The relevant person of the Ministry of Commerce disclosed at a recent press conference that in 2012, China’s foreign contracted engineering business had achieved a turnover of 116.6 billion U.S. dollars, an increase of 12.7% year-on-year; the newly signed contract value was 156.53 billion U.S. dollars, an increase of 10% year-on-year. In the first quarter of this year, China's foreign contracted engineering business achieved a turnover of 25.2 billion U.S. dollars, an increase of 21% year-on-year; newly signed contracts amounted to 40.1 billion U.S. dollars, an increase of 35% year-on-year. The number of projects with a new contract value of more than 50 million U.S. dollars was 171, with a total amount of 31.2 billion U.S. dollars, accounting for 78% of the total value of newly-signed contracts.

These data from the Ministry of Commerce have been a strong testimony - China's enterprises are accelerating the pace of "sea", and contracting projects are more large-scale, more complex and comprehensive. According to statistics from the China Overseas Contracting Engineering Chamber of Commerce, 80% of Chinese enterprises’ overseas contracting and bidding projects last year took the form of construction general contracting and “turnkey” projects. Last year, 52 Chinese companies were included in the "Engineering News Record" ranking of the world's largest 225 international contractors.

Each year, hundreds of billions of dollars of overseas engineering markets and one hundred billion yuan in exports of construction machinery (more than one hundred billion yuan in exports in 2012) have brought about fruitful results for the company and also put the company at risk.

Domestic construction machinery has been widely recognized

As the earliest participant and witness of China's “going out”, the development of China’s road and bridge was accompanied by the growth of Chinese enterprises’ “going out”. It is understood that at present, China Luqiao has offices in more than 50 countries, and companies have developed from traditional Africa and Asia to Central and Eastern Europe and Latin America. “In the early 1980s, we implemented projects in Iraq, and all the equipment used to build bridges and roads was imported. Bulldozers used Komatsu Japan, heavy trucks used Volvo, and cranes were also Japanese brands. Almost all of them are world famous construction machinery manufacturers. Since the mid-1990s, we have begun to try to use domestically-made equipment such as road rollers and bulldozers produced by Xugong.” Looking back on the past, Lu Shan has a lot of emotion.

It is understood that since the beginning of the new century, along with the rapid rise of a number of new domestic construction machinery companies, such as Zoomlion, more and more domestic brand equipment has been used in China's roads and bridges. From the previous use of imported equipment to the mid-90s to try to use domestic equipment, the proportion of domestically produced equipment has reached 70%. The 30 years of development of China Road and Bridge witnessed the growth of China's equipment manufacturing industry. “Now, we not only use our own domestic equipment, but also purchase it on behalf of the owners. In 2008, we purchased 40 million U.S. dollars worth of Xugong equipment for Angola; in 2012, we purchased more than 30 million yuan worth of equipment for the Belarus project. Now, the project uses Trucks are almost all of China National Heavy Duty Truck and Shaanxi Auto.” Lu Shan emphasized that the domestic construction machinery manufacturing industry has been widely recognized by engineering contractors through technology import and absorption.

Overseas equipment procurement and demand growth in emerging countries

Turkey has become an important transportation hub connecting Asia and Europe because of its special geographical location and with the increasingly close contacts between Asia and Europe. Therefore, in order to meet new needs, the Turkish government has announced that there will be multiple worlds in the next few years. The level of the project will start, for example, Istanbul will build the world's largest new airport (after the completion of all expected passenger capacity will reach 150 million passengers). The Turkish government has also recently announced that it will invest 6 billion U.S. dollars to start the canal project that connects the Black Sea and the Aegean Sea.

India plans to increase its domestic infrastructure investment in 2012-2017 and expects to spend 1 trillion US dollars for this purpose. Because India's economic index has been developing at a high level in recent years, and its domestic supporting construction and engineering-related manufacturing industries are developing relatively slowly, currently only about 28% of India's local machinery can adapt to the domestic market. India's construction requires more overseas equipment intervention. As a large engineering machinery neighboring India, China not only provides cost-effective products, but also has a geographical advantage. Using this advantage, China can supply equipment to India more than twice as long as Europe and the United States (from the order to the site). .

As one of the BRIC countries, Brazil’s government’s annual investment in infrastructure investment in GDP has dropped from 3.6% to 1% over the past 30 years, resulting in a serious lag in Brazil’s construction of electricity (quotations area), ports, transportation, and people’s livelihood. With regard to its own pace of development, this situation has on the one hand limited the sustainable development of the economy and on the other hand has brought inconvenience to the life of the Brazilian people. In order to change this situation, Brazil has created a frenzy of “infrastructure”. In 2012, the total investment for various infrastructure projects reached 480 billion U.S. dollars, including energy projects with a total investment of 232 billion U.S. dollars, housing projects worth 140 billion U.S. dollars, and transportation projects worth 52 billion U.S. dollars, as well as key projects in other areas such as urban transformation and water quality improvement. In addition, as one of the countries with the most potential for development in the world, Brazil has unlimited future market size (currently, Brazil's construction machinery market accounts for 3.5% of global sales, and Latin America accounts for 40%). .

At present, although the total demand for construction machinery in emerging countries is still relatively limited, due to the general lack of domestic infrastructure, the demand for related auxiliary products will inevitably rise steadily in the future, while the domestic manufacturing industry will not be able to meet its own needs in a short period of time. Therefore, this will be a rare opportunity for Chinese engineering machinery companies eager to step out of the difficulties.

China's construction machinery overseas hardship road

In the past two years, after the “cold ice period,” construction machinery suffered no recovery after the “cold ice period”. With the continuous decline in the sales volume of construction machinery, the sound of warming up and down has not yet really recovered. With the growth of domestic infrastructure projects, Slowing down, and the negation of economic stimulus plans by relevant state agencies, the expansion of overseas markets has become the only “road to birth” for construction machinery. Due to various reasons, overseas roads for construction machinery in China are also thorny.

Judging from the international environment and the domestic market, the foreign trade situation of construction machinery products is not optimistic. In 2013, there may be slight increase or even level. In order to achieve certain political goals, Japan has established a capital in Africa, 32 billion U.S. dollars has aided Africa, and Japan’s large trading companies have also been striving to expand the sales of construction machinery. Japanese companies that entered the African market have started to move and are trying to catch up. The devaluation of the yen has also contributed to Japan’s competition with China in overseas markets.

Recently, Europe, which has always pinned its hope for recovery on China, has also recently issued some discordant voices. The EU launched an anti-dumping policy against China's photovoltaic industry, and China subsequently launched anti-dumping investigations on EU wines and other products. After the Dragon Boat Festival, the rise of China-EU trade war will inevitably cause China's overseas trade to face more trade barriers.

Recently, with the significant appreciation of the renminbi, the export of construction machinery in China has been severely impacted. The appreciation of the renminbi has caused the company to suffer a two-way attack of cost and profit, which has led to a decline in the export profits of enterprises and a blow to the enthusiasm of the enterprises' exports. This has caused certain de-stocking of construction machinery. Impact; On the other hand, the appreciation of the renminbi also weakened the "Made in China" price advantage, making Chinese construction machinery less competitive in overseas markets.