China's economic system has experienced significant changes since the 1970s. These changes have altered the structure of the construction industry. The primary objective of this research is to study the structural changes of the construction industry with the change of the economic system from the command economy to the market economy. It was found that during this change the construction industry developed from a closed and single model to an open and complex model. This research was carried out by studying the urban redevelopment case of Shanghai. Shanghai is the most developed city of China and the commercial center of the country. In 1984, under the new political and economic environment, Shanghai was reopened to the world. The local authority decided to redevelop the municipality. The policy of leasing land became an important strategy to attract both inland and overseas investment. Large numbers of old houses and buildings were cleared and new commercial buildings and houses were built. During these activities, the structure of the construction industry of Shanghai, including users, designers, developers, contractors, and material suppliers, was changed. Thus the structure related to investment, labor and material supply, construction management and working objectives were changed. These significant changes disabled the old traditional system and enabled the new system to move toward to the market economy. In order to carry out the research, a large amount of information relating to leasing land activities, construction structure changes, labour migration, material supply and overseas investment was obtained, examined and further studied. It is hoped that this research can make some contributions to the studying of the nature of the construction industry. It is believed that this is a new way to look at the nature of the industry and this may help us to understand it more.