questionnaires were simplified and revised; • The working population was extended to non-registered designers; • The population was not stratified for sampling according to qualification levels; • The lists provided were not used and sampling was not random but targeted towards the specifiers that were known to the Tongji University employees; • Response 'dates were not recorded so non-response error was difficult to test using a comparison of late to early respondents; • Some of the responses were obtained with assistance of personal encouragements; and • The targeted number of responses from different regions and professions were not reached. Since some questions were deleted, a complementary survey was designed to collect some of the missing data at the seminars held in Shanghai and Beijing, December 2003. The questionnaires were distributed to every attendant before the seminars started. Attendants were asked to finish the questionnaires before the seminar started to avoid the possible bias caused by the information on the seminars. However, it must be noted that most respondents did not complete the survey until after the opening remarks had been concluded. These opening remarks heavily promoted the use of wood and may have biased the results. Returned surveys were used as entries to an on-site draw for a digital camera to encourage replies. There were 247 respondents from the two locations for these seminars. Response rate was estimated at over 90 37 percent in both Shanghai and Beijing, despite the difficulty in estimating attendance due to late entrants and early exits. Despite these methodological challenges, the data collected provides useful information on China's specifiers of building materials and products. 38 6. RESULTS The results section is divided into nine parts. Sub-section 6.1 reports on the distribution of responses and response rates and sub-section 6.2 presents demographic information of the respondents. In sub-section 6.3, the specifiers' practice characterization is presented and sub-section 6.4 reports on the contributions of specifiers on material specification. The status of specifiers' knowledge and opinions about wood materials are in sub-section 6.5, while in sub-section 6.6, the important factors for new building materials are addressed. Sub-section 6.7 presents information sources for Chinese specifiers. Sub-section 6.8, presents the results of the two survey questions completed during conferences in Beijing and Shanghai: 1) the influence of government policies and 2) the importance of interior environment quality in building design. The last part, Sub-section 6.9, discusses the challenges of doing market research in China. 6.1. SURVEY RESPONSE 6.1.1. MAIL SURVEY In the 800 questionnaires mailed out to specifiers in Shanghai Municipality, Jiangsu Province, Guangdong Province and some other cities, 373 respondents replied representing a 46.6% response rate. The response rate is considered a relatively high one, even in other countries where market surveys targeted towards material specifiers are more frequent (Kozak and Cohen, 1999; Smith et al., 2003; O'Conner et al., 2004). However, this response rate was attained from a non-random sample, i.e. designers and design firms that maintain good connections with the co-operators at Tongji University in Shanghai. Thus the sample was selected to ensure a artificially high response rate. This approach was biased and made difficult to statistically infer results to the population. Although it is important to test non-response rate in mail surveys (Kanuk and Berenson, 1975; Armstrong and Overton, 1977), the early and late responses were not recorded1 and non-response bias was not tested. 1 The field investigation for this study was changed from a telephone survey into a mail survey by the co-operators in Shanghai and proper methodological rules were not fully followed as discussed in Section 5. 3 9 Furthermore, since the sample was not random and results cannot be inferred to the population, testing for non-response bias would not provide additional statistical robustness. Of the 373 respondents, 51.7% of the respondents were from Shanghai, 22.3% from cities in Jiangsu Province, 21.2% from cities in Guangdong Province, and 4.8% from other regions (Table 16). This was most likely due to the reputation and connections of the cooperative institution, Tongji University, home of one of China's top architectural and civil engineering schools. Because of their connections in their home city, they were more successful in attracting respondents from the Shanghai area compared to Jiangsu and Guangdong Provinces. In Shanghai, each of the three specifier groups contributed about one-third of the total responses (Table 16). However, in both Jiangsu Province (15.7%) and Guangdong Province (7.6%), the proportions of developers were much lower than in Shanghai (31.6%), and overall response rates were also less. These uneven sample sizes limited the capacity to make reliable comparisons of developers between regions and inhibited comparisons between developers and other specifiers. Table 16 Regional distribution of respondents Region Architect Eng ineer Developer Total of region Number Percent Number Percent Number Percent Number Percent Shanghai 61 31.6 71 36.8 61 31.6 193 51.7 Jiangsu 32 38.6 38 45.8 13 15.7 83 22.3 Guangdong 33 41.8 40 50.6 6 7.6 79 21.2 Others 7 38.9 11 61.1 0 0.0 18 4.8 Total 133 35.7 160 42.9 80 21.4 373 100.0 Many respondents did not answer all of the. questions resulting in some questions with low numbers of respondents (Table 17). There may be two reasons for this. First, some of the respondents may be concerned about releasing personal and corporate information. For example, 71.4% of architects and 53.8% of engineers declined to answer the question about company qualifications. The second reason might be that respondents failed to remember some details or felt that it was too difficult to estimate percentages requested in some questions. For example, 75.5% of architects and 40 57.5% of engineers did not answer the question about numbers of architects and engineers in their design companies (Table 17). Results and discussions in this thesis were made based on the data computed from the respondents who tually answered the specific questions, not the total number of respondents. Table 17 Responding Rates of Questions % of all % of all % of all Question architect engineer developer respondents respondents respondents Personal Qualification 56.4 85.0 N/A Company qualification 28.6 46.2 N/A Number of architects at workplace 24.8 42.5 N/A Number of engineers at workplace 24.1 42.5 N/A Years of design's experience 91.0 89.4 N/A Years of developer's experience N/A N/A 87.5 Workload in different end uses of buildings 73.7 77.5 62.5 Workload in different heights of buildings 73.7 78.1 62.5 Workload in different areas of buildings 81.4 77.5 62.5 Workload in different structure types of buildings N/A 98.1 91.2 All other questions >97.2 >97.2 >97.2 6.1.2. SEMINAR QUESTIONS Data from the two seminar questions are discussed separately in this report. There were 247 respondents in total from the seminars in Shanghai (159 responses and 64.4% in total responses) and Beijing (88 responses and 35.6% in total responses) (Table 18). Both of the response rates were estimated at over 90 percent. This was likely due to the draw for a digital camera for survey respondents. Table 18 Regional distribution of respondents at seminars Region Architect Engineer Others Total of region Number Percent Number Percent Number Percent Number Percent Shanghai 30 18.9 79 49.7 50 31.4 159 64.4 Beijing 12 13.6 30 34.1 46 52.3 88 35.6 Total of profession 42 17.0 109 44.1 96 38.9 247 100 41 Most seminar attendees were architects or engineers, although there were significant numbers of developers, builders, government officials, researchers, professors and students. Data from architects and engineers was analyzed separately to correspond to the mail survey data. Seminar questionnaires asked no demographic questions, so the demographic status of seminar attendees was not discussed in Section 6.2 Demographics and Geographic Information. 6.2. D E M O G R A P H I C I N F O R M A T I O N 6.2.1. G E N D E R Of the 373 respondents, 73.7% were males and 24.3% were females. Figure 5 shows the breakdown by each specifier group. B. Gender, architects C. Gender, engineers A. Gender, overall D. Gender, developers Figure 5 Gender of the respondents 6.2.2. A G E Most architect respondents (51.9%) were between 21 to 30 years of age, followed by 31 to 40 years (33.3%), resulting in 85.2% of all architects aged 40 or less (Figure 6). Most engineer were in the 31 to 42 40 years group (47.1%) and 38.2% in the 21 to 30 years age group resulting in 85.3% of them aged 40 years or less. This age distribution is quite young compared to other countries (O'Conner, et al., 2004). It is most likely a result of the educational gap caused by the Great Cultural Revolution from 1966 -1976 in China (see Note 7), and the expansion of architectural and civil engineering schools in recent decades. Another reason might be the changes in registration systems for architects and engineers (SCC, 1995; M O C C , 1996), which may have led to a lack of response from some of the older architects and engineers who were unable to pass the national examinations and attain registered designer status. 1 21-30 i 31-40 1 41-50 51-60 } 61 S Architect S Engineer Figure 6 Age distributions of Chinese building designers 6.2.3. EDUCATION Almost two-thirds (64.3%) of architects had completed a university Bachelors degree and an additional 16.5% had a college education (Figure 7). Another 17.4% had graduate degrees (either a Masters degree or a Doctorate). Therefore, only a few respondents had education levels lower than a college degree. The majority of engineers (61.4%) had completed a Bachelors degree and an. additional 21.5% had a Masters degree. Only 13.3% engineers had only a college education and the percentage of engineers with less than a college degree was relatively small. Results indicated that the architects and engineers had very similar levels of educational background (see Figure 7). The percentage of engineers with education levels higher than master degrees was somewhat higher (24.7%) than that of architects (17.4%). 43 8 0 % 6 0 % 4 0 % 2 0 % 0 % I tech / trade college university masters doc to ra l school others H A rch i tec t SS E n g i n e e r ! Figure 7 Educational backgrounds of Chinese building designers 6.2.4. DESIGNER QUALIFICATIONS A large proportion (43.6%) of the architects and some (15.0%) of the engineers did not indicate their personal qualification levels. The majority (58.7%) of responding architects were registered as Level A, with another 20.0% registered as Level B. An additional 21.3% of respondents had no or other types of qualifications (Figure 8). Nearly two thirds of responding engineers were Level A Registered Structural Engineers (65.4%), while only a small number (7.4%) of them were Level B. An additional 27.2% held no ort other types of qualifications. 80% 60% 40% 20% 0% n l b 1 H Level A Level B Others • Architects H Engineers Figure 8 Qualification of Responding Architects and Engineers 44 6.2.5. C O M P A N Y Q U A L I F I C A T I O N S A majority of respondents, 71.4% of the architects and 53.8% of the engineers, did not answer this question. Among respondents, the majority (86.8%) were working in Level A design firms (the highest level) while only 13.2% were from Level B design firms (Figure 9). No architect indicated that they were working for Level C design firms. Seventy three percent of engineers (73%) were working in Level A design firms and 25.7% of them were working in Level B design firms. There were no responses from engineers working for Level C design firms. 100% 80% 60% 40% 20% o% Level A Level B Level C Others • Architect H Engineer Figure 9 Company Qualifications According to the published lists of registered architects, engineers and design companies in three regions, the ratio of Level A to Level B architects was 1 to 1.18. The ratio of Level A to Level B to Level C companies was 1 to 1.7 to 1. Obviously, responding designer's and company qualifications were quite different from those in the sample frame. The reasons for this could include: • Sampling was not made according to the collected lists provided to the field investigators; • The sampling procedure was not random. The sample frame were not stratified according to qualification levels; • The selection process may have favoured large and high-qualified companies. This was confirmed during the author's trip to Shanghai; 45 • The questionnaires were not delivered directly to designers but to the leaders of companies. They passed the questionnaires down to designers, in most cases, to department leaders or project leaders. These people usually have higher ranks and qualifications in the companies. 6.2.6. E X P E R I E N C E A N D C O M P A N Y SIZE There were 9.0% of the architects and 10.6% of the engineers that did not reply to the question about length of experience. About 75% of architects and 57.5% of engineers did not indicate the numbers of architects and engineers in their companies. Architects worked for large firms with an average size of 63 architects and 81 engineers for each firm. Engineers had very similar results and estimated their firms employed 61 architects and 76 engineers on average. The design companies were very large that reflected the fact that the construction design market was still dominated by large state-owned companies. Sampling biases might also contributed to this inclination. 12.0 -i : 1 . 10-0 1 I '^H^i Architect Engineer Developer Figure 10 Work experience of Chinese specifiers Architects indicated that they had an average of 10.3 years of work experience while engineers had 10.9 years of work experience (Figure 10). This is quite short compared to the typical 26 years of experience of the designers in US and Canada (O'Conner, et al., 2004). As discussed previously, this may be due to the education gap from 1966-1977, recent increases in the number of graduates and the adoption of the new registration systems. Developers had an average of 9.2 years experience in the industry (Figure 10). That is very short in global scope. However, it is understandable since the Chinese real estate market was only initiated in 1980s. 46 6.3. CHARACTERIZATION OF PRACTICE These questions were designed to determine the workloads of specifiers based on four buildings categories: end uses, heights, areas, and structural materials. 6.3.1. END USE OF BUILDINGS The largest workload in the past three years for architects (40.2%) was for residential buildings (Figure 11). Commercial (21.1%) and industrial buildings (15.9%) were also their important workloads. For engineers, the largest workload was also for residential buildings (37.8%), followed by industrial (25.1%) and commercial (19.3%) buildings. Residential development accounted for almost 2/3 of developer's projects (62.8%) followed by commercial construction (18.2%). The results confirmed that housing is the key driver for the design and construction industry in China. 1 I -• H ^ ^ U , residential c o m m e r c i a l industrial institutional others • Archi tect ED E n g i n e e r • D e v e l o p e r Figure 11 Workloads on different end use buildings of Chinese specifiers Table 19 Types of building end uses by specifier group and regional breakdown (%) Occupation Region Residential % Commercial % Industrial % Institutional % Others % Architects Shanghai 38.7 20.1 18.4 11.6 11.2 Jiangsu 31.0 20.0 17.1 8.8 23.1 Guangdong 50.0 26.4 7.2 8.4 8.1 x Engineers Shanghai 35.1 19.8 24.3 8.8 11.9 Jiangsu 37.1 19.1 30.9 10.7 2.2 Guangdong 48.3 19.4 17.8 10.9 3.7 47 Developers mostly focused on residential and commercial construction, whereas architects and engineers' design business was more diverse. The reason for this is that architects and engineers designed not only for developers but also for other clients, such as industrial and institutional clients. There were regional differences between the architects and engineers shown in Table 19. In Guangdong Province, both architects and engineers had higher proportions of their workloads in residential design compared to those in Shanghai City and Jiangsu Province. This could be due to the difference in timing of economic reforms, that started 10 years earlier in Guangdong than in Shanghai and Jiangsu. The latter two regions are now investing heavily in the manufacturing sectors that have led to a stronger demand for industrial construction. 6.3.2. BUILDING HEIGHT Workload distributions for architects, engineers and developers were similar in terms of building height. They spent the most time (>60%) on buildings between 4 and 20 stories. Buildings less than 4 stories or more than 20 stories had small shares of their work load (Figure 12). In all three groups and for all three regions, low-rise buildings (7 - 20 stories in height with elevators), represented the largest workload for all specifiers (Figure 12). This height group represented 59.4% of developers' total workload, 52.1% for architects and 49.6% for engineers. Developers had more of their workload devoted to taller buildings (> 20 stories). 5 0 % 4 0 % 3 0 % 20% 10% H o% 1-3 stories 4-6 stories 7-20 stories >20 stories | B A r c h i t e c t • E n g i n e e r S3 D e v e l o p e r Figure 12 Workloads based on building height by specifier group 48 In Shanghai, the workloads of architects and engineers were relatively evenly split among all four height groups (Table 20). However, for architects and engineers from Jiangsu and Guangdong Provinces, workloads were more focused on buildings 4-6 and 7-20 stories in height. Architects and engineers in Guangdong spent more of their time on high-rises (>20 stories) compared to those in Jiangsu Province. In these three cities/regions, the number of "low-rise" buildings (7-20 stories with elevators) has surpassed the number of multi-family walk-up buildings (usually 6 stories or less). This may reflect an increasing scarcity of land for development in these densely populated metropolitan areas, combined with an increasing desire of the growing middle class to avoid the need to walk up numerous flights of stairs on a daily basis. In China, very few residential buildings constructed after the 1980s were lower than four stories due to insufficient land supplies. In most cases, buildings less than four stories are likely industrial or commercial buildings used as workshops, warehouses, markets, shopping malls, etc. Therefore, these results showed that construction in Guangdong seemed more focused on housing and office buildings, e.g. taller buildings, while in Shanghai the market was more diverse in building end uses and heights. Table 20 Building heights by specifier group and regional breakdown Occupation Region 1 - 3 stories % 4 - 6 stories % 7 - 2 0 stories % > 20 stories % Architects Shanghai 22.9 28.9 31.2 17.1 Jiangsu 13.5 46.2 35.4 5.0 Guangdong 4.2 21.3 43.2 31.3 Engineers Shanghai 27.1 25.9 28.2 18.9 Jiangsu 11.6 35.0 40.6 12.8 Guangdong 7.2 33.1 39.1 20.6 Older architects and engineers tended to work on taller buildings while younger architects focused on building less than 7 stories in height (Table 21). This may be due to the need to have the most experienced and senior design professionals to work on the tallest, and often most complex and costly buildings. 49 Table 21 Building heights by specifier age group Occupation Age (years) 1 - 6 stories % > 7 stories % Architects <40 49.0 51.0 >41 41.4 58.6 Engineers <40 54.9 45.1 >41 34.1 65.9 6.3.3. AREAS OF BUILDINGS The most common building size in all specifiers' workloads was the category between 5,000-20,000 m 2 (Figure 13). Architects and engineers were more focused on designing buildings <5,000m2 and 5,000 to 20,000m2 while developers worked mostly on properties between 5,000 to 80,000m2. 1 lill . . . *' I -<5,000 5,000-20,000 20,000-80,000 >80,000 I | E l A rch i tec t • Eng ineer S D e v e l o p e r | Figure 13 Chinese specifiers' workloads on buildings at different areas (m2) For a building at the area of 5,000m2 to 20,000m2, assuming an average dwelling unit size of approximately 80 m 2 , these building can accommodate about 60-250 families. For buildings of this size, they are mostly 7 to 20 stories or more. In China's urban areas, city governments usually plan the blocks or neighbourhoods that are going to be developed, renovated and/or rebuilt (Li, 1998). The appropriate government bureaucrats then designate the developers to build on these spaces. Thus, the developers often develop housing on a large scale and construct taller buildings to maximize usable space on the tendered or auctioned land. This process also explains the importance specifiers placed on government policy in the question from the seminars. 50 Since the 1980s, when housing construction started to grow dramatically, the most popular building type has been the multi-family, multi-story, concrete apartments able to house large numbers of people. Since land has been owned by state, it is very difficult to find families who are building their own houses in urban areas. Urbanization is continuing at a rapid pace in the coastal urban centres and these centres are expected to be more crowded. This would drive residential buildings even higher and larger as one way to control urban sprawl and transportation gridlock. 6.3.4. STRUCTURAL MATERIALS Only engineers and developers were asked this question. Both engineers and developers indicated that concrete was the primary structural material in the buildings they specified (66.2% and 69.6%) (Figure 14). Steel followed and captured 18.6% of engineers' and 13.4% of developers' workloads with masonry and combined structures contributing only small shares. Wood was rarely used as a structural material and accounted for only 1.7% of engineers' workloads and 2.3% of developers' workloads. In different age groups, older engineers (41 years and older) specified concrete and wood more often than younger engineers who favoured steel (Table 22). Guangdong had a much higher proportion (80.8%) of buildings constructed with concrete as the prime structural material while only 12.7% of the buildings were built with steel. In Shanghai and Jiangsu, while concrete was still the number one structural material, they represented lower proportions than that in Guangdong (64.0% and 59.5%). These two regions used more steel and masonry as structural materials. 8 0 % 2 0 % 4 6 0 % 4 4 0 % 4 o% steel concrete wood masonry combination of above others • Engineer S Developer Figure 14 Workloads of Chinese engineers and developers by structural material 51 Table 22 Types of structural materials of buildings by respondent age and region Occupation Age/Region Steel % Concrete Wood % Masonry Combination % % of above % Engineer 21-30 22.9 62.4 1.9 8.9 3.9 31-40 17.2 66.7 1.0 12.1 3.0 >41 11.5 74.5 3.0 8.7 2.2 Engineer Shanghai 20.5 64.0 2.0 10.7 2.9 Jiangsu 19.8 59.5 1.9 13.6 5.3 Guangdong 12.7 80.8 0.9 3.7 1.9 Wood had a very small share of structural materials. Given the principal building heights in these cities and the small proportion of building 1-3 stories, the growth potential for wood as the main structural material is not very great. Wood may only be competitive for residential, luxury housing in suburbs which is currently in excess supply (Anonymous, 2004a). Another potential market segment for growth in the use of wood products is 4-6 story residential buildings. As previously mentioned, buildings in this height category have a large share in the housing market and are a good group to apply more wood applications, such as wood trusses, wall system, floor system, and interior partitions. Wood structure may also have a slim share in non-residential market for public buildings i f building codes technical issues are approved (O'Connor, etc., 2003 and 2004). Some wood structural components, such as wood trusses, may have potential to grow due to the emerging policy to adopt sloped roof systems in both new and existing buildings to prevent roof leakage. This market segment could be substantial, but wood roof trusses would have to compete with trusses made of other materials, especially steel, that are already approved in the building code. 6.4. CONTRIBUTIONS ON BUILDING MATERIAL SPECIFICATION Many groups of people make contributions to the decision-making processes of structural and non-structural building materials. Respondents were asked to estimate the contributions (by percent) of different groups of people assuming the total contribution was 100%. 52 6.4.1. CONTRIBUTIONS ON STRUCTURAL MATERIAL SPECIFICATION Architects believed that structural engineers had the greatest contribution to structural material specification (40.9%) followed by architects (26.1%). Builders and developers were considered to have less influence (about 15% each) (Figure 15). The responses of engineers were very similar to architects. While developers agreed that engineers contributed the most (40.2%) for structural material specification followed by architects (24.1%), they considered themselves to have almost as much contribution (22.6%) as architects. A l l groups considered home buyers and "others" to have little contributions on structural material specification. 50% 40% 30% 20% 10% o% architect engineer builder developer home buyer others E3 architect respondents • engineer respondents H developer respondents Figure 15 Contributions on structural material specification Further comparisons among opinions given by different specifier groups showed some differences among them (Table 23). Architects seemed to consider themselves to contribute to a greater degree on structural material specifications than the other two specifier groups did. Developers considered home buyers to have no contribution on structural material specifications, while architects and engineers thought home buyers' contribution has a small contribution. Table 23 Contributions on structural material specification by profession Profession of Contributions on structural material specification, % respondent Architect Engineer Builder Developer Home buyer Others Architect 26.6 40.6 14.1 15.8 1.5 1.4 Engineer 20.4 45.7 16.8 15.1 0.6 1.4 Developer 24.1 40.2 10.9 22.6 0.0 2.2 Average 23.6 42.3 14.4 17.5 0.7 1.7 53 As shown in Table 24, respondents in Jiangsu and Guangdong thought builders made a greater contribution on structural material specification than respondents in Shanghai did (22.4% and 29.4%, compared to 5.0% in Shanghai). On the other hand, Shanghai respondents considered developers to have more contribution (26.9%) on structural material specification than their counterparts in Jiangsu and Guangdong did (5.9% and 4.6%, respectively) (Table 24). Table 24 Contributions on structural material specification, by region Region of . Contributions on structural material specification, % respondent Architect Engineer Builder Developer Home buyer Others Shanghai 23.3 42.4 5.0 26.9 0.6 1.8 Jiangsu 23.8 44.8 22,4 5.9 0.4 2.7 Guangdong 23.2 41.1 29.4 4.6 1.8 0.0 Respondents from all regions agreed that home buyers and "other people" made little or no contribution to material specification (Table 24). Although all age groups considered that engineers had the greatest contribution on structural material specification (Table 25), the older architects (>41 years group) indicated that engineers had more contribution (48.7%) than the younger group did (34.6%). Younger architects considered that they had more contribution (28.1%) than their elder colleagues did (22.8%). A l l age groups of architects thought that builders and developers had similar contributions on structural material specification. Table 25 Contributions to structural material specification by age (%) Profession of respondent Contributions on structural material specification, % Age Architect Engineer Builder Developer Client/buyer Others 21-30 28.1 34.6 16.7 16.7 1.7 2.2 Architect 31-40 23.2 47.9 13.1 13.8 1.3 0.7 >41 22.8 48.7 14.1 12.8 1.2 0.3 21-30 23.9 45.5 14.6 13.2 0.8 2.0 Engineer 31-40 17.6 46.3 20.0 15.0 0.2 0.9 >41 21.1 46.4 14.3 17.0 0.0 1.1 54 6.4.2. CONTRIBUTIONS ON NON-STRUCTURAL MATERIAL SPECIFICATION When referring to non-structural material specification (Figure 16), architects considered that they made the greatest contribution (43.6%). They also considered builders and developers important (23.3% and 21.4% while engineers were considered to have little contribution on non-structural material specification. Engineer's responses reflected the same results. While developers agreed that architects were the most contributive people (46.3%) , they considered themselves as the second most important contributors (29.3%) followed by builders (13.9%) and then engineers (9.4%). They concurred with the other specifiers that homebuyers and "others" made little contributions on non-structural material specification. 6 0 % 5 0 % 4 0 % 3 0 % 2 0 % 1 0 % 0 % a r c h i t e c t e n g i n e e r b u i l d e r d e v e l o p e r h o m e b u y e r o t h e r s B a r c h i t e c t r e s p o n d e n t s • e n g i n e e r r e s p o n d e n t s • d e v e l o p e r r e s p o n d e n t s Figure 16 Contributions on non-structural material specification The comparisons among opinions given by different groups of specifiers (Table 26) showed that engineers had a higher opinion on their own contribution on non-structural material specification (13.9%) than architects and developers (9.3% and 9.4%). Developers had a lower opinion on the contribution of builders on non-structural material specification than architects and engineers did. Table 26 Contributions on non-structural material specification, by profession Profession of Contributions on non-structural material specification, % respondent Architect Engineer Builder Developer Home buyer Others Architect 43.3 9.3 22.5 22.3 1.1 1.5 Engineer 40.2 13.9 22.9 21.2 0.5 1.4 Developer 46.3 9.4 13.9 29.3 0.0 1.2 Average 43.3 10.8 20.3 20.3 0.5 1.3 55 Shanghai respondents gave slightly higher scores (45.0%) to architects for their contributions to non-structural material specification than those in Jiangsu and Guangdong (41.6% and 38.2%) (Table 27). Opinions about builders' and developers' contributions differed in the three regions. Shanghai respondents considered builders' contribution quite low (5.7%), while Jiangsu and Guangdong respondents considered them much higher (33.3% and 44.1%). Respondents in Shanghai considered developers' contribution higher (37.4%) than respondents in Jiangsu and Guangdong thought (7.4% and 6.0%, respectively). A l l respondents from three regions agreed that contributions from home buyers and "other people" were very small. Table 27 Contributions on non-structural material specification, by region (%) Region of Contributions on non-structural material specification, % respondent Architect Engineer Builder Developer Home buyer Others Shanghai 45.0 10.1 5.7 37.4 0.4 1.4 Jiangsu 41.6 14.6 33.3 7.4 0.4 2.7 Guangdong 38.2 10.5 44.1 6.0 1.2 0.0 6.5. KNOWLEDGE AND PERCEPTIONS OF WOOD MATERIAL Two questions explored the current knowledge levels of engineers and architects regarding structural and non-structural wood materials. The structural material question was for engineers while the question about non-structural materials was for architects. The questions used five-point scales to measure designers' knowledge about wood materials with 1 to 5 points standing for "not knowledgeable" to "very knowledgeable". There was a third question was a multi-choice question and respondents could indicate as many reasons as they thought were important concerning their perceptions of why wood materials were not used more in China. The percentage associated with each item represents the percentage of respondents who selected that particular item and not all items together total 100, since respondents could select more than one reason. 56 6.5.1. KNOWLEDGE OF STRUCTURAL WOOD MATERIALS Chinese engineers recognized that their general knowledge about structural wood products was very low. For most wood structural products, they indicated knowledge levels at less than 2.2 out of 5 (Figure 17). The majority of respondents had very little knowledge about engineered wood beams, oriented strand board (OSB), and wood floor trusses. Their greatest knowledge was about wood roof trusses, wood beams, timbers, and structural plywood, however, even these levels were indicative of very little knowledge about these building materials (<2.2 on the 5 point scale). A l l engineers, regardless of age or geographical location, recognized their lack of knowledge about wood structural materials. wood beams ~1 roof trusses : 1 timber s I structural plywood j dimension lumber I \ composite lumber I wood studs I OSB I floor trusses I engineered beams „ . I ; 1 2 3 4 5 1 to 5 = not knowledgeable to very knowledgeable Figure 17 Knowledge of Chinese engineers about wood structural materials 6.5.2. KNOWLEDGE OF NON-STRUCTURAL WOOD MATERIALS Although architects had a relatively higher level of knowledge regarding non-structural wood materials than the engineers. did concerning structural wood materials, their knowledge was still not very high (Figure 18). They knew most about solid wood (3.1 out of 5), decorative plywood (2.9), M D F (2.8), and particleboard (2.5). However, there was little knowledge about OSB (1.9). Similar to engineers, there were not much differences based on age or geography. 57 solid wood 1 decorative plywood M D F • particle board I O S B II 1 2 3 4 5 1 to 5 = not knowledgeable to very knowledgeable Figure 18 Knowledge of Chinese architects about wood non-structural materials 6.5.3. PERCEPTIONS OF AVOIDANCE OF WOOD MATERIAL USE IN CHINA The most frequently mentioned reasons for the avoidance of wood use in China by all three specifier groups were burning (74.7%) and rotting (74.2%) (Figure 19). These concerns were mentioned more frequently than costs (54.9%), the third most noted concern. A lack of wood acceptance, both by the developers (50.2%) and the marketplace (48.8%) followed costs. rots burns costly no acceptance by developers no acceptance by market not strong lack of knowledge limits height difficult for design * 1 | | 1 | 1 0 % 2 0 % 4 0 % 6 0 % 8 0 % Figure 19 Reasons of avoidance of more wood use of Chinese building specifiers Compared to architects and engineers, developers were most concerned about rotting, burning and cost of wood materials (Table 28) and less concerned about other technical properties such as strength and difficulty of design. Developers also worried that using wood would limit building height. 58 Table 28 Reasons of avoidance of more wood use in China by specifier group Reason % of architect respondents % of engineer respondents % of developer respondents Rots 74.2 73.6 76.3 Burns 76.5 63.5 82.5 More costly 50.8 46.5 67.5 Lack of acceptance by developers 47.7 52.8 50.0 Lack of acceptance of market 49.2 47.2 50.0 Not strong enough 37.1 38.6 30.0 Lack of knowledge of wood 35.6 30.2 20.0 Limiting building height 22.7 28.0 35.0 Difficult for design 18.2 27.0 13.8 Although rotting and burning were also the major concerns for architects and engineers, they were more concerned about technical issues such as strength, lack of knowledge and difficulty for design. Additionally, engineers mentioned concerns over burning less frequently than the other two groups. Architects mentioned lack of knowledge more frequently while engineers mentioned design difficulty. 6.6. IMPORTANT FACTORS FOR TRYING NEW MATERIALS This question was for architects and engineers since they are responsible for the technical assessment of new materials and products. It used a five point scale ranging from 1 to 5 standing for "not important" to "very important". Designers (both architects and engineers) considered all five factors either important or very important (4.0 - 4.8 out of 5) for trying new material (Figure 20). Both groups of designers considered material performance as the most important factor (4.8). Architects considered material cost.the least important factor. However, it was still considered quite important (4.2). The least important factor for engineers was construction considerations (4.0). 59 m a t e r i a l cost m a t e r i a l des ign c o n s t r u c t use p e r f o r m a n c e cons idera t ions cons idera t ions c o n s i d e r a t i o n s | • A r c h i t e c t H E n g i n e e r | Figure 20 Important factors for trying new materials Although wood is the oldest building material in human history, it is currently a new type of building materials for modern construction in China, particularly compared to concrete, steel, and masonry. In promotional campaign for wood products targeted towards architects and engineers, all five factors must be addressed with additional emphasis placed on material performance of wood. 6.7. IMFORMATION SOURCES For this question, respondents could check as many information sources as they were thought important. The percentage associated with each item represents the percentage of respondents who selected that particular item and percentages of all items do not add up to 100. For all specifiers, each of the information channels was used by more than 18.0% of the respondents (Figure 21). Technical reading materials (61.9%) and corporate promotional materials (54.0%) were the most widely used information sources and the only two methods mentioned by over 50% of respondents. Other channels, such as manual, codes & standards, association promotional materials, computerized information, and physical product examples were also mentioned by between 29-33% of respondents. Most architects and engineers obtained information from technical reading materials (63.1% and 67.5%) and corporate promotional materials (50.0% and 49.4%) (Table 29). The other information sources were mentioned less frequently by these two groups. Compared to engineers, architects preferred information from physical product examples (30.8% for architects and 12.5% for engineers) and word of mouth 60 (23.8% for architects and 16.3% for engineers). On the other hand, engineers preferred information from codes and standards (41.9% for engineers and 27.7% for architects) and seminars and courses (25.6% for engineers and 14.6% for architects). technical reading materials corporate promotion materials manuals, codes & standards association promotion materials computerized information physical examples personal sales representatives word of mouth trade reading materials seminars & courses 0% 20% 40% 60% 80% Figure 21 Information sources of Chinese building specifiers about new building materials Developers used corporate promotional materials (62.5%) more than technical reading materials (55.0%) as their information source. They noted association promotional materials (46.3%), physical product examples (45.0%), and trade reading materials (26.3%) more frequently than engineers and architects. They listened to word of mouth (31.3%) more than designers (Table 29). Table 29 Information sources of new materials/technologies Sources % of architect respondents % of engineer respondents % of developer respondents Technical reading material 63.1 67.5 55.0 Corporate promotional materials 50.0 49.4 62.5 Manuals, codes & standards 27.7 41.9 38.8 Association promotional materials 25.4 31.3 46.3 Computerized information 31.5 29.4 35.0 Physical product examples 30.8 12.5 45.0 Personal sales representatives 30.8 28.1 16.3 Word of mouth 23.8 16.3 31.3 Trade reading materials 17.7 13.1 26.3 Seminars & courses 14.6 25.6 13.8 61 6.8. IMPACTS OF GOVERNMENT POLICY AND INTERIOR ENVIRONMENT The two questions about impacts of government policy and interior environmental quality on building material specification were in questionnaires completed at the Shanghai and Beijing seminar. They used a four-point scale to measure respondent's attitudes: 1. definitely influential/very important; 2. probably influential/fairly important; 3. probably not influential/not so important; and 4. definitely not influential/not at all important. 6.8.1. INFLUENCE OF GOVERNMENT POLICY A l l building designers indicated that governments have a strong influence on building development, design and material specification regardless of profession or geographical location (Table 30). Table 30 Influence of government policy on material specification Region Architects Engineers Other Average Shanghai 1.2 1.2 1.4 1.3 Beijing 1.3 1.2 1.1 1.2 China has long been a centralized country and the general populace has little impact on political and economic affairs in its social and power structures. This country started its efforts to transform from planned economy to a market economy only two and a half decades ago. While the economy has been liberalized, other political and social aspects have not. Corporations, businessmen and designers believed that governments are still very influential in construction markets. They must be targeted in any promotional campaign, but by using very different methods. Additional research could uncover the best message and medium for promotion to influential government employees. 6.8.2. IMPORTANCE OF INTERIOR ENVIRONMENT QUALITY Architects and engineers in Shanghai and Beijing thought that interior environment quality was either very or fairly important (1.3 and 2.0) (Table 31). They expected its importance to grow slightly in the future (1.3 and 1.7). There were little differences between architects and engineers in the same region. 62 However, designers from Beijing indicated more importance to environmental quality than those from Shanghai. Table 31 Importance of interior environmental quality in material specification Region Present Future Architects Engineers Other . Average Architects Engineers Other Average Shanghai 1.8 2.2 1.9 2.0 1.7 1.7 1.8 1.7 Beijing 1.2 1.4 1.2 1.3 1.3 • 1.2 1.2 1.3 In developed countries, interior environmental quality is growing in importance in residential design and construction. China is facing general environmental degradation associated with a rapidly expanding economy (Anonymous, 2004b). In the past decade, there has been increased interest in energy efficiency, interior air quality, light, and noise control. While Chinese designers indicated their concern about interior environmental quality, it is still doubtful whether these concerns would affect design and construction that are under financial and other pressures. Nevertheless, this result sent a message that the advantages of wood products for better interior environmental qualities should be used in market promotion campaigns. 6.9. CHALLENGES FOR DOING MARKETING SURVEY IN CHINA During this, and other projects, the author had the opportunity to contact Chinese universities, government agencies, research institutes, and companies in the construction and forestry sectors. In terms of marketing research, China is very different from other industrialized countries such as Canada. There are many additional challenges because China is still transitioning to a market oriented economy. Other challenges arise due to social, structural and cultural reasons. If these. challenges are not addressed properly, they can create substantial hurdles to the research processes and compromise the reliability of the results. Some of the major challenges are as follows: • There is little intellectual infrastructure for market research. In the construction and forestry sectors, there are no universities, research institutes or government agencies working in the marketing area. 63 Therefore, it is not possible to find experienced co-operators in China to do marketing studies in the emerging wood and construction industry. • Chinese governments does not provide much reliable information and officials are often reluctant to release information. What data is available from governmental departments is often questionable in terms of accuracy. Since the governments are gradually losing their control, especially on small and private companies, their data and statistics are often incomplete. They often only include SOEs (or former SOEs) and enterprises above certain sizes. • Industrial associations in China are newly formed and often not as functional as in industrialized countries. They are usually loose organizations used as tools to transfer instructions and information from government to industry. They do not have the capacity to provide many of the data collection and dissemination services provided by associations in developed countries. Although their connections in the industry can be helpful and they may be able to collect some general information, they usually do not have the capacity to carry out market studies. • It is difficult to obtain reliable and complete lists for marketing surveys in China. Nevertheless, relevant governmental branches, associations, research institutes, and universities are still the first places to try. In many cases, information can only be obtained by using connections (guanxi). • Chinese society is changing quickly. Companies form and close rapidly and it is crucial to get the latest lists for a survey. Even so, there will be some small family producers unregistered in any list. • The lack of market research expertise creates many potential problems for marketing studies in China. When your co-operator is not a person working in marketing, it is advisable that you should manage and control as much of the process as possible on the ground in China. Otherwise, the co-operator will work in the manner most comfortable to their own discipline, which may not be suitable for market research in most cases. For example, there are numerous internet surveys in China yet only 6.8% of the Chinese population has internet usage (Internet World Stats, 2004). • There is no tradition for social and marketing surveys. Surveys are foreign to the population and there is a resistance to participate, and i f they do participate, there is a resistance to answer all the 64 questions. Since information is valuable many potential respondents will not voluntarily part with this information without adequate financial compensation. • Due to cultural reasons, it is easier to make people take part in the survey i f the survey is carried out by a person or institution they know or have connections with. However, by doing so, be aware of that there is a loss of randomness of the sample selection and results may not reflect the population under study. • Your Chinese co-operators may have the inclination to investigate larger companies and institutions. They usually think those firms' opinions might be more important. • The Chinese do not like to say no in front of you. In some cases, this could be a serious problem when the questions in the questionnaires are not appropriately designed. • When doing personal interviews or telephone surveys in different regions in China, be aware of the possible problems of local dialects. 65 7. DISCUSSION AND CONCLUSION 7.1. CONTRIBUTIONS ON MATERIAL SPECIFICATION (Objective 2) 7.1.1. STRUCTURAL MATERIAL SPECIFICATION In term of structural material specifications, there was consensus that structural engineers made the greatest contribution, followed by architects, builders and developers (Figure 15 and Table 23). Home buyers and "other" people had minor contributions on specification. This indicates that engineers are the key specifier groups for promotional campaigns. Respondents from different regions had different opinions about builder and developer's contribution on structural material specification. Respondents in Jiangsu and Guangdong thought that builders had a greater contribution (22.4% and 29.4%, respectively) while those in Shanghai respondents thought developers to had made a greater contribution (26.9%) (Table 24). No relevant research reports were found which can explain these regional differences but this may be an important regional consideration in identifying key target segments for future educational and promotional campaigns. Elder architects (>41 years group) seemed more modest and indicated that engineers had more contribution (48.7%) than the younger group did (34.6%) (Table 25). Younger architects were more confident and considered themselves to contribute more (28.1%) compared to their elder colleagues (22.8%). 7.1.2. NON-STRUCTURAL MATERIAL SPECIFICATION For non-structural material specifications, all specifier groups agreed that architects contributed the most with developers and builders sharing second and third rankings (Figure 16 and Table 26). Architects turned out to be the most important specifiers for marketing strategies to target for non-structural materials. 66 Shanghai respondents thought developers made greater contribution than respondents from Jiangsu and Guangdong (Table 27). Respondents from Guangdong considered that builders made a greater contribution that architects (44.1% compared to 38.2%). Chinese developers are a special group of specifiers. They take part in the whole process of building development, from project planning, building design, construction, to sales. Consequently, they have an influence, from the beginning during the planning and design, to construction and finally to sales. They decide, to a great degree, the types of building during the planning stage which is often a predetermined structure and type of building based on government input. During the design period, they can make a substantial contribution to decision made by architects and engineers for they are the owners of the projects. During the construction period, they have great influence on the builders and the selection of material providers and product brands. They also directly contact consumers or sales agencies and have a substantial impact on them. They are the specifiers who can get direct market feedback from consumers and/or sales agencies back to builders and designers. Their involvement in each step of construction process gives them a special position in the construction industry in China. Shanghai respondents emphasize developers' substantial contribution more than Jiangsu and Guangdong respondents. This may be due to different roles of developers in different regions or the difference in the maturity of the construction industry in each region. In North America, builders seem more active in the construction market. They take part in a larger range of business than Chinese builders do. Sometimes, they have double identities as both builders and developers e.g. Pulte Homes. In China, builders are not usually involved in design activities although they might have the right to select material suppliers, but it is often for materials specified by others. There was a consensus that home buyers had little contribution on building material specification. It is true that consumers usually have very little contribution on product design and specification for commodity products. In a country like China, where the majority of the houses in the markets are similar commodity apartments and are designed and built prior for sale, it is understandable that people think that home buyers have little contribution on design and specification. 67 However, this attitude cannot be transferred to luxury and specialty houses that must appeal to upscale consumers. Single houses, townhouses and low apartments (<4 stories) are high-end specialized houses in China. They are often the type of house that is most suitable for the direct transfer of western construction techniques and systems. Consumers are likely to have some influences on design and specification for these higher end housing, even i f indirectly. A rather interesting fact is that when referring to themselves, each group of specifiers tended to inflate their contribution on both structural and non-structural material specification. 7.2. K N O W L E D G E AND PERCEPTIONS O F W O O D M A T E R I A L S (Objective 1) As expected, there was little knowledge about wood products in China among all three specifier groups: architects, structural engineers, and developers. They have little experience with modern wood buildings and wood applications, especially for structural purposes. However, it is important to be aware of specifiers' perceptions, even though they may not be based on science or accurate. These perceptions exert strong influence on people's judgements and choices. Uncovering people's perceptions identify what educational programs must target to create a positive and informed opinion about wood products. 7.2.1. KNOWLEDGE OF STRUCTURAL WOOD MATERIALS Chinese engineers admitted that their general knowledge about wood products was very low (less than 2.2 in 5 point scale) (Figure 17). The majority of respondents had almost no knowledge about engineered wood beams, oriented strand board (OSB), and wood floor trusses. A l l engineers recognized their lack of knowledge about wood structural materials indicating a good learning environment for the right set of educational programs. 7.2.2. KNOWLEDGE OF NON-STRUCTURAL WOOD MATERIALS Chinese architects had a relatively higher level of knowledge about non-structural wood materials than the engineers did concerning structural wood materials (Figure 18). They knew about solid wood (3.1), decorative plywood (2.9), M D F (2.8) and particleboard (2.5), but little about OSB. 68 Generally, Chinese designers had a poor knowledge about wood building materials, although better regarding non-structural wood products. This is understandable since wood is rarely used as structural components in building, while non-structural wood materials are widely used in interior decoration, finishing, and other applications. This is an important message for Canadian wood products manufacturers and exporters with the existing focus on structural applications. Familiarity and basic knowledge about wood as a structural material is essential for the acceptance and applications of these materials. Promotion needs to focus on education to increase the knowledge of wood materials among Chinese specifiers, particularly for structural materials. In the literature review, the survey, and discussion in China, it is clear that there is almost no instruction of wood materials and wood constructions in China's architectural and engineering schools. Therefore, most of the knowledge and experience are learned on the job, where wood is rarely used. It is very important to persuade and assist the Chinese schools to set up courses about wood materials, design, and construction for their students. College education might be one of the best ways to foster a wood culture -a prerequisite to increased wood use in construction. 7.2.3. P E R C E P T I O N S A B O U T W O O D It is not surprising that burning and rotting were the most frequently mentioned reasons for the avoidance of wood use in China by all three specifier groups (Figure 19). Southeast China has long suffered from termite damage and fungi decay of wood products partly due to its monsoonal climate which has a hot and humid summer—ideal conditions for fungi. In China, most wood materials used in construction and furniture were naturally dried and untreated. The Chinese people have a long memory of rot and decay of wood products. National regulations require compulsory technical treatments for wood material in this region (MOCC, 1999d). Great attention must be paid to this problem when introducing wood houses and other wood building components into southern China since failures of initial wood house offerings could have serious detrimental impact on the long term transfer of wood housing to China. There is also a history of fire disasters in China, where most cities are very crowded and safety equipment and fire rescue services are generally not sufficient. There is no a system to provide help to families 69 suffering from disasters such as fire. Thus the population in southern China have great fear regarding fires in an urban setting. Strong and convincing evidence must be provided to Chinese developers and designers, that they in turn can pass on to consumers, to diminish their doubts and suspicions. In addition, the industry must ensure that wood houses and other wood applications are constructed to ensure adequate fire protection. It is fortunate that these two are the most prevalent concerns since existing technologies and design can alleviate most potential problems. Because wood housing and the use of wood as a structural material is so new to China, they are unaware of the solutions. Since results indicate that almost all designers and builders are concerned about these two issues, the industry sector needs to make available information, in Chinese, about how wood can be used without increasing rot or fire problems. After costs (the third most noted concern), the next two most important reasons to avoid wood user were a lack of wood acceptance by the developers and the marketplace. Clearly, work needs to encourage acceptance and mitigate their negative impressions of wood as a structural material. Currently, the most suitable approach may be to encourage the structural use of wood in selective parts of concrete construction while at the same time of promoting complete wood structures. For example, the use of wood could be promoted for roof trusses, engineered beams, interior wall partitions, and other suitable structural components. It was a common point, for all three groups, that design difficulty was the least important factor in avoidance of wood use. Specifiers indicated that i f there were a demand, difficulties in design would not be a problem. Therefore, developers are the group of specifiers to target in order to increase market demand for wood products. Excluding rot and fire problems, which are technically solvable, cost and acceptance by developers and marketplace were the next three major concerns. It will be a long and slow process to develop a construction culture more accepting of wood as a structural material. The negative impression by consumers is a much larger issue. However, given consumers' lack of contribution in selecting structural material, developers are a much more accessible and influential group to target for educational and promotional campaigns. 70 7.3. INFORMATION SOURCES (Objective 3) Result revealed that technical reading and corporate promotional materials were the most widely used information sources (Figure 21). For architects and engineers technical reading materials are the most efficient channel while corporate promotional materials are more effective for developers. This suggests that i f developers are to be targeted (Section 7.4) than promotion by individual companies may be the most effective means to encourage the adoption of wood in construction. Architects seemed to prefer sources of information from visible and audible sources (Table 29), such as physical product examples (30.8% for architects and 12.5% for engineers) and word of mouth (23.8% for architects and 16.3% for engineers). Engineers tended to prefer formal technical information, such as manuals, codes and standards (41.9% for engineers and 27.7% for architects), and seminars and courses (25.6%) for engineers and 14.6% for architects). Testimonials from well-known architects and samples would be most suitable for architects to promote wood use. Fir engineers, seminars and manuals would be more effective. Developers acquired information from much broader sources. In addition to technical reading materials and corporate promotional materials, they preferred business materials as information sources more frequently than architects and engineers. This indicates a role for associations since developers noted association promotional materials (46.3%), and physical product examples (45.0%) almost half the time. They also listened more to word of mouth (31.3%) than designers. This suggests that corporate, association, and trade materials should be targeted towards developers stressing the factors important to them. 7.4. RECOMMENDATIONS FOR DOING MARKETING SURVEY IN CHINA (Objective 4) It is no easy task to carry out a market study in a new market environment like China. This is exacerbated since Chinese investigators are unfamiliar with principles of market research and the subjects are reluctant to release information. Sometimes, you have to compromise accuracy and ability of inferring to 71 the population in order to complete a survey in a timely and cost effective manner. Based on the author's experience, the following suggestions may minimize the frustrations of doing marketing surveys in China: • When you discuss a market survey with your Chinese co-operators, it is important to tell them the exact requirements and difficulties in carrying out the survey, especially i f your partners are not marketing experts. This might result in a higher price, but it is much better than getting unsatisfactory results. Chinese people do not ask many questions. Full and clear communication is extremely important. If the Chinese partner offers too low a price for your project, it very possible that there is some miscommunication on the requirements of the project. • There is no easy way to get reliable and complete lists for your survey in China. Governmental departments of relevant industries, associations, business registration agencies, qualification registration agencies, yellow pages, etc., are some of the places you can try. Be ready to pay for the lists. However, there is no established or standard means or pricing for information products in China. • If your partners are not marketing experts, it is recommended that you sample from the lists (sample frame) by yourself according to your requirements and only provide the sample information to them. Alternatively, both parties could sample together. • It will be better i f the survey is carried out in the names of well-recognized Chinese institutions such as industry associations, universities and research institutes. These names could improve response rates. • If the questionnaire is not drafted in Chinese, it is important to have a good translation so that Chinese readers can understand the intent and not just the words. Proofreading by Chinese with expertise in the topic area of the survey is recommended. • If you intend to investigate someone in a firm, you have to target the exact person at a specific position, not just talk to the leader. If the leader is not your prime target try to talk to your target person alone. When a leader is present, he/she often dominates the interview. If he/she provides 72 inaccurate information, the underling will not correct him/her or provide alternative information in most cases. • To avoid the bias caused by the fact that Chinese do not like to say no in front of interviewers, it is important be very careful in the of design the survey questions. It is recommended to ask questions from the third party's point of view, especially in personal interview surveys. • Make a clear and detailed plan with your partner for the survey. Include details such as cover letters used at different times, timing of follow-up letters, recording of response times, data editing, etc. • Set some time points during the period of the survey to check the situations and discuss with your partners to solve problems. If you can't monitor throughout the survey time, it is a good idea to stay with your partners and start the survey together, and then maintain regular contact throughout the survey time. If these suggestions are followed, the quality of collected data would be improved. However, before the people and enterprises get used to the market system and physical and intellectual frameworks are established, data collection for marketing research and other social studies remain highly challenging in China. 7.5. RECOMMENDATIONS FOR FUTURE RESEARCH Based on the challenges and findings from this study, it is found that there are some topics that require further investigation to better understand material specification process in China These areas of future research are discussed below. • Although the role of consumers, i.e. house buyers, in material specification was thought to be minimal by the respondents in this survey, it is believed that their role in material selection in construction will change as the housing market matures. Once their basic housing requirements have been satisfied, they may exert a greater influence in material selection. This requires investigation. • The results in this study showed that government policy is very influential on the construction market. Nevertheless, we do not know much about these influences and how governmental policies, 73 and their implementation by bureaucrats, affect the construction market. It would be strategically helpful to know that how government influences the construction industry. 74 8. SUMMARY This research provided preliminary information about Chinese specifiers' knowledge and perceptions about wood materials and helped to identify the right type of information, the most efficient channels of communication and the best target groups for educational and marketing campaigns for wood building products. It also uncovered many of the problems associated with conducting market research in China. A sample consisting of 800 building specifiers (architects, structural engineers, and developers) was investigated with a mail survey in Shanghai Municipality, Jiangsu and Guangdong Provinces, China. Complementary to the principal survey, some data from a small survey conducted during seminars held in Shanghai and Beijing were also reported in this report. In contemporary China, concrete and steel were the primary structural materials and wood applications in construction, especially as structural components, were very rare. Chinese building specifiers had little knowledge and experience about most of wood building materials, especially advanced structural products and engineered products. It is essential to take a long-term approach to develop a wood culture based on knowledge and increasing familiarity with wood products to develop this market. Chinese engineers made the greatest contribution to structural material specification and architects did so for non-structural materials. Developers and builders also have substantial impacts on material specifications. Respondents from Shanghai considered developers to make a greater contribution than builders on specification, whereas those from Jiangsu and Guangdong considered builders to more influential. Burning and rotting were the specifiers' major concerns about wood product applications. Costs and lack of acceptance by both the developers and the market were the other major constraints. Most of the designers believed that government policies have strong contribution on construction market and material specification. The awareness of the importance of interior environment quality is increasing. Efficient educational and marketing campaigns to promote wood product applications should address those concerns and factors. 75 Technical reading and corporate promotional materials were the most important information sources used over 50% of respondents. In addition, visible and audible tools, such as physical product examples and word of mouth were effective in communicating with architects. Engineers preferred more formal technical information; e.g. manuals, codes and standards, seminars and courses. Business materials such as association promotional materials, physical product examples, and trade reading materials were used more by developers. China is still in its transition from a planned economy to a market oriented economy and there has been little tradition and infrastructure for marketing research. It is difficult to carry out a market study in China where Chinese investigators are often unfamiliar with the principles of market research and the subjects are reluctant to release information. Lack of familiarity with social surveys, combined with other social and cultural reasons, may cause substantial challenges for implementing market research in the wood and construction industries. To help improve future market studies in China, some suggestions were given based on the author's experience in his work in China, These include full and clear communication with the Chinese partners, attaining accurate lists, using appropriate sampling methods, careful and culturally appropriate instrument design, proper monitoring of surveys, etc. These suggestions will not only improve the quality of results but should minimize the frustrations of doing marketing surveys in China. Even so, sometimes investigators will still have to make compromises in order to complete a survey. 76 9. NOTES 9.1. NOTE 1, MEASUREING UNITS FOR HOUSING SPACE There are at least three measuring units used in statistics and reports about China's housing condition: living space or habitable space (ft^Jiij'fj: fflfR), building space (ft^^^tMlR), and usable space (ft^E 'fjJffiffl^ R) (MOCC, 2003). In many reports, these concepts have been misused leading to confusing results. The most widely used term is "living space" or "habitable space" which refers to the total space of living rooms and bedrooms in a suite. This term started being used in the late 1970s. At that time, most Chinese residential buildings had shared public toilets and kitchens. This term is now obsolete because every apartment for sale is equipped with their own private toilets and kitchens. Living space, since it excludes toilets and kitchens, underestimates total area and is unsuitable to reflect current housing conditions (Anonymous, 2001c). "Building space" is roughly equivalent to floor space and refers to the total space included in a suite from its exterior walls. It also includes a proportion of the shared public areas. This term is most often used in house sales, construction statistics and market statistics. Many authors prefer this term because of its consistence with macro statistics, especially in reports about the construction market. The last unit is "usable space" which has been used in recent years. It refers to the total usable space in a suite including bedrooms, living rooms, bath rooms, kitchen, storage rooms, corridors, balconies, etc., except for the space occupied by walls, partitions and posts (MOCC, 2003). It was developed as a better descriptor of housing space in terms of what can be used by the inhabitants. The terms of "building space" and "usable space" were suggested to substitute for "living space". Some statistical authorities have already made the substitution e.g. China's Statistical Yearbook and Yearbook of Jiangsu Province since 2003. Nevertheless, some authors are still using the term "living space" which is the most common term in older statistics. The conversion factors for these units are as follows: 77 Living space = 50 ~ 55% of building space, Usable space = 70 ~ 75% of building space (Anonymous, 2001c). 9.2. N O T E 2, C H I N E S E S T A T I S T I C S The accuracy and reliability of Chinese statistics have long been questioned and it is believed that falsification is a common problem in China's statistics. A typical and ironic example happened to the late Prime Minister Zhu Rongji, who was famous for his hatred of cheating, as well as for his strict and frank altitude toward falsification. On May 22, 1998, he came to Nanling County, Anhui Province, his hometown, to inspect the enforcement of the policy that required the state owned crop trade companies to buy crops from farmers at protected prices. The warehouse he was scheduled to visit did not buy any crops and was empty. In the four days prior to his visit, local officials used more than 200 workers, day and night, to transfer crops from other warehouses to fill this one. When Zhu arrived on May 22 and happily praised that the local leaders and employees of the warehouse for doing a good job, he didn't realized that even the employees he shook hands with were all substitutes (maybe just to prevent the real employees could possibly tell the truth) (Chen Guili and Chuntao, 2003). It is generally accepted that local statistics are less reliable and have been "diluted with water". Statistics from the central government may be more reliable, but are still questionable, since they often come from summarizing local statistics. The Chinese government has been striving to improve its data collecting system and in 2002 China joined GDDS (General Data Dissemination System) of IMF (International Monetary Funds). It is believed that the quality of Chinese statistics is getting better each year. 9.3. N O T E 3, E X C H A N G E R A T E O F R M B RMB (Ren Min Bi, people's currency) is not a freely convertible currency. Before 1980, the RMB was fixed at an exchange rate of 1.53RMB/SUS by The People's Bank, the central bank of China. Starting at in 1980, China had a dual exchange rate system. The official rate was kept at 1.53RMB/$US. There were two more rates, one called the "internal settlement rate", at 2.80RMB/SUS and another called the "coordination rate" which fluctuated around the internal settlement rate. In 1985, the People's Bank 78 adjusted the official rate to 2.80RMB/$US and abolished the "internal trade rate", but the "coordination rate" was still kept. Since then, the people's Bank has devalued the RMB several times. The RMB was also allowed to fluctuate in a larger range in the "coordination market". In 1994 when the RMB had been devalued to 8.70RMB/$US, China discarded the dual rate system and adopted a single rate system. Now the RMB is partially convertible under the current account (since 1996), and is pegged to the US dollar. It fluctuates in a small range controlled by the People's Bank of China (Yang F., 2000; Yang and Leatheam, 2001). In recent years, the exchange rate to $US has been around 8.3RMB/$US. 9.4. NOTE 4, SPECIAL ECONOMIC ZONE When China started to implement economic reforms and started to open its door to the world in the late 1970s, it lacked experience in international trade and an appropriate legislative framework. A few regions were designated as special economic zones which had preferential economic policies and regulations. They were both windows of China to the outside world and trial plots to test new policies to avoid unexpected impacts to the whole nation. In 1979, three cities in Guangdong and one city in Fujian, provinces close to Hong Kong and Taiwan and homeland to many overseas Chinese migrants, were set up as special economic zones. Hainan Province, once part of Guangdong, was added as a special economic zone in 1988 (Wikipedia, 2004). Preferential policies, large amounts of foreign investment, and technical and intellectual resources accompanying increased investment and trade helped these regions developed at an unprecedented speed. This gave them advantageous positions in the domestic economy, compared with other regions. Once China joined the WTO in 2001, these "special" economic policies were implemented nationally. 9.5. NOTE 5, HUKOU - HOUSEHOLD REGISTRATION IN CHINA In 1958, China adopted the "Regulations on Household Registration, P. R. China" and stipulated that all citizens must be registered by household (PRC, 1958). A famine started in 1960, caused by the "Great Leap Forward" of 1958, that produced serious pressures on food supply in urban areas. Households were divided into two types: agricultural and non-agricultural households. Those who lived in non-agricultural 79 households could get food from the government's supply quota. The agriculture households could only get food from farming. Moreover, people were restricted from migrating from rural areas into urban areas in 1964 by the regulations issued by the Ministry of Public Security (MPSC, 1964). Since then, Hukou (household registration) has been used as the gateway for migration, food supply, education, employment, and social benefits. China's Constitution was amended in 1975 to delete the freedom of mobility. Since late 1978, rapid economic growth and diversification in urban areas has triggered increasing demand for labour. From the mid 1980s, peasants have been allowed to work in certain industries, such as construction industry and private enterprises, without changing their household registrations (SCC, 1984). In the 1990s, some cities issued "temporary household" permits that were designed to attract people they needed. The household registration policy was partially deregulated in the late 1990s (Anonymous, 2002). There were increased quotas and easier procedures for family reunification and migration into small towns. Nevertheless, the household registration system is not abolished, and people who live in a city without local household registration usually do not have accesses, or at. least do not have equal accesses, to health care, education, jobs in the government sectors and SOEs, and many other social benefits. 9.6. N O T E 6, F L O A T I N G POPULATIONS Floating population refers to the population working and living in a place where they do not have official household registration. While floating populations mostly refers to "peasant workers" who are working in towns and cities, it also includes people moving among towns and cities without local household registrations. An estimated 94 million rural labours came into urban areas to find jobs in 2002, and more than 100 million in 2003 (Anonymous, 2003). Eastern cities and provinces are the major destinations for these labourers. Since the floating population works and lives in urban areas most of the time in a given year, some argue that they should be counted as part of the urban population. Therefore, the Chinese urbanization rate should be higher than the published figure which is based on household registration (Bai, 2003). Some 80 also predict that the floating population will help to propel the real estate market in urban regions (Bao, 2001). Nevertheless, the pitfall of these projections is that the floating population is still constrained by the household registration system and is not treated equally in many aspects of daily life. These barriers have prevented them from completely entering urban society. Instead, many leave their spouses and children at home villages and build their houses in their home villages. In some ways, it is true that they are a population in the cities. 9.7. N O T E 7, E D U C A T I O N G A P D U E T O T H E G R E A T C U L T U R A L R E V O L U T I O N The Great Cultural Revolution started in 1966. Students, especially those in high schools and colleges, were very much involved in this furious, long-lasting, national-wide political movement (Ministry of Education, 2004). Enrolment fell dramatically at colleges and schools since they were required to enrol students based on their politics instead of their academic record. Irregular and incomplete education, doubled with improperly screened entrants resulted in very few competent graduates. China restored its education system in 1977, and schools and colleges started to screen students by academic achievement. The first college graduates that received a regular University education graduated in 1981, resulting in an educational gap of 15 years. 81 10.REFERENCES Anonymous. 1997. Analysis on Real Estate Development and Construction, 1996 (in Chinese). 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Please estimate the proportions of different building areas in total buildings that you have designed in the past 3 years. Building area: Uless than 5,000 ml • :• - • • ' •"•''•"A % ~ ~ 5,000-20,000 n r % : 20,000-80,000 m 2 % more than 80,000 m 2 % • Total 100% 4. Please list the ways in which information about new building products/systems can be Information sources technical reading materials • trade reading material*. _PQiuifH manuals. codcs> and standards • corporate promotional materials association promotional materials lllljillllll personal sales rep*. physical examples • seminars and emiise*. l M | p i f l p i word of mouth • computerized information • • others (please specify) • 92 5. In your experience, how much does each of the following parties contribute to the decision about structural materials in building designs? architects % structural engineers : % developers - " ' — u r f i ^ ~JS&—? - % building contractors "» others (please specify) % ' * 100% 6. In your experience, how much does each of the following parties contribute to the decision about non-structural materials in building designs? architects % structural engineers % developers ( "o building contractors \ % others (please specify) % 100"o 7. If you are trying new building materials, how important are the following considerations in decision making process? Factor Importance Very Important Impi • rtant Not important .; i : design considerations (e.g.; design time/complexity) 1 2 3 4 . 5 material performance (e.^ .. sliengih. longe\ nv & llie) 1 2 3 4 5 material costs 1 2 3 4' 5 construction consideiaiion.si(e*g<. insinuation <k c o s t ) | 2 3 4 5 use considerations (e.g., light,"sound & thermal) 1 2 3 4 5 Do you feel you are knowledgeable with the following non-structural wood products? Type of Wood Products Very knowledgeable Knowledgeable Not knowledgeable i l c c o r u l i N c pKuood 1 2 3 4 5 medium ileiisitv libcrboard ( M D D • * 1 2 3 4 5 particle board 1 2 3 4 5 OSB (Oriented Strand Hoard) 1 2 3 4 5 solid wood ' 1 2 3 4 5 9. What do you think are the most important reasons explaining why wood is not commonly used as structural material in China (check all that apply). Reason using wood limits building height yt 'strength is insufficient it is costly it burns It rots it is difficult to design with lack of knowledge/ experience with wood material ; lack of acceptance from building developer lack of acceptance from market J • • • J • • • • 93 10. Which roof systems have you designed for multi-family housing in the past 3 years? Reinforced concrete roofs • Prefab concrete roofs • Light gauge steel truss roofs Wood truss roofs Others (please specify) • 11. In your opinion, when comparing wood truss roofs to steel roofs, what are the advantages of wood truss? strength is higher • durability is better • fire safety is better • iin re environmentally friendly • 12. What is your gender? in.ilc • female • 13. What is your age? 21 -30 years a 31 -40 years " • 41-50 \cars 51-60 years >60 Years 14. Which of the following best describes your educational background in the field of design? Check all that apply. technical/trade school • college • university (undergraduate) LI-university (Master Degree) LT-university (Doctoral Degree) • other (j)lcasc specify) • 15. What design qualification class (or level) are you holding: Level A registered architect • Level D registered architect Q 16. How many years have you been a practicing architect? years 94 Thank you for your time and cooperation in completing this survey. Your participation is greatly appreciated. If you would like a summary of the research results of this survey, please leave your name and address below and it will be sent to you upon completion. Yes • No • [OPTrOXALJ: Company Name: Respondent Name: Address: Zip code: limail: 95 11.2. APPENDIX II: QUESTIONNAIRE FOR STRUCTURAL ENGINEERS 1. Estimate what proportions of the buildings that you have designed in the past 3 years have used the following as primary structural components? Steel concrete % Wood % masonry °,> a combination of the above (please specify) % Total " 100% 2. Please estimate the proportion of each type in the total number of buildings that you have designed in the past 3 years. J End use: _ residential % commercial • "-• "" : ~ : % ": industrial (manufacture, warehouses, etc.) % institutional (governments, schools, hospitals, etc.)- '> ; % others (please specify) % llTotal '"^f^ "^t h " r '100% 1 3. Please estimate the proportions of different building heights in total buildings that you have designed in the past 3 years. Building height: 1~3 storeys % 4-6 storc>s % '7~2CJ,storeys ~% i more than 20 storeys % Total ' 100% . 4. Please estimate the proportions of different building areas in total buildings that you have designed in the past 3 years. Building area: less than 5,000 m z :h'< % 5,000-20,000 m 2 % 2 0 f 0 £ 0 ~ 8 0 , 0 0 0 j n 2 - *?/' . - S . / . V " ' more than 80,000 m 2 % Total 100%' 96 5. Please list the ways in which information about new building products/systems can be obtained on the job. Information sources: technical reading materials • trade reading materials • manuals, codes and standards • corporate promotional materials • association promotional materials • personal sales reps • physical examples • seminars and courses • word of mouth • computerized information • others (please specify) • _ 6. In your experience, how much does each of the following parties contribute to the decision about structural materials in building designs? ; architects % structural engineers % developers % building contractors ., % ! others-{please specify) % 100% 7. In your experience, how much does each of the following parties contribute to the decision about non-structural materials in building designs? • architects structural engineers developers building contractors others (please specify) 100%. 8. If you are trying new building materials, how important are the following considerations in decision making process? Factor Very Import jnt Not Impoit.mt important design considerations (e.g., designtime/complexitj ) 1 ° 3 4 lll|l|||Si!!l!!!!ll!l • material performance (e.g., strength, longevity & file) 3 4 material costs i 1 3 4 l l f l B l l i l l l l l construction considerations (e.g. installation „ cost) 1 2 3 4 IHBB(Pil>lllllit use considerations (e.g., light, sound & thermal) 1 2 3 4 5 97 9. Do you feel you have knowledge with the following structural wood products and building systems? 1 ypc of W o o d I'rodiu-ls V e r y kiio»lc(Jj>eiible ill Knowledgeab le Not know Ivdgeable limhcis 1 2 |:S|1|I|1| 5 dimension 1 ti iribcr 1 2 * 3 . 4 5 lumber studs 1 2 3 4 5 wood beams 1 2 •J 4 5. composite lumber (e.g., glu-lam, LVL, PSL*) 1 2 3 4 5 oriented sliand hoard (OSH) 1 2 3 5 plywood for structure purposes 1 2 3 4 5. engineered wood beams 2 . ^ 3 , v > 4 wood roof trusses 1 2 3 4 5 wood floor trusses 1 2 4 •'••i-*glu-lam, glued-laminated timber; L V L , laminated veneer lumber; PSL, parallel strand lumber. 10. What do you think are the most important reasons explaining why wood is not commonly used as structural material in China? Reason l l _ ' ' .' • • using wood limits building height a ^it's strength is insufficient a , , it is costly a It rots it is difficult to design with * - a . lack of knowledge/experience with wood material a lack o f acceptance frpmbuilding developer , „, r R r i & lack of acceptance from market 5 11. Which roof systems have you,designed for multi-family housing in the past 3 years? reinforced concrete roofs • prefab concrete roofs • light gauge steel truss roofs • w ood truss roofs • others (please specify) • , • 12. In your opinion, when comparing wood truss roofs to steel roofs, what are the advantages of wood truss? strength is higher • ^durability is>better • fire safety is better • more environmentally; friendly • , 13. What is your gender? i iK i l e f e m a l e • 98 14. What is your age? 21-30 years • 31 -40 years • 41-50 years • • 51 -00 years >60 years 15. Which of the following best describes your educational background in the field of design? Check all that apply. [,tec]^J£al/traB^schi u • 1 • college • um\ crsit> (undergi aduate) • university (Master Degree) • university (Doctoral Degree) • other (please specify) • 17. What design qualification class (or level) are you holding? Le,vel/A<registered structural-engineer • Level B registered structural engineer • 18. How many years have you been a practicing engineer? years Thank you for your time and cooperation in completing this survey. Your participation is greatly appreciated. If you would like a summary of the research results of this survey, please leave your name and address below and it will be sent to you upon completion. Yes • N o • [OPTIONAL]: Company Name: Respondent Name: Address: Zip code: limail: 99 11.3. APPENDIX HI: QUESTIONNAIRE FOR DEVELOPERS 1. Please estimate the proportion of each type in the total number of buildings that you have built in the past 3 years. End use: residential % commercial ± % industrial (manufacture, warehouses, etc.) 0 / /° ^ihstimtionak('govenm hospi^ls-^etc.) ,•»>. • • - %t others (please specify) % Total ' , • •• ,„,-,,^ ,,,.,.,.. 100% 2. Please estimate the proportions of different building heights in total buildings that you have designed in the past 3 years. Building height: 1 -3 storeys % 4-6 storeys % 7-20 storeys % more than 20 slorevs % 3. Please estimate the proportions of different building areas in total buildings that you have designed in the past 3 years. Building area: less than 5.000 irT % 5.000-20,000 i n 2 _ % 20.000-80,000 n r % more than 80,000 m 2 % Total 100% 4. Estimate what proportions of the buildings that you have developed in the past 3 years have used the following as primary structural components? l i e d T % 7 concrete —= wood }j&f-\ -masonry 0 u combinations of the above (please specify) % 100% 5. In your experience, how much does each of the following parties contribute to the decision about structural materials in building designs? ' architects % structural engineers % developers % building contractors % _*&thers (pleqsejspecifv) % 100 0 ' 100 6. In your experience, how much does each of the following parties contribute to the decision about non-structural materials in building designs? • architects ; % ' structural engineers % , developers % building contractors . % \oi%pi^{^leasey,specify) % 100% 7. Please list the ways in which information about new building products/systems can be obtained on the job. Information sources: technical reading materials • trade reading materials manuals, codes and standards corporate promotional materials association promotional materials MiiiiiSnitfllim personal sales reps physical examples iHlllMiililiHilV seminars and courses word of mouth computerized information others (please specify) • 8. What do you think are the most important reasons explaining why wood is not commonly used as structural material in China? Reason: using wood limits building height ^ it's strength is insufficient 3 it is costly ^ it is difficult to dcM-jn \\ ilh -I lack of knowledge' experience w ith wood material CI lack of acceptance from building de\ eloper • lack of acceptance from market • 9. Which roof systems have you used for multi-family housing in the past 3 years? reinforced concrete roofs • prefab concrete roofs • light gauge steel truss roofs • wood truss roofs a others (please specify) • 101 10. In your opinion, when comparing wood truss roofs to steel roofs, what are the advantages of wood truss? strength is higher • *.liu ability is belter • fire safety is better • more environmentally friendly • 11. How many years has your company been in this industry? years Thank you for your time and cooperation in completing this survey. Your participation is greatly appreciated. If you would like a summary of the research results of this survey, please leave your name and address below and it will be sent to you upon completion. Yes • N o • [OPTIONAL]: C niiipany Name: Respondent Name: Address: Zip code: I-mail: 102 11.4. APPENDIX IV QUESTIONNAIRE FOR SHANGHAI & BEIJING SEMINARS 1. What type of company do you work for? • Design institute • Engineering firm • Developer • Building contractor • Other (please specify): . 2. What is your professional training background? • Architect • Engineer • Other (please specify): 3. Which roof systems have you designed or built in the past 3 years? • Reinforced concrete roofs • Prefab concrete roofs • Steel truss roofs • Wood truss roofs • Other (please specify): _ _ ' 4. If wood truss roofs were to be used in cities in China, what type of roof system would they most likely replace? • Reinforced concrete roofs • Prefab concrete roofs • Steel truss roofs 5. When comparing wood truss roofs to the roof system you selected in Question 4, would you expect wood trusses to be more or less costly for the following aspects? Factor More costly Same Less costly Don't know Design cost • • • • Material cost a • • • Construction cost • • • • • 6. When comparing wood truss roofs to the roof system you selected in Question 4, what are the advantages and disadvantages of wood truss roofs in your opinion? Advantages Disadvantages 7. What is your knowledge of wood trusses commonly used in North America, Europe and in Japanese 2 x 4 construction? (see picture below) • Very knowledgeable • Fairly knowledgeable • Not so knowledgeable • Not at all knowledgeable 8. In your experience, what is the influence of government policies (city or national) on housing design and development? • Definitely influential • Probably influential • Probably not influential • Definitely not influential 9. When you select building materials, is indoor environmental quality an important factor? a) At present? • Very important • Fairly important • Not so important • Not at all important 103 b) In the future? • Very important • Fairly important • Not so important Thank you for your time! Please enter your name for the draw: Note: Results from Questions 8 and 9 are reported in this thesis. 11.5. APPENDIX V METHODOLOGY (FOR ORIGINAL TELEPHONE SURVEY) Following an extensive literature review concerning China's construction tradition and styles, construction market status, and registration systems for Chinese building designers, a field survey was developed to collect information based on the objectives listed in Section 3. This study was to collect data from Chinese building specifiers in the Shanghai Municipality, and the provinces of Jiangsu and Guangdong. There is little history of market research in China due to its recent shift to a market economy. Therefore, this type of market research can only be considered exploratory. The data collection procedure for this study was designed to be a telephone survey. The sampling methods and questionnaires were developed according to the requirements for telephone survey. 11.5.1. POPULATION AND SAMPL ING F R A M E In this study, building specifiers were defined as architects, structural engineers (referred to as engineers) and developers in China. The geographical location was selected to be the three eastern coastal urban regions of China: Shanghai Municipality, and major cities in Jiangsu and Guangdong Provinces. According to Chinese regulations, only registered architects and engineers can perform design buildings, so these designers were targeted as the design population because they were considered the major decision makers during material specifications. Non-registered architects and engineers were excluded even though they might be working with registered designers in some design firms. Recently published lists by the governmental registration agencies provided the names of registered architects and engineers in Shanghai, Jiangsu and Guangdong. The lists included designers at all qualification levels that worked in design companies, also with different qualification levels. The working population for developers used the most recent yellow page listings for developers in these three regions. Although these listing are considered to cover most enterprises, it is unknown how many new, start-up developers were missed. 11.5.2. SAMPL ING METHODS The errors that can occur in surveys include sampling error, measurement errors, and coverage error. 105 Sampling error occurs when not all elements of the population are surveyed (Fowler, 1993). To prevent this error, all the architects and engineers, at different qualification levels and working at companies with different qualifications, were included in the population. To minimize measurement error, questions were kept as clear and simple as possible (Czaja and Blair, 1996). Questionnaires were reviewed and discussed, through several iterations, with both English and Chinese speaking persons. The Chinese versions were translated from English and checked by bilingual experts to ensure that the meaning in English and Chinese was kept identical. It is hard to estimate non-response bias in a telephone survey. Nevertheless, efforts were made to minimize non-response rate by simple wording of questions, clear declaration of the study purpose and promising to provide a summary report for participants. Coverage error is a type of error that occurs happens when not all members of the population have an equal chance of being selected (Weisberg et al., 1996). The populations of architects and engineers were to be stratified according to levels of qualifications and then randomly, sampled for each region. The developers were to be randomly sampled for each regions from the entire list derived from the yellow pages. These procedures would minimize coverage error. The collected lists of registered architects and engineers for the three regions were provided to the Chinese co-operators for data collection. They were also directed to use the lists of developers from the latest local yellow pages. Data collection was subcontracted to a Canadian research organization (Forintek Canada Corp.) who had experience in market research in China. They in turn contracted the data collection to a well-known engineering academic institution with a history of cooperation with the Canadian wood industry. To get samples large enough for statistical analysis, the target was 60 responses from each group of specifiers in each region. Therefore, for each region, there would be about 180 responses in total and the overall total number of responses for the survey would be 540. 11.5.3. DESIGN O F T H E I N S T R U M E N T Three questionnaires were prepared for architects, engineers and developers. These questionnaires were almost identical in content with a few questions being different according to each specifier's professional 106 characteristics. For instance, a question referring to knowledge about non-structural wood materials was only asked in the questionnaire for architects but dropped off from questionnaire for engineers and replaced with one concerning structural wood materials. Wood products mentioned in the questionnaires are those which are technically well defined and commonly used in North American (FPL, 1999). INTRODUCTION TO THE QUESTIONNAIRES In each of the questionnaires, a brief an introduction was given to describe the investigators and the survey. The introduction included information regarding the purpose of the study, its organization, how the survey was being conducted, the importance of the study, the rules of voluntary participation, a promise of confidentiality, reasons why the results would be useful and ways to contact the investigators. QUESTIONNAIRES Questionnaires were developed in English and translated into Chinese. The questionnaires were inputted into an Excel file so the investigators could record replies during the interview process. The questionnaires were pilot tested for content through personal interviews with 6 architects, 3 engineers, and 2 developers in Shanghai. Professors, (some of whom were contracted to complete data collection for this survey) from the civil engineering school at Tongji University in Shanghai, were also involved in discussions concerning the details of the questionnaires. One designer was interviewed by telephone to test the timing. To assure accurate and representative information being collected in the survey, the following principles were followed in preparing the questionnaire: • The language used in questionnaires was as simple, clear and accurate as possible, so each respondent would understand what they were being asked and understand the meaning in the same way (Fink, 1995). • Open-ended questions were avoided to prevent difficulties in the interpretation of the results (Czaja & Blair, 1996). • When possible, questions for architects, structural engineers and developers were kept identical to facilitate comparisons between specifier groups. 107 According to the objectives of this research, questions covered seven categories. Some of the questions were adapted from Kozak and Cohen's questionnaires for wood non-residential construction survey (Kozak and Cohen, 1997 and 1999). The categories in the questionnaires included: • Workloads of the specifiers in the last three years based on different types of buildings according to end uses, heights, areas and structural materials used; • Contributions of specifiers on the specifications of both structural and non-structural building materials; • Knowledge and perceptions of designers about structural and non-structural wood building materials; • Major concerns about the use of wood for construction in China; • Designers' major expectations for new building materials; • Channels through which the specifiers find and receive information about new materials and technologies; and • Demographic information about specifiers including gender, age, educational background, years of work experience and qualifications of the designers and their companies. The questionnaires for the survey and the seminars were completed in collaboration with researchers from Forintek, Canada who were conducting a separate study on wood trusses. SCRIPTS FOR THE QUESTIONNAIRES To ensure consistency, detailed scripts were produced for the interviewers to use for each telephone interview. The scripts were attached in the same Excel files and were hyperlinked with each question in the questionnaires so the investigators could refer to the script at any time during investigation. The script included the following information: • Detailed introduction of the purpose of the survey; • Explanation about the exact meaning of each question; • Explanations to some terms that might be new or unfamiliar to the investigators and respondents; and • Solutions to possible problems occurring during the interviews. BEHAVIOUR RESEARCH ETHICS 108 The questionnaires were reviewed and approved by the Behavioural Research Ethics Board of The University of British Columbia on December 19, 2003 (File No. B03-0761). 11.5.4. D A T A A N A L Y S I S Collected data was to be entered into Excel worksheets. Descriptive and inferential statistical analyses would be made using SPSS for Windows. For inferential statistics, an alpha level = 0.05 would be used in the calculation of 95% confidence intervals. 109 

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