Recently, the Ministry of Housing and Urban-Rural Development issued the "Notice on the Investigation and Handling of Illegal and Non-compliant Acts such as Illegal Subcontracting and Illegal Subcontracting in Construction Projects in 2022 and the Handling of Reported and Complained Cases."

I. Investigation and Handling of Illegal and Non-compliant Acts such as Illegal Subcontracting and Illegal Subcontracting in Construction Projects in Various Regions

In accordance with the work deployment of our Ministry, all 31 provinces, autonomous regions, and municipalities directly under the Central Government, as well as the Xinjiang Production and Construction Corps, have reported to our Ministry the investigation and handling of illegal and non-compliant acts such as illegal subcontracting and illegal subcontracting in construction projects in 2022 (see Attachment 1 for details). According to statistics, housing and urban-rural development authorities in various regions have inspected a total of 323,775 projects, involving 249,443 construction units and 272,941 construction enterprises.

(1) Investigation of Illegal and Non-compliant Acts

Housing and urban-rural development authorities in various regions have identified a total of 8,518 projects with illegal and non-compliant acts in the construction market. Among them, 527 projects involved illegal contracting, accounting for 6.2%; 399 projects involved subcontracting, accounting for 4.7%; 568 projects involved illegal subcontracting, accounting for 6.7%; 166 projects involved affiliation, accounting for 1.9%; and 6,858 projects involved other illegal and non-compliant acts in the construction market such as commencing construction without obtaining a construction permit, accounting for 80.5%. Housing and urban-rural development authorities in various regions have investigated and dealt with 3,157 construction units and 6,394 construction enterprises with illegal and non-compliant acts. Among them, 408 enterprises engaged in subcontracting, 597 enterprises engaged in illegal subcontracting, 112 enterprises engaged in affiliation, 84 enterprises engaged in lending qualifications, and 5,193 enterprises engaged in other illegal and non-compliant acts.

(2) Handling of Illegal and Non-compliant Acts

Housing and urban-rural development authorities in various regions have taken administrative penalties or administrative management measures such as suspension of business for rectification, lowering of qualification grade, revocation of qualification, ordering cessation of practice, circulation of criticism, confiscation of illegal gains, fines, and credit punishment against enterprises and personnel with illegal and non-compliant acts. Among them, 445 enterprises were ordered to suspend business for rectification, 1 enterprise had its qualification grade lowered, 1 enterprise had its qualification revoked, 242 enterprises had their bidding qualification restricted, and 2,114 enterprises were given treatments such as circulation of criticism and credit punishment; 32 persons were ordered to cease practice, and 1,173 persons were given treatments such as circulation of criticism; the total amount of confiscated illegal gains was 9.6343 million yuan (including 197,000 yuan of personal illegal gains), and the total amount of fines was 611.9449 million yuan (including 32.5517 million yuan of personal fines).

(3) Progress of Investigation and Handling in Various Regions

In terms of the total number of illegal and non-compliant projects investigated and handled, five provinces (municipalities) including Sichuan, Chongqing, Jiangsu, Jiangxi, and Liaoning investigated and handled a relatively large number of projects, with 1,365, 697, 671, 645, and 525 projects respectively (see Figure 1 for details).

In terms of the four categories of illegal and non-compliant acts investigated and handled, namely illegal contracting, subcontracting, illegal subcontracting, and affiliation, five provinces including Sichuan, Jiangxi, Hubei, Guangdong, and Anhui investigated and handled a relatively large number of projects, with 206, 176, 174, 160, and 154 projects respectively (see Figure 2 for details).

In terms of the amount of fines, five provinces (municipalities) including Henan, Jiangxi, Liaoning, Shaanxi, and Chongqing imposed relatively large amounts of penalties, with fines of 72.9165 million yuan, 71.2792 million yuan, 64.355 million yuan, 53.686 million yuan, and 46.325 million yuan respectively (see Figure 3 for details).

II. Next Steps for Work Requirements

Provincial housing and urban-rural development authorities shall further raise their ideological awareness, deeply carry out safety production governance actions for housing and municipal engineering, strengthen coordinated governance of the market and the site, severely crack down on illegal and non-compliant acts in the construction market, and increase penalties. For enterprises and individuals responsible for quality and safety accidents, penalties such as fines, suspension of business for rectification, cessation of practice, lowering or revocation of qualifications, revocation of practice qualifications, and lifetime non-registration shall be imposed in accordance with the law. Supervision and guidance for the work of municipal and county housing and urban-rural development authorities shall be strengthened, work responsibilities shall be compacted, the law enforcement level of frontline personnel shall be further improved, and daily supervision and inspection of enterprises and projects shall be strengthened. Typical cases shall be notified in a timely manner, avoiding "emphasis on inspection and neglect of punishment," and the warning and deterrent effect shall be fully brought into play. Data verification and control shall be strengthened, and statistical data within the administrative region shall be promptly reported to the Construction Market Supervision Department of our Ministry within 10 days after the end of each quarter. The investigation and handling of reported and complained cases transferred by our Ministry shall be earnestly carried out, the verified illegal and non-compliant acts shall be seriously handled in accordance with laws and regulations, and the handling results shall be fed back to our Ministry on time.

Attachments:Summary Table of the Investigation and Handling of Illegal and Non-compliant Acts such as Illegal Subcontracting and Illegal Subcontracting in Construction Projects in Various Regions in 2022.pdf