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China machinery makers upbeat on US

By LIA ZHU in San Francisco | | Updated: 2017-03-13 16:43

Chinese construction machinery companies will continue to grow quickly with more investment expected in the US, said industry insiders.

More than 110 Chinese companies of construction equipment participated in the just-concluded ConExpo in Las Vegas, one of the largest international trade shows for the construction industry.

"China's construction machinery is competitive in the international market, and the industry is ready to go global," said Zhang Yujing, president of China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCMA), at the trade show which concluded on March 11.

China has become the largest manufacturing country of construction equipment in the world, and Chinese manufacturers are the world's leading suppliers of concrete machinery, cranes, excavators, loaders and road rollers, he said.

Last year, China's exports of construction machinery reached $12.5 billion, in contrast to $1.56 billion in 2001.

"In the past decade, Chinese manufacturers have achieved rapid growth," said Hu Xiangyang, deputy general manager of Xuzhou Construction Machinery Group (XCMG).

"Ten years ago, industry leaders like Caterpillar and Liebherr seemed high up and beyond reach, but now I believe XCMG and other Chinese manufactures have become their competitors, with quality products and competitive prices," he said.

International brands of excavators accounted for 95 percent of the Chinese market 10 years ago. In recent years, Chinese brand excavators have improved in quality with market share exceeding 50 percent and volume exports, according to CCMA.

Hu said his company's excavators have received positive feedback from the mainstream market in the US in the past three years. This year, the company plans to build a greenfield facility in the US and expects to start manufacturing excavators this year.

"President Trump has called for $1 trillion in infrastructure investment over 1o years, but the extent to which it will be financed by the private sector or by new, additional federal funding remains unclear," said Jiang Yonghua, managing director of China/US cross-border deals at PwC US.

This means increased partnerships, investment and growth opportunities for companies across sectors, such as engineering and construction, despite recent political headwinds, he said.

"Outbound investments (from China), which are considered to be strategic in nature, will continue to be encouraged," said Jiang. "Overall we think the outbound M&A will decline somewhat from its 2016 peak but will continue to grow to new record levels by 2018."

The US market is mature and has great potential for construction machinery, said Hu. "The US will step up investment in infrastructure to increase jobs and deliver his (Donald Trump) campaign promises, so we think it's an opportune time for XCMG to expand our presence in the US," he added.

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