The Chinese Construction Equipment Market Presents Great Opportunities

Construction Equipment Market

Overview

The Chinese construction equipment market presents many opportunities and challenges
to American companies seeking to increase their sales in China. Many American
companies (e.g. Caterpillar, John Deere, and Terex) have successfully entered the
Chinese market and have become key players in China's construction equipment
industry. The rapid growth of fixed asset investment in China is helping to boost growth
in this sector. Yet the macro control measures the Chinese government began to
implement in the second half of 2004 is expected to have a cooling effect on the overall
construction market. Meanwhile, U.S. companies are encountering fierce competition
from Korean, Japanese, European, and as domestic manufacturers.

The best opportunities for U.S. exports of construction equipment include: self-propelled
bulldozers, angle dozers, graders, levelers, scrapers, mechanical shovels, excavators
shovel loaders, tramping machines, and road rollers.

Opportunities

South朜orth Water Diversion Project
The vast South朜orth Water Diversion Project started in 2002. The purpose is to divert
water from the Yangtze River in the south to China's north, where water is in critical
need for agricultural and industrial applications. The project consists of three south-to
north canals, and will cost US$59 billion; when completed in 2010 it will pump about 13
trillion gallons of water to the north every year. The middle route of the three canals is
the most complicated and will provide the most market opportunities for American
construction equipment manufacturers that offer advanced technology. Different types of
equipment are needed for the project, including scrapers, Excavators, vibratory rollers,
dump trucks, truck cranes, etc.

2008 Olympics, Beijing

The Beijing municipal government plans to invest nearly $22 billion in infrastructure
construction for the 2008 Beijing Olympic Games. Main projects include:

Public Transportation:
* 93 kilometers of the fifth ring road
* 35 kilometers of express rail
* 105 kilometers of major roads
* 192 kilometers of railroad
* Subway lines to airport and Green Olympic Park

Airport:
* One new runway
* One new terminal
* 55 standard aircraft parking aprons

World Expo 2010, Shanghai
Shanghai will host the World Expo from May 1 through October 31, 2010. To support
the event, the Shanghai government will invest over US $10 billion in infrastructure
modernization (harbor, airport, city transportation, and cultural facilities). Major projects
include:

Public transportation:
* 270 kilometers of metro lines
* 400 kilometers of road improvement
* One under-river tunnel
* 6300km2 parking space
* Country pavilions in the Expo Park

Airport:
* Two runways
* One new terminal




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