Top court issues rules to clean up construction market

China's top court issued a judicial interpretation on Monday aimed at fostering a well-regulated construction market and promoting the sector's high-quality development.

"The initiative underscores the critical importance of construction quality in safeguarding lives and property and ensuring the sustainable future of urban environments," said Chen Yifang, chief judge of the First Civil Division of the Supreme People's Court, while explaining the interpretation's objectives and significance. She stressed the need for higher standards across the construction industry.

Chen highlighted the 15th Five-Year Plan (2026-30), which calls for building homes that are safe, comfortable, eco-friendly and intelligent. The plan aligns with the country's broader goals of sustainable development and technological advancement by promoting the integration of smart technologies and green building practices in new construction projects.

The judicial interpretation contains 23 articles providing clearer guidance on addressing longstanding problems in the construction sector.

One major issue is misconduct in bidding and tendering, including backroom deals, collusion and price undercutting.

"These unethical practices distort market competition and undermine efforts to establish a unified national market," Chen said. She noted that collusion among bidders, or between bidders and tenderers, as well as substantive negotiations before the successful bidder is officially determined, harm the interests of other bidders and disrupt fair competition.

To curb such practices, the interpretation requires courts to invalidate bids won through improper means. Contracts signed between a tenderer and a bidder following substantive negotiations conducted before the official determination of the winning bidder will be deemed null and void.

"This measure aims to restore fairness and transparency to the bidding process, ensuring that all participants have an equal opportunity to compete," Chen said.

Another persistent problem is delayed payments, which particularly affect small and medium-sized enterprises and workers.

"These delays not only strain the financial stability of these entities but also affect the livelihoods of workers, especially migrant laborers, who are often the most vulnerable to wage arrears," she said.

To address the issue, the interpretation emphasizes the importance of making timely and full wage payments to migrant workers, describing it as a key part of the broader commitment to ensuring justice for the people.

Under the interpretation, courts, government agencies and social organizations are required to strengthen coordination to safeguard migrant workers' wage rights.

"The goal is to establish a comprehensive, law-based system that effectively eradicates wage arrears, ensuring workers receive the compensation they are owed without undue delay," Chen added.