China is Targeting the International Market of Construction Machinery

construction machinery
by cloois

China is Targeting the International Market of Construction Machinery

Over the years, the Chinese construction machinery in the huge domestic demand to promote development and growth, many large and small engineering machinery enterprises own entertainment in the massive Chinese market, enjoying the feast.

Meanwhile, foreign counterparts from around the world have also rushed to join the ranks of sub-cake. For a time, the Chinese school of earth rejoice. Since the implementation of macroeconomic control in 2004, despite drastic changes in construction machinery industry, an increasingly weak domestic market. In the popular hit at the same time, more and more Chinese companies to explore overseas development. 2004 and for the first 5 months of statistical data have shown a major increase in exports of construction machinery. However, this small base on the establishment of a sudden the “high growth”, it seems “driven to revolt,” the taste of the great potential of foreign markets and accompanied by the attention. Which is precisely at this time, a lot of talent really clear, recognized in the domestic market is being eroded by foreign powers at the same time, foreign markets are facing a complicated situation. Entertain for many years, so today had to face the Chinese construction machinery enterprises, “internal and external” critical situation surrounded. Breaking out of a construction machinery already quietly started fighting.

Two days of construction machinery enterprises fate is typical of Investment oriented industries, and years of construction machinery enterprises in China are heavily dependent on the proactive fiscal policy and domestic large-scale infrastructure construction for survival and growing. Huge domestic market will not only have a month to feed a flourishing population of Chinese enterprises, it continues to attract the Europe, America and Japan, the world’s leading enterprises to gold.

The world’s largest construction machinery manufacturer Caterpillar as early as 1995, a joint venture factory in China, while China’s WTO commitments with the gradual implementation, construction machinery industry giants have landed in China. 2001, the foreign capital to 30% per year rate of growth and achieve localized delivery. In recent years, they basically monopolized the domestic high-end market, and even occupation of the individual sub-sectors of the market.

By 2003, foreign investment, joint ventures have occupied 47% market share in China. Even the highly competitive, but in building prosperity in China, construction machinery industry has maintained a rapid development of the situation, just before the macro-control, there is also the best level of growth?? The first quarter of 2004, sales grew 73.9%, April has 63% growth in achievement.

In order to suppress overheating in some sectors of the economy, the Chinese government decided to carry out macro-control, the State Council issued a circular late April that year, decided to raise the iron and steel, electrolytic aluminum, cement and real estate development sector capital investment in fixed assets ratio, required clean-up of fixed assets investment projects, depth rectify the land market, strictly manage the land. Control effect becomes more evident, the National Urban fixed-asset investment growth rate to 53% from the previous two months, fell rapidly to 4.7% in April. Classical investment theory still applies here. Over-rely on the domestic market in the hands of Chinese engineering machinery enterprises only basket was thus overturned. Unavoidable in that almost all the Chinese engineering machinery enterprises have varying degrees of impact, one has a business began limiting production and continuous losses. May, excavator sales below the level the same period in 2003, appeared the first year of negative growth in recent years; loader’s sales growth rate dropped sharply from February, in March of 156%, 76.5% rapidly to 37%; The concrete machinery manufacturers also agreed to enter in May claimed that sales decreased.

The industry’s sales revenues rose at a monthly rate of 10% down, until the end of 2004, and enter 2005, the first 4 months of sales revenue is still negative. At present, the macro-control and no end in sight, the impact of the construction machinery business has dropped more than a simple revenue, capital backlog, bad debts increased, the brain drain, have become the problem not solved in the short term. If the macro-control to the end of this year, then the impact of the construction machinery industry will continue through at least the first half of 2006. Which are in China, foreign investment, joint ventures, but successfully resisted this invasion.

Such as Caterpillar Xuzhou, Chengdu Kobelco, Hefei Hitachi and Daewoo and other enterprises, when in the face of macro-control exhibited good adaptability. They rely on a complete industrial chain of rational and mature global sales network, deployment of the product in the world, resold, subject to the impact of China’s relatively weak market changes a lot. Explore the causes of this phenomenon, I am afraid, and foreign investment, joint ventures, “two legs” walk about. Therefore, Chinese enterprises have no reason to continue to bet on a market on the.

Explore the international market?? Grow a must look at current international market is a period of strong demand in Asia, Europe, the Americas, Africa business opportunities are everywhere. Which Asian and African developing countries as China’s major export target. In Malaysia, the government in order to encourage imports of advanced machinery and equipment, developed a number of preferential policies, such as priority sectors, the Chinese enterprises to invest in machinery and equipment industry in the country, duty-free access to 100% of statutory income for 10 years, this special offer. Developed by the Indian IT industry aware of its poor infrastructure constrains further economic development in the ten-year infrastructure development plan and the preferential policies, decided to invest the next five years, more than 200 billion U.S. dollars of construction funds. In addition, like Nigeria, Vietnam, and plan long-term commitment to the national infrastructure, are a huge market for construction machinery.

Meanwhile, the Chinese economy in recent years has been significantly improved, more convenient operation of export enterprises. With the completion of the relevant WTO commitments, MFN tariffs have been reduced to the standard treatment, on the number of non-tariff restrictions, including export quota and license system had been abolished. Countries open the door for the enterprise export, export finance system is being completed, the right to export self-examination and approval authority to relax much more convenient procedures for export processing. Meanwhile, industry associations and chambers of commerce in recent years, many domestic enterprises to participate in international organizations, construction machinery industry exhibition, to help companies access to international markets, information exchange and trade cooperation and achieved remarkable results, erected a very good platform.

March 2004, China Construction Machinery Association of China National Pavilion for the first time the name of the collective organization of domestic manufacturing enterprises International Construction Machinery Exhibition Three Fair (Munich, Germany, Las Vegas, Paris, France), one of Munich bauma2004. Including the Xuzhou Construction Machinery Group (XCMG), Guangxi Liugong Machinery Co., Ltd. (Liugong), Xiamen Engineering Machinery Co., Ltd., Changsha Zoomlion Heavy Industry Sany Heavy Industry Co., Ltd. Technology Development Co., Ltd. and (Sany) etc., 42 exhibitors, displaying the highest standards of the domestic representative of 60 sets of construction machinery products, set off a wave of Chinese in the Munich style. Moreover, the participation of a number of Chinese construction machinery manufacturers also show users with overseas business and exports reached an agreement, some enterprises on several occasions after the show received from foreign buyers.

China visionary companies have already started the “Lexington” of gunfire. China’s largest construction machinery production base in Xuzhou Construction Machinery Group in May last year, passed the European CE certification, and successful in France, Poland exported loader after each one received recognition recently received from Poland in the 50 Taiwan loader orders; size after early Xu workers Changlin Co., Ltd. started in 2001, set up sales offices abroad, and focus on brand strategy, exports increased year by year; now, Sany, Liugong are set up sales outlets in India, is opening the Indian market. The current Chinese enterprises in international market development, still in the start and acceleration phase, still emphasize the dependence on the domestic market. But by expanding the overseas market to expand enterprise scale and deeper development of enterprises, has become more and more construction machinery enterprises consensus. Fortune to rely on the domestic market Chinese companies have been targeting the country’s vast outside world.

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