Recently, foreign media reported that President Xi Jinping is awakening China, and China is ushering in a new era. This view has resonated strongly with public opinion and all sectors of society.
When President Xi Jinping attended the commemorative meeting marking the 50th anniversary of the establishment of diplomatic relations between China and France in Paris on March 27 and delivered an important speech, he quoted Napoleon's words: “China is a sleeping lion. When this sleeping lion wakes up, the world will tremble.” He pointed out that today this lion in China has already awakened, but it is a peaceful, amiable and civilized lion.
As a practitioner in the construction machinery industry, in the process of China moving toward the “road of rejuvenation,” what the editor is more concerned about at present is whether the large amount of Chinese investment brought by President Xi Jinping during his frequent visits to various countries, and the deep-level cooperation opportunities in fields such as “mineral resources development and infrastructure construction” from countries in Asia, Africa and Latin America, can bring a new round of development opportunities to China's construction machinery industry during its trough period. What new prospects will overseas expansion of construction machinery usher in?
What new prospects will overseas expansion of construction machinery usher in?
Take President Xi's current state visit to Mongolia (August 21 to 22) as an example. The most closely watched aspect of this visit is the economic and trade cooperation to be carried out with Mongolia in coal, minerals and other fields. It is reported that the two sides will further clarify the economic and trade cooperation approach of “integrating mineral resources development, infrastructure construction and financial cooperation and advancing them in a coordinated manner,” with connectivity and cooperation on major mining and energy projects as priority directions, so as to push practical cooperation between the two countries to new breakthroughs.
The editor of China Construction Machinery Business Network has learned that China's main investment industries in Mongolia include mineral resources exploration and mining, trade and catering services, construction engineering and building materials production, livestock product processing, food production, etc. In particular, China and Mongolia have good cooperation in mining exploration, development and deep processing of mineral products. Mining investment accounts for as much as 51% of China's total investment in Mongolia. As of January this year, a total of 445 Chinese-funded enterprises were engaged in investment and operations in the mineral sector in Mongolia. Therefore, it can be expected that for the construction machinery industry, which is closely related to mining, this visit will undoubtedly open an important channel for Chinese construction machinery enterprises to enter Mongolia.
Data show that in the first six months of this year, the total import and export value of construction machinery products reached US$8.901 billion, down 27.72% year on year. Among this, exports were US$7.291 billion, down 19.05% year on year. However, the export value of complete construction machinery units reached US$6.142 billion, up 1.76% year on year. It can be seen that compared with the continued downturn in the domestic market, construction machinery enterprises have still achieved notable results in developing overseas markets.
Wang Min, chairman of XCMG, once said: “A strong country cannot do without a strong manufacturing industry. China cannot depend on others; it must have its own presentable equipment manufacturing industry. Rapidly achieving globalization and rapidly expanding into international markets is the inevitable path for a national enterprise to succeed.”
To some extent, these words also express the common aspiration of domestic construction machinery giants. On the point of “actively going abroad and making every effort to achieve globalization,” the actions of construction machinery giants are clearly consistent.
In 2013, Sany Heavy Industry's overseas sales revenue reached 10.874 billion yuan, accounting for nearly 30% of total sales revenue, up 24.42% year on year, with business covering more than 110 countries and regions. Zoomlion's overseas revenue in 2013 also reached 3.5 billion yuan, up 26.31% year on year.
Compared with the continuous increase in sales figures, what is even more encouraging in the overseas expansion journey of Chinese construction machinery enterprises is the improvement of their status and the continuous increase in recognition, for example, the world's three major concrete machinery giants have successively been acquired by China's three giants.
In 2014, the overseas performance of China's construction machinery giants has also been outstanding, with many highlights and each showing its own strengths——
In June, XCMG exported 300 cranes to West Asia, North Africa and Central Asia, becoming the largest batch order for crane exports in the entire industry this year. At the same time, XCMG's first wholly owned overseas production base——the XCMG Brazil manufacturing base——was completed and put into operation, marking an important advance in XCMG's internationalization strategy.
On July 15, Sany Group's affiliated company in the United States, Ralls, obtained a ruling in the case concerning the Oregon wind farm project in which it was prohibited from suing the Committee on Foreign Investment in the United States (“CFIUS”) and President Obama. “Obama's presidential order has legally become invalid. In this sense, Sany achieved a complete victory.”
In the view of Xiang Wenbo, president of Sany Heavy Industry, the US wind farm project case involved only US$6 million and was a very small investment in the overall US investment plan, but “the case is small while its impact is large, because the US market is very important to Sany. In the future we will have even larger investments, and this obstacle cannot be bypassed.” Therefore, this victory can be said to have cleared the obstacle for Sany's continued investment in the United States.
On August 8, Zoomlion acquired the Dutch company Raxtar (hereinafter referred to as “Raxtar”), aiming to become the world's largest construction hoist enterprise. Raxtar is a leading global hoist company and ranks first in the Netherlands. Its products cover construction hoists, transport platforms, goods lifts and industrial elevators, and its products are mainly sold in Europe and North America. Its “representative works” include projects such as the World Trade Center in New York and Carnegie Hall.
“Every year I look at dozens of companies around the world. As long as there is a suitable target and a suitable opportunity, we will make a move (acquisition),” said Zhan Chunxin, chairman of Zoomlion. Undoubtedly, bringing international giants under its wing is the best demonstration of a company's strength and an important breakthrough in its overseas expansion.
Once upon a time, weak Chinese construction machinery enterprises had to depend on others and struggle to survive even in their own small home market. Today, as their strength grows day by day, China's construction machinery giants increasingly have a voice on a global scale. The lion has awakened. As China moves along the road of rejuvenation, China's international development cooperation will surely become increasingly close. In this process, Chinese construction machinery enterprises will also surely usher in broader development space in overseas markets.
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