Building Houses In China

In the late 1990’s, I opened an office in downtown Beijing, China, near the intersection of Second Ring Road and Chang An Lu Boulevard, with a friend of mine from California, Tate Miller, who is currently the Dean of Advising, Careers and Student Services and the Monterey Institute of International Studies. Tate had been living in Beijing for a couple of years and contacted me in 1997 to start a new business representing US building material companies in China. He would run the operation ‘in country,’ while I traveled back and forth between China and the US. Appropriately, we named our company “American Western Homes and Building Materials, Inc.,” and we represented several building material companies, including a family owned business called Precision Panel Structures located in Eagle, Idaho. Precision Panel manufactures Structural Insulated Panels (SIPs).

Although I enjoyed traveling throughout the country, I found China to be a very difficult place to do business, particularly if you are trying to sell and ship product to China. My experiences were parallel to some of the people in the book, “The China Dream,” a tale about Western business woes in China stretching back 700 years. However, after a couple of years of hard work, we finally found a customer who actually conducted business the way we preferred. As a result, we were the first Americans to build houses in China using Structural Insulated Panels (SIPs) and all engineered lumber. And, even though the manager of the Chinese port held our shipment for a $10,000USD ‘ransom’ before he would release it, our customer was happy with the end result of the project.

This first project consisted of six homes in the northern part of Beijing in an area called “Fragrant Mountain,” a high end ‘neighborhood’ reserved for the Chinese political elite (The Presidential House is located in this area). Considering most every building in China is built using concrete, this sale was a major accomplishment. I helped build the shell of these six homes made from SIPs and all engineered lumber, mostly from Idaho manufacturers and suppliers. But, the primary construction managers were customers of mine from Idaho who also happened to be ex-Navy Sea Bees; they were used to working in unknown and difficult conditions and were eager to go to Beijing to work on this project. They considered it to be quite an adventure!

Consider this: it normally takes about 4 to 5 months for 25 to 30 guys to build the shell of a 4,000 square foot (approx 400 square meters) Villa out of concrete and bricks in the metro areas of China. We had sold these six homes to our customer telling him we could build all six shells, tight to weather, within 2 months from emptying the shipping containers. Our goal was aggressive, but we knew we could do it. What could go wrong, right? We had drawn and engineered the projects in Idaho, so we knew the houses (each one a different design) were fairly easy to build. All the pre-engineered wood was reliable to work with, and we bought trusses from one of the most experienced truss plants in BC, Canada (the only non-Idaho supplier, by the way). But, the fact there were no ‘formal’ plans for the development sent up the first red flag.
The Master Plan drawn in the mud for reference..... The ‘master plan’ (above) was drawn in the mud for our 2 man crew when they arrived on the site to get concrete slabs ready for the shipment from Idaho. Our guys had to know what they were going to build, right?

Despite the difficulties experienced on the job site (language barriers, minimal tools and equipment for building wood framed houses, etc.) in the end we easily met the schedule of erecting the shells of six homes in less than 2 months. We accomplished this goal with 2 Americans on the job site instructing 8 Chinese on how to build with our materials. After the shells were built, the finish materials were purchased ‘in country’ and it took another 3 or 4 months to complete every house to a move-in condition. To make it even more interesting, there were no ‘official’ building permits for this project….. This is a project I will never forget.

Because all of these homes were built using Structural Insulated Panels (SIPs) for the shell of the structure, I know these were the most energy efficient modern-day homes built in China. And, quite possibly, they still are.

This is what I do now: Impact Imports

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8 Responses to “Building Houses In China”

  1. Dnvrsangel-PattyStraub Says:

    So, did you have to go through any inspection process for each phase – electrical, plumbing, heating, etc? This is amazing that you were able to finally do this. Have they begun building more of these? Are you taking this ‘blueprint’ anywhere else to build these types of homes?

    • drewmcdaniel Says:

      We made it clear we were only supplying design, structural engineering (to CA Zone 4 requirements), materials and supervisory labor and the buyer / builder was supplying everything else. And, ultimately, plumbing and electrical inspections were performed during the course of construction. However, no building permit was issued because the buyer didn’t want the process bogged down at the building department; they don’t build with wood in China. The inspectors and everyone else in the process found it easy to do their jobs and they were impressed with the process and the end result.

      After this project was completed, we put together a joint venture manufacturing agreement with a company in Tianjin, China, a port city about 2 hours east of Beijing. We were to supply technology (we built all of our own manufacturing equipment for our factory here in Idaho) and the engineering for the product. They were to provide money, building, etc. However, they never came through with their end of the agreement, so we walked away. This was a very typical scenario of doing business (trying to sell to) China. They wanted the technology, but would throw their foreign partners under teh bus.

      I find it most interesting that, in the USA, we still have manufacturing: HOUSING! And, our housing is the best in the world. Ask anyone, anywhere! But, there isn’t a lot of support to build this sector into a huge export product. In the USA, pre-fab is shunned, so why would other countries want US pre-fab? There is a huge lobby for the exportation of raw materials (lumber, pre-engineered lumber, etc.), but there is no added value to these exports. CANADA, on the other hand, underwrote many pre-fab suppliers working in China in the late 1990’s and, guess what? They are still there. I am not sure if any USA pre-fab companies have a presence in China any longer. Its too bad……

  2. John Hendricks, AIA Says:

    I had heard of this before. Very interesting. It’s good to see a country such as China beginning to embrace modern building methods, though we’ll always have a place in our hearts for some of their more traditional structures.

    • drewmcdaniel Says:

      Hey John! Thanks for the comment. Yeah, the Chinese have embraced everything they can get their hands on. The staggering and impressive build out of high rise office, condo and apartment buildings throughout the country proves they want western tech and design. In fact, most of the big projects are / were western designed, engineered and constructed (maybe this is still the preferred method, but I don’t know). Around the mid 1990’s, when China started allowing more of their citizens out of the country to go to western Universities, this educated was returning to China wanting Western Wood Framed Houses….. but there weren’t any. They wanted these houses because they lived in them while they were going to university in the USA, Canada, Scandinavian countries, etc., and experienced their comfort. Today, its mostly Canadian companies capitalizing on the market due to subsidization, although Weyerhaeuser has a presence there (and has been longer than any other US company other than Motorola, I believe).

      As a side note: Our customer had to pay the $10kUSD ‘fine’ (aka: graft) to get his containers out of the port. They held the shipment because they said he / we “mis-categorized the shipment contents.” We shipped everything as pre-fabricated houses, but since they build primarily with concrete the port manager decided our wood frame houses were “temporary / emergency housing.” I got three US Senators involved to try to rectify the situation, to no avail. So, the ‘fine’ was paid. Ironic, because the oldest structures in China are built with wood……..

  3. Dnvrsangel-PattyStraub Says:

    This is truly fascinating — and I see so many ‘benefits’ to this. Talk about taking an industry and going global? Well Done! Do you have any plans of doing this type of project anywhere else yet i.e; India. I know they have started building separate housing areas since the outsourcing arena grew so huge, so fast. And this is strictly just a curiousity killed the cat – satisfaction brought it back kind of question. I think with something that is ‘proven’ so successful in this example, I wonder if you have any plans for another somewhere. What about situations, such as the Phillipines for example, where rebuilding will be utmost of priorities. Can you see this type of thing going to this type of level?

    • drewmcdaniel Says:

      Uuuuugggghhhhh….. I get tired thinking of this subject! But, it truly interests me too! I have tried to work with the building industry (screw the govt and I don’t want to be beholden to them anyway) to promote US Housing, particularly pre-fab, o no avail! Everyone is excited whenever the subject comes up, but then it fizzles! There is no reason whatsoever (well, except $$$) that more us housing packages aren’t shipped overseas.

      Yes, the Philippine flood, now the Samoan Tsunami from this morning, and dozens of other natural disasters every year would keep an industry alive! But, the relief money just doesn’t make it out of the national, regional or local governments down to the people. A place I visit every year in Central Java had an earthquake 5 years ago, and the people are still living in tents. Disaster housing would be the number 1 consumer of these packages, but the lowest cost would be about $15per/square foot of living area for a multi-family unit landed in Turkey or Indonesia (i worked on a couple project quotes many years ago). Too expensive for the locals, so it would need to be subsidized by USAID or some other organization. However, the housing I am talking about wouldn’t fall down in a typhoon or earthquake either. So, initial investment into housing is high (comparatively) but they wouldn’t need to do it but once every 60+ years.

      I have also built in Japan and Taiwan. Although Japan imports most of its building materials and most of THOSE are wood-based, Taiwan is a concrete country. So, I was a trend-setter there too. And, the locals and our customers LOVED it! It would be great to put together a package that would be ‘sitting….. waiting….’ until the next ‘local’ disaster (Mexico, for example) and then it gets mobilized to the zone, erected and people moved in within a few short weeks. And,the packages / materials I am talking about are those that can be built by the homeowners (think “Habitat for Humanity”).

      Any ideas on how to put it together? Social Media might be the answer to get exposure, funding, etc.

  4. Michael Says:

    Hi Drew, I am too very interested in this market. I am a building designer/engineer who has been hit by the recession. The ‘no wood’ issue worries me, but I know the Chinese curiosity of US ways will prevail. My question is, do you think it is practical to develop a plan to get my services into this growing economy? I think it is and would like any comments from someone who has stood there and paid the ‘fine’. Thanks and have a great holiday.

    • drewmcdaniel Says:

      Hello Mike and thank you for your comment. China itself does not have a timber stand of their own they can currently exploit. However, they import lots of lumber (raw and dimensional, engineered, etc.) from Canada, Russia and some from the USA (although very little). I am not sure of the prospects in China, currently, but they do tend to enjoy having foreigners working with them in their development activities. For example, most of the high-tech, high rise buildings were designed and engineered by western companies, western engineers, etc. Since it has been quite some time since I was in China, I am not sure of how the wood frame building market is developing / developed. But, its definitely worth putting some time into it. China is a very inexpensive country to live in (if you do it right) and westerners can make a lot of money. I might suggest you search Canadian companies doing business in China.
      Good luck to you! And, Merry Christmas!

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