The building equipment produced in China includes a great variety of purpose-built machinery. Alongside diggers, construction cranes and loaders, there is also railroad construction equipment, various-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 machinery market soared by 30%. Still, despite the tremendous boost, some analysts do not consider the Chinese market a profitable sector to invest in due to the low price for the machinery made in China. The cost of the Chinese machinery is less than 50 – 150 % of the price for machinery made overseas, which attracts a lot of Chinese customers. CHINESE BUILDING EQUIPMENT AND FOREIGN CAPITALNowadays foreign enterprises choose to cooperate closely with Chinese producers.
The majority of the flourishing manufacturers of construction machinery brought their own brands to China. Time passed they started to cooperate with their Chinese partners. This business strategy helps foreign producers have a better look at the Chinese building machinery sector and insure the sales of their production but under a different 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 manufacturers that did not manage to enter into an agreement with foreign business counterparts were knocked out of the competition. The close cooperation between Chinese companies and their foreign partners has turned out very profitable for both parties. For instance, two big producers Zoomlion and SANY made around $2, 86 billion last year. Besides, Zoomlion has bought the European company CIFA and, therefore, has become the most influential producer and supplier of concrete mixers in the world.Lately the the sales of the Chinese construction machinery on the world’s market have reduced, mostly due to the decline in the demand for building machinery on the leading 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 states have stopped the development some big construction projects due to the economic nosedive, which has led to the decline in the demand. A number of preventive measures have been taken in Russia to shield Russian manufacturers from the influx of the Chinese export. So, during the coming years Chinese manufacturers will be producing machinery mainly for the domestic market, at least until the world’s economic nosedive ends. China’s government has given a $570-billion aid to the sector.
Yet, the money will not be enough for all manufacturing enterprises and they look forward to mergers and takeovers with foreign manufacturers.
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