In response to current irregularities in the construction market such as false bidding and qualification affiliation, Shanghai will revise relevant regulations. Shanghai will further standardize the construction market order, curb false bidding, and implement a new approach of combining lenient and strict administrative supervision.

　　According to introduction, the bidding system, which selects contractors through fair and open procedures, is a bellwether for the management order and methods of the construction market. With rapid economic and social development, the number of market entities in Shanghai's construction industry has increased, transaction volumes have surged, and the market has become unprecedentedly active. In the past five years, the output value of the construction industry has grown at an average annual rate of about 5%, reaching 510.3 billion yuan in 2013. Some new problems and situations in the construction market have gradually emerged. First, irregular trading behaviors such as false bidding and qualification affiliation have impacted the market environment. Second, the government has unnecessary intervention in the market behavior of social investment entities. Third, employers use their dominant position to cause an imbalance of contractual rights and obligations. Fourth, internationally accepted engineering management models such as general contracting and project management lack legal norms. Therefore, it is necessary to appropriately adjust the existing system, relax government control over social investment projects, release the vitality of the construction market, and focus on building a unified, open, competitive, honest and law-abiding, and appropriately regulated construction market system.

　　The "Regulations (Revised Draft)" consists of 7 chapters and 60 articles, covering nine aspects: adjusting the construction market management system, relaxing mandatory bidding requirements for social investment projects, standardizing the general contracting system for construction projects, refining the conditions for determining self-completion of the main structure by construction general contractors, improving the construction project contracting system, guiding the development of construction project management, strengthening cost control for government-invested projects, establishing a project quality guarantee insurance system, and optimizing government services while strengthening government supervision. Regarding the adjustment of the construction market management system, the previous "Regulations" established a "unified management" system by the municipal construction administrative department for the construction market; this will be adjusted so that the municipal construction administrative department is responsible for unified supervision and management of the construction market, while construction markets in specialized fields such as transportation, water affairs, ocean, greening, civil defense, and housing will be supervised by respective professional departments according to the division of responsibilities prescribed by the municipal government. Regarding the establishment of a project quality guarantee insurance system, the "Regulations (Revised Draft)" intends to confirm project quality guarantee insurance as a guarantee method for construction project quality responsibility; where other methods such as project quality guarantee insurance have been adopted, no project quality guarantee deposit shall be established.

　　The Urban Construction and Environmental Protection Committee of the Shanghai Municipal People's Congress stated in its deliberation report that the "Regulations (Revised Draft)" addresses the actual situation and development needs of Shanghai's construction market, rationalizes the government management system, further standardizes prominent issues in the construction market, introduces new systems such as engineering project management and project quality guarantee insurance, and optimizes government service measures while strengthening government supervision.

　　Tang Zhiping, Director of the Shanghai Municipal Commission of Urban and Rural Construction and Management, emphasized in his interpretation that Article 18 of the draft regulations proposes that social investment construction projects may not be subject to bidding for contracting; however, this does not mean an absence of administrative supervision—the government has relaxed "investment supervision" but will focus on strengthening supervision of project quality and safety. While relaxing mandatory bidding for social projects, the draft regulations take a stricter stance on the "contracting conditions" for government-invested projects. The revised draft refines the three conditions that projects contracted according to law should meet: the contracting unit is a legally established legal person or other organization; there are materials or documents required for project contracting; and the project construction funding sources have been secured. During the drafting process, people's congress representatives, experts, and enterprises suggested adding another condition: construction contracting for government-invested projects should have construction drawing design documents, in order to accurately estimate project costs and effectively curb dishonest behaviors such as low-price winning bids and high-price claims, as well as false bidding.