China's Plans Good For Construction-Equipment Manufacturers

Despite economic turmoil in many Asian nations, China remains a land of opportunities for construction-equipment manufacturers. So says the Construction Industry Manufacturers Assn. (CIMA), which reports that China is expected to continue investing in its infrastructure and public utilities, thus driving demand for construction equipment. Gao Yongsheng, managing director of CIMA's Beijing, China office detailed reasons for the optimistic outlook during a recent seminar. Yongsheng served in the Chinese Ministry of the Machinery Industry for more than 40 years and established its construction machinery division. According to Gao, China has budgeted about $1.8 trillion for the construction of railways, highways, power stations, water conservation, municipal works, and environmental protection projections. Its ambitious infrastructure plans include 300,000 kilometers of highway between 1998 and 2010; 170 airports by 2010; accelerated railways construction through 2002, with a cumulative investment of $31 billion; and 110 power-generation facilities by 2002. Even if reality does not quite meet China's ambitious plans, opportunities for construction-equipment manufacturers still abound. According to CIMA, demand for construction machinery has increased along with the increasing construction. The total market value of construction equipment should top $4 billion in 1998. Construction equipment imports accounted for 36% of total sales volume of construction equipment in 1997, with U.S. equipment accounting for about 15% of the total import market. Gao predicts that local-made products will meet only 50% to 60% of market demand in numerous categories of equipment through 2000, including ready-mixed concrete machinery, road surface machinery, container forklift and handling machinery, tunneling machine and rock drilling equipment, and aerial work platforms.