Construction Equipment Market

China

 

Overview                                                                                                    

x	2004	2005	2006 (Estimated)
Total Market Size	10.6 Billion USD	16 Billion USD	17.9 Billion USD
Total Local Production	4.3 Billion USD	13 Billion USD	13.9 Billion USD
Total Exports	99 Million USD	2.9 Billion USD	4.5 Billion USD
Total Imports	6.4 Billion USD	3.0 Billion USD	4.0 Billion USD
Imports from the U.S.	25 Million USD	369 Million USD	405 Million USD

(Source: China Customs statistics for construction equipment.)                                

The Chinese construction equipment market presents many opportunities and challenges to American companies seeking to increase their sales in China. In 2006, the total exports exceeded the total imports for the first time. Many American companies (e.g. Caterpillar, John Deere, and Terex) have successfully entered the Chinese market but are increasingly producing locally.  They have become the key players in China’s construction equipment industry.  Second, the Chinese government is supporting local companies in the international market.  Recently, some of U.S. companies trying to acquire shares in state-owned companies have encountered delays in obtaining the approval from the Ministry of Commerce. Meanwhile, U.S. companies are facing fierce competition from Korean, Japanese, German, and domestic manufacturers.

According to the 11th Five-Year Plan, the government will significantly investment in  the construction of railways, highways and airports etc. Also, the local government has made large investments in local transportation such as subways and tunnels to support the 2008 Olympics and 2010 World Expo. All these projects will provide great opportunities for the construction equipment industry.

The best opportunities for U.S. exports of construction equipment include the following: concrete machines, excavators, shovel loaders, lifts, self-propelled bulldozers, angle dozers, graders, levelers, scrapers, mechanical shovels, tramping machines, and road rollers.

 

Opportunities                                                                                       

Railway Project

According to the 11th Five-Year Plan, the total investment in railway construction will reach USD 160 billion in the next five years.  Such a large-scale project with high standards to be completed in a relatively short time will create demands for mechanical equipment. The following equipment appears to be in highest demand: rotary drilling rigs, excavators, concrete pump trucks, loaders, cranes, etc. Due to changes in tariff exemptions that are expected to come into force March 1, 2007, some products mentioned may incur higher tariffs when imported to China.

Highway Project

According to the National Highway Plan, the highway construction, known as “7918” Net, which will consist of 7 highways starting from the capital, 9 highways from north to south, 18 highways from west to east. The total will reach 85,000km. Currently 34% of the plan is finished, 19% is under construction and still 47% yet to begin. The annual average investment will reach USD 18 billion by 2010. Together with the railway project, thisl creates further demand for construction equipment.

South–North Water Diversion Project

The vast South–North Water Diversion Project started in 2002.  The purpose is to divert water from the Yangtze River in the south to China’s north, where water is in critical need for agricultural and industrial applications.  The project consists of three south-to-north canals, and will cost USD59 billion; when completed in 2010 it will pump about 13 trillion gallons of water to the north every year.  The middle route of the three canals is the most complicated and will provide the most market opportunities for American construction equipment manufacturers that offer advanced technology.  Different types of equipment are needed for the project, including scrapers, excavators, vibratory rollers, dump trucks, truck cranes, etc.

2008 Olympics, Beijing

The Beijing municipal government plans to invest nearly $22 billion in infrastructure construction for the 2008 Beijing Olympic.  Main projects include:

Public Transportation:

·           93 kilometers of the fifth ring road

·           35 kilometers of express rail

·           105 kilometers of major roads

·           192 kilometers of railroad

·            Subway lines to airport and Green Olympic Park

Airport:

·           One new runway     

·           One new terminal

·           55 standard aircraft parking aprons

World Expo 2010, Shanghai

Shanghai will host the World Expo from May 1 through October 31, 2010. To support the event, the Shanghai government will invest over US $10 billion in infrastructure modernization (harbor, airport, city transportation, and cultural facilities). Major projects include:

            Public transportation:

·           270 kilometers of metro lines

·           400 kilometers of road improvement

·           One under-river tunnel

·            6300km2 parking space              

·            Country pavilions in the Expo Park

            Airport:

·           Two runways

·           One new terminal

 

Resources                                                                                                       

China National Construction Machinery Association

http://www.cncma.org/

 

China National Construction Machinery Corporation

http://www.const-mach.com/

 

Association of Equipment Manufacture ( AEM )

http://www.cm-1.com/

 

Major Shows

·           The 9th Beijing International Construction Machinery Exhibition & Seminar(9th BICES)

October 16-19 2007

Beijing Jiuhua International Convention & Exhibition Centre

Organizer: China Construction Machinery Association

China Construction Machinery Co., Ltd.

CCPIT-Machinery Sub-Council

Tel: 86-10- 6857-5008, 6852-3884

Fax: 86-10- 6851-3987

http://www.e-bices.org/en/index.asp

   

·            CONEXPO® Asia 2007 (CONEXPO Asia Construction Machinery Exposition)

December 4 – 7,2007

Chinese Export Commodities Fair (CECF) Pazhou Complex in Guangzhou

            Organizor: Association of Equipment Manufacturers (AEM)

China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME)

phone +1-800-867-6060, +1-414-272-0943, fax +1-414-272-2672

email:  info@N0SPAM.conexpoasia.com

http://conexpoasia.aem.org/EN/index.asp

 

U.S. Commercial Services Contact Information in China

 

Beijing Office:

Tel: (86-10)8529-6655

Fax: (86-10)8529-6558/9

Wei Jing

 

Shanghai Office:

Tel: (86-21)6279-7930

Fax: (86-21)6279-7639

Wennie Wang

 

Guangzhou Office:

Tel: (86-20)8667-4011

Fax: (86-20)8666-6409

Cathy Wang

 

Chengdu Office:

Tel: (86-28)8558-3992

Fax: (86-28)8558-3991

Misha Cao

 

Shenyang Office:

Tel: (86-24)2322-1198x8142

Fax: (86-24)2322-2206

Liu Yang