Professor of Architecture, Tongji University
Editor in Chief, Time + Architecture Magazine
“The context of creation of contemporary Chinese architecture practices : From architecture practices to branding
China's economy entered a new phase of development in the early 1990's and for almost two decades since it has enjoyed uninterrupted annual economic growth rates in double digits. The economic restructuring, ever-growing demand and the dynamism of a full market economy have all brought about radical changes and large-scale urban development. In the wake of the general economic liberalization, the Chinese architecture market is flourishing, led by a relentless boom in real estate developments. Large scale urban expansion, including new residential neighborhoods, and extensive urban regeneration helped position architecture as a major contributor to GDP growth. In addition, the architecture sector has itself experienced deep structural changes, spurred by this market boom which has been seen at times as verging on the un-healthy. With the reform of state run architecture institutes, and foreign architects entering China in the 1990s and enjoying an almost fully open market by the end of the decade, the architecture sector gradually moved towards full liberalization. The view that architectural design is a service worth paying for is gaining currency, in turn ushering in the development of architectural design branding.
1. Opportunities for architectural design and the founding of new architectural practices
The liberalization of architecture in China, coupled with the growth of the property sector, have contributed to generating endless new opportunities for architects.
One such opportunity has been the commercialization of urban housing. Since 1990, the policy of housing distribution by work units slowly began to disappear from Chinese cities. Housing became a tradable asset, produced and sold directly by the market, and various investors (government, partnerships, private, individuals, foreign) entered the residential development market. Today, housing projects are springing up everywhere, as a construction boom is fuelled by a market economy in the grip of transformation. A main facet of these changes is the growing interest of developers in architectural design. Urban developers are transforming the architectural production model inherited from the centrally planned economy, and are seeking operational practices that are appropriate to the new market conditions. The market now demands efficient and reliable services, and economic considerations and profitability have become key bywords for Chinese architects. Through new large scale residential and real estate projects, developers and architects are reconfiguring their relationship and linkages, leading to the emergence and adoption of the architectural practice model, hitherto unknown in China.
To keep pace with these trends, policies regulating the architectural design market have also evolved. State run architecture institutes had long held a monopoly position in this market. In January 1993 the Chinese Ministry of Construction issued guidelines for trialing the establishment of private architectural practices. Later, in December 2000, the Ministry issued guidelines for the management of architecture and construction practices. These were the initial stepping stones towards greater diversity in the field of architecture in China, accelerating the privatization of State run architecture institutes, while heralding the arrival of foreign practices from Hong Kong, Macao or Taiwan. However, the most notable change was certainly the proliferation of private architectural practices springing up to meet the individual requirements of developers, participating in the fierce market competition and contributing to the creation of a diversified architectural sector landscape.
2. Market competition and brand awareness
The booming urban development market in China has become a strong magnet attracting varied capital investors. To deal with these very new, and equally inexperienced, developers, emerging architectural practices must continually learn to adapt to the changing market. Of these private practices, 70% focus primarily on residential developments, a market which constantly demands new services. Responding to the developers’ requirements, architectural practices that are creative, responsive to market trends, and able to provide quality services and execution are in a position to exploit these opportunities and develop new architectural concepts. In the process of redefining their relationship with developers, architectural practices have become aware of their own value and of the importance of positioning themselves in this new service market. After more than 10 years of development, the market is maturing, and property owners and the wider consuming public are becoming more and more able to judge and value urban developments according to their own taste and criteria, gaining a more critical attitude towards the standards of the build environment and a growing aspiration for high quality and distinctiveness. These changes are creating real market segmentation, making more sophisticated architectural design and concepts and individual differentiation the new preconditions for market success. With this, the architecture market is entering a new phase of heightened competition. Practices that have acquired a track record of successful project portfolios, genuine construction expertise and management skills are now becoming more conscious of the need for business management skills and branding.
3. Architecture market development and branding
Today, creating a brand has become a key to the growth of any architecture practice, and much can be learned from international experience. With its accession to the World Trade Organization, China will gradually join in the global economy, with all the implications of fierce open competition and survival of the economically fittest. Like much else, China has embraced this evolution with astonishing speed, with all the deep impacts this has on Chinese society. Along with all economic sectors, architecture has not been spared. Practices with a global reach, including SOM, KPF, GMP or OMA, have used their success record and strong communication resources to influence policy makers and investors, creating the benchmark for the new Chinese architectural practices. These international architecture brands are posing fierce competition in the architectural design market in China. However, local practices could also benefit hugely from this trend by forming partnerships with these global players and thus acquire world class knowledge and skills.
As Chinese architects returned en mass from overseas, setting up their practices in China, they added another influence to the development of the country’s architecture landscape. These "overseas" Chinese architectural practices must simultaneously benefit from the growth of international practices in the market, cooperate with increasingly prominent Chinese design institutes, and create their own branding. They use their external perspective, leverage global resources, and pool their own capabilities to build up their teams. This kind of interaction and amalgamation also allows local practices to improve their internal processes and structures, from design methods to operational management, and move towards proactive self-development in the market place.
In this scene, brand and branding have become crucial to the competitive success of architectural practices in China. However, brand value needs a consistent innovative output and creative energy, and brand reputation needs to be underpinned by a successful track record. Raising the visibility of a brand’s designs is indispensible to maintaining a strong position in a rapidly evolving market, primarily through brand differentiation and market segmentation. While Chinese design companies tend to have long-term plans, their branding and corporate culture are still in their infancy. To evolve into maturity, participation in exchange and communication events and platforms is an effective way through which they can broaden their presence and reach, enhancing their own visibility and dialogue with their peers. Such interaction also contributes to developing the culture of architecture among the wider public, which continues to demand more as it recognizes the value of brands. In addition, as the media plays a crucial role in highlighting and publicizing the successful work of the many architectural firms competing in the marketplace, communication management is a vital element of branding success.
4. Architecture market maturity and brand resilience
Ministry of Construction statistics show that the architecture market in China experienced strong growth in early 2004, with total annual construction value exceeding RMB 1,600 billion (EUR 160 billion). There were a total of 11,000 architecture firms, with an income in excess of RMB 931 billion (Euros 93.1 billion), making China the world’s largest construction market. Over the next five years, the Chinese construction sector is forecast to grow by an average of 10% per year. Other sources also show that in 2001 China’s urbanization rate was 37.7%, and this figure is expected to reach 45% by 2010 and 50% by 2020. Continued economic growth, the residential market boom, and major events, such as the Olympic games in Beijing in 2008 and the Universal Exhibition in Shanghai in 2010, will continue to the fuel the architecture and construction sectors and present them with huge opportunities. It is safe to predict that the Chinese construction market will provide ongoing opportunities to architects throughout this decade, and potentially beyond 2020.
As the Chinese building sector faces colossal demand and increased competition, the creation of brands of private Chinese architectural practices has only begun. While brand creation might appear easy at first glance, its development is a complex and long process that unfolds over many years. A quick assessment of Chinese architectural practices will tell us they can easily meet domestic demand. However, their history in China is unique in that they have not faced any major economic downturn or withered a major crisis, so their maturity and resilience can not be fully assessed. Challenging times and adversity help push forward creative strategies and innovation. Having said that, it is gratifying to see Chinese practices proving their ability to survive in such a challenging market in their initial years and produce more and more creative works, gaining increasing recognition within their own sector and in society at large.
With China developing at unprecedented rates and fully integrating into the global economy it faces great upheavals in values and attitudes as Chinese cultural references are challenged, and often replaced, by their global variant. In the face of these challenges, architects and planners are adopting an intellectual and artistic approach that sets them apart from prevailing attitudes in China’s creative market place. We can only pray that history will vindicate those architects and urban planners who, while fully embracing the market mechanisms and the demands of globalization, are contributing to building a China that remains true to its unique identity.
