The power construction industry is highly correlated with national economic growth and is significantly influenced by social fixed-asset investment; it is closely linked to the fixed-asset investment and capacity expansion of downstream power generation companies and grid operators. Should economic growth slow, leading to a deceleration in social fixed-asset investment and prompting power and grid companies to scale back infrastructure projects, the industry will face the risk of declining market demand and revenue. At present, China’s economy is in a steady upward phase, making it highly unlikely that overall industry sentiment will deteriorate substantially over the next few years. Nevertheless, cyclical economic fluctuations and volatility in power-sector investment continue to exert some influence on industrial firms’ investment decisions, production planning, and marketing strategies.

　　For many years, three major issues have plagued the development of the power construction market: first, low rates of project funding availability and prolonged settlement and payment cycles; second, winning bids at artificially low prices during the tendering phase; and third, discrepancies between engineering budget quotas and actual market prices. In the context of market competition, some bidding firms neglect long-term development interests and engage in serious short-termism. During the tendering process, they often submit bids at extremely low prices, which not only exacerbates excessive competition across the industry but also constitutes a key factor hindering the resolution of project settlement disputes.

　　Due to excessively low pricing, it becomes impossible to meet the contracted schedule, safety standards, and quality objectives during contract performance, thereby causing a sharp increase in the likelihood of various risks. Low bidding has thus become the primary means by which some firms secure contracts. This survival strategy, however, traps enterprises in a vicious cycle of production and operations, which is a key reason why certain construction firms have long been mired in operational difficulties.

　　In recent years, the government has vigorously promoted the development of the power construction industry and new energy projects, maintaining a high level of investment in the power sector and thereby providing a broad market for the entire industry. However, if government policies governing power generation systems and grid infrastructure were to change, leading to adjustments in the energy mix, this could adversely affect the market outlook for the power construction industry.

　　Power construction is a high-risk industry. To strengthen construction safety management, the State has successively promulgated the Work Safety Law of the People’s Republic of China and the Regulations on Work Safety in Construction Projects, imposing stringent requirements on construction enterprises and construction activities. Due to adverse weather conditions, complex geological conditions, the construction of high-rise buildings and underground works, the use of explosives, and the operation of large-scale mechanical equipment, any negligence in enterprise management may result in casualties, damage to property or production facilities, and penalties from the relevant regulatory authorities. Such incidents can also adversely affect project schedules and corporate operations, while exposing the enterprise to corresponding liabilities.

　　Power construction projects are highly comprehensive, covering civil engineering construction, ground improvement, and mechanical and electrical installation, among other areas. Given the varying geographic locations and geological conditions of these projects, it is necessary to develop tailored construction plans and employ appropriate construction techniques. However, some of these plans and technologies carry a risk of failure if potential challenges are not adequately anticipated, while certain complex projects may fail to be completed smoothly due to insufficient advancements in construction technology.