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Chinese position in the world: in-demand events
China ranks third in the world in the production of construction machinery after the United States and Japan, accounting for about 15% of the global output of construction machinery. After approximately a 10-year consolidation period of construction machines 2016, several large industrial associations (groups) of a national scale with well-known trademarks, including XCMG, Liugong, Xiagong, Shantui, Zoomlion, Sany and Heli, were formed in the road building machinery of China. In 2013, local companies produced construction equipment and China machines by about 11.9 billion USD, which is 26.7% more than in the previous year. The turnover of these companies grew by 34% (to 12.5 billion USD); profit – by 59% (to 890 million USD). Of these, 12.5 billion was obtained from supplies to the local market and 1.05 billion – from exports. The five largest firms in the industry controlled only 12.8% of its total shipments in 2003, their cumulative supplies to the domestic market amounted to 1.6 billion USD.
According to experts of the British consulting company Off-Highway Research (OHR), due to the presence in China of huge production capacities in road construction machinery, as well as the relatively low wage level, the share of this country in the world production of construction machines will reach approximately 50%. The number of suppliers will include both domestic companies and enterprises owned by leading foreign producers. A number of Chinese firms (in particular, Foton and Zoomlion) are already showing interest in creating foreign branches.
China has historically been a net importer of construction equipment, and although exports have increased in recent years, its growth rates have been much lower than imports. In 2013, for example, purchases abroad increased by 74.5%, while exports — by 41.4%. In 2014, due to government’s measures to curb economic growth, imports of construction machinery increased by 9.9%, and as a result, the negative balance of foreign trade for this product group decreased by 477 million USD – to 2,058 million USD. Experts consider this a temporary phenomenon and predict a return to high market conditions.
Obviously, this is also the opinion of the world’s largest manufacturers, who continue to invest in Chinese road construction machinery.