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Chinese Construction Machinery On the International Market
Date Added: August 26, 2009 06:11:34 AM
Author: William Blair
Category: Blogs: Technology

The Chinese building equipment includes a wide variety of specialised machinery. Along with excavators, building cranes and loaders, there is also railway construction machinery, different-purpose trucks, building hoists, pneumatic equipment etc. The capacity of the Chinese construction equipment sector in the year of 2008 (including the sales of pneumatic equipment and other stationary building machinery) has been estimated by experts at $38,6 billion. In the year of 2008 the Chinese construction equipment market soared by 30%. Yet, despite the enormous boost, some experts do not consider the Chinese market a profitable sector to make investments in due to the low cost of the building equipment produced Chinese eneterprises. The cost of the Chinese machinery is less than 50 - 150 % of the price for imported machinery, which appeals to a lot of Chinese buyers. CHINESE CONSTRUCTION EQUIPMENT AND OVERSEAS CAPITAL At present foreign enterprises choose to cooperate closely with Chinese manufacturers. The majority of the flourishing producers of construction equipment brought their own brands to the Chinese sector. Later on, they began to cooperate with their Chinese counterparts. This scheme helps overseas manufacturers have a better look at the Chinese construction equipment sector and ensure the sales of their production but under another trade mark. As a result, overseas companies have lowered the cost of their products and at the same time have remained competitive on the market. Small Chinese companies that failed to cooperate with overseas business counterparts were forced out of the competition. The close cooperation between Chinese manufacturers and their foreign partners has become very profitable for both parties. For example, two big companies Zoomlion and SANY earned around $2, 86 billion in 2008. Moreover, Zoomlion has purchased the European manufacturer CIFA and, therefore, has become the most influential manufacturer and supplier of concrete mixers in the world. Recently the export of the Chinese machinery has decreased, largely due to the decline in the demand for construction machinery on the largest markets, such as the USA, Europe and Russia. Manufacturers of forklift and front end loaders have suffered greatly. The matter is the majority of highly developed countries have suspended some big building projects due to the economic crisis, which has brought about the decline in the demand. A lot of preventative measures have been taken by the Russian government to protect Russian companies from the inflow of the Chinese products. So, during the coming years Chinese producers will be producing machinery mainly for the home market, at least till the global economic nosedive finishes. The sector has been given a $570-billion aid. Yet, the money will not be enough for all manufacturing enterprises and they look forward to cooperation with overseas manufacturers.
 
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