China's Economy Normalizes at Medium-High Growth

The report proposes that the Chinese economy is currently transitioning from 'high-speed' to 'medium-high speed' growth. In 2008, it manifested as a short-term cyclical downturn characterized by insufficient effective demand under the impact of the crisis. However, marked by 2013, this growth rate transition has become a structural and phased long-term cyclical downturn, 'that is, it has evolved from cyclical fluctuations mainly due to insufficient demand to cyclical fluctuations due to supply constraints, so the medium-high growth rate will become normal.'

In the 'Economic Blue Book' recently released by the Chinese Academy of Sciences, it is pointed out that fixed asset investment in the whole society will exceed 45 trillion yuan, with a nominal growth of 20.4% and a real growth of 19.2%, continuing to maintain steady and rapid growth. In 2013, exports and imports are expected to increase by 8.7% and 7.5% respectively, with a trade surplus of around 270 billion US dollars. In 2014, China is mainly in a period of strategic opportunities, and it is expected that China's GDP will grow by about 7.5% in 2014, continuing to remain within a reasonable range of economic operation.

Strong Signals of Recovery in Construction Machinery Industry

Recently, the China Manufacturing Purchasing Managers' Index (PMI) released by the Service Industry Survey Center of the National Bureau of Statistics and the China Federation of Logistics and Purchasing shows that in November 2013, China's manufacturing PMI was 51.4%, unchanged from the previous month and above the critical point for 14 consecutive months. Zhao Qinghe, a senior statistician at the Service Industry Survey Center of the National Bureau of Statistics, said that since the beginning of this year, with the implementation and effectiveness of the central government's measures to stabilize growth, adjust structure, and promote reform, the production and operation environment of enterprises has gradually improved, and the manufacturing industry has continued to improve steadily.

In addition, industry data also shows that in October 2013, excavator sales in the industry were 7,537 units, a year-on-year increase of 23.7% and a month-on-month increase of 8.9%. From January to October, cumulative excavator sales were 97,935 units, a year-on-year decrease of 6.6%, narrowing by 1.8 percentage points from the 8.4% decline in January-September. From the perspective of product structure, in October, large excavators, medium excavators, and small excavators increased by 57%, 15.6%, and 30.2% year-on-year respectively. From January to October, small excavators increased by 3.1% year-on-year, while medium and large excavators decreased by 4.0% and 36.8% year-on-year respectively.

The impact of the national stabilizing growth policy on the development of the construction machinery industry is gradually emerging. A long-term stable macroeconomic environment can be expected, and the construction machinery industry will gradually embark on a path of stable development. In fact, recently there have been continuous favorable developments in fields such as high-speed rail, highways, railways, urban rail transit, and municipal construction in China, providing certain support for the demand for construction machinery. It is expected that the construction machinery market will not continue to decline in the future, and a gradual moderate recovery will be the development trend.