| The building equipment made by China-headquartered enterprises includes a great choice of purpose-designed machinery. Alongside excavators, construction cranes and loaders, there is also railway construction machinery, different-purpose trucks, hoists, pneumatic equipment etc.
The capacity of the Chinese building machinery 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. Last year the Chinese construction equipment market soared by 30%. Yet, despite the huge boom, some experts do not consider the Chinese market a profitable sector to invest in because of the low cost of the building machinery made Chinese companies. The price for the Chinese machinery is less than 50 - 150 % of the price for machinery made overseas, which appeals to many Chinese customers.
CHINESE BUILDING EQUIPMENT AND OVERSEAS CAPITAL
At present overseas companies choose to cooperate closely with Chinese producers. The majority of the leading producers of building equipment brought their own brands to the Chinese market. Later on, they began to cooperate with their Chinese counterparts. This strategy helps overseas companies have a closer look at the Chinese construction equipment market and ensure the sales of their production but under a different trade mark. As a result, foreign companies have lessened the cost of their production and at the same time have remained competitive on the market. Small Chinese producers that did not manage to enter into an accord with overseas business partners were knocked out of the competition. The close cooperation between Chinese producers and their overseas counterparts has become very profitable for both parties. For instance, two large companies Zoomlion and SANY made about $2, 86 billion in the year of 2008. More than that, Zoomlion has purchased the European company CIFA and, thus, has turned into the number 1 manufacturer and supplier of concrete mixers in the world.
Recently the export of the Chinese machinery has decreased, mainly due to the decline in the demand for building equipment on the biggest markets, such as the USA, the EU and Russia. Manufacturers of forklift and front end loaders have suffered a lot. The thing is the majority of highly developed countries have stopped the development some big construction projects because of the economic crisis, which has led to the decline in the demand. A number of preventative measures have been taken in Russia to shield Russian producers from the influx of the Chinese export.
Therefore, during the coming years Chinese producers will be producing building machinery primarily for the domestic market, at least till the global economic nosedive comes to an end. China's government has given a $570-billion aid to the sector. Yet, the money is not enough for all manufacturing companies and they look forward to mergers and takeovers with overseas companies. |
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