《机械装备在后危机时代的黄金机遇》

Golden post-crisis opportunity in machinery and equipment

By Han Tianyang and Zhou Qing (China Daily)

Hunan province has decided to take a new pathway to industrialization, along which machinery and equipment upgrades will be major signposts.

For the 12th Five-Year Plan (2011-2015), the provincial government came up with an ambitious plan to achieve 1 trillion yuan ($154 billion) in revenue in machinery and equipment industry in 2015.

It has said it believes that Hunan has a solid foundation for exactly this. In 2007, machinery and equipment production and sales went above the 100-billion-yuan mark, the first industry to do so.

Since then, the industry has reported 100 billion yuan in growth every year in both sales and production. In 2010, both exceeded 400 billion yuan.

The yearly increase is about 41 percent, or far more than the average across all industries in the province. It is also much faster than the provincial GDP growth.

At the same time, some major enterprises are getting bigger and stronger, which could aid the machinery and equipment business, local officials have said.

Four years ago, when the sector's output value passed the 100 billion yuan threshold, the Zoomlion Heavy Industry Science & Technology Development Co and Sany Group both did 10 billion yuan worth of production and sales. Three years later, both has made a great leap forward, to 50 billion yuan in production and sales.

Innovation is one of the key factors in industrial development, local officials have said.

Over the past few years, Hunan saw many new products, including the 9,600kW electric locomotive, a 5-megawatt wind turbine, a 1,000-ton all-terrain motorized crane, and a 1,600-ton caterpillar crane. These greatly improved its competitiveness in the machinery industry.

Mei Kebao, deputy provincial Party secretary, said that Hunan's machinery and equipment have stared a golden post-crisis opportunity, as the global economy adjusts and more industries shift to developing countries.

Mei noted that the central and provincial governments both have preferential policies for equipment manufacturers and that helps a lot.

In addition, local economic development, urbanization and agricultural moderation will work together to turn the sector into a 1-trillion yuan industry, he said.

Nonetheless, according to Mei, they still face challenges since China's machinery is still in the middle or at the lower end of the international industrial value chain.

Also, many other provinces have picked equipment manufacturing as a pillar industry - so, the competition is going to be fierce.

(China Daily 06/01/2011 page36）