The mining industry, which uses construction machinery heavily, is seeing heigtened activity due to price rise.
Zeng Guangan, president of Guangxi Liugong Group, a major Chinese construction machinery maker, said the international price rise in commodities like coal, metals, ferrous metals and nonferrous metals has stimulated sales of excavators and other types of construction machinery, especially in cities such as Tangshan in Hebei province and Panzhihua in Sichuan province.
An interesting fallout of rising labor cost has been the shift to smaller machinery.
"The (Chinese) government's ongoing efforts to tackle pollution and build sustainable agricultural and forestry facilities have all saved the industry; and the rise in labor cost will also boost the demand for smaller construction machinery throughout the country," said Zeng.
Technological breakthroughs at home are spurring glad tidings too. "Domestic machinery manufacturers have made notable technological breakthroughs in terms of product life cycle, durability, new materials and hydraulic technology," said Sun Changjun, vice-president of Hunan-based Zoomlion Heavy Industry Science and Technology Co.
These achievements will help them to supply products to big-ticket projects like smart cities, nuclear power plants, ultra-high-voltage supply lines, hydro-electric plants and wind power farms.
Such demand is particularly strong in fast-growing markets such as Saudi Arabia, Ethiopia, Kenya, Angola and Brazil.
Chen Bin, executive vice-president of the China Machinery Industry Federation, said Chinese construction machinery makers have already shifted their focus from selling their products to developing markets through dealerships to building after-sales service centers and staff training centers overseas.
For good measure, they are also printing user manuals in French, Portuguese and Russian.
"As many developed countries adopted trade protectionism measures to protect their own industries, diversifying market channels in countries and regions participating in the Belt and Road Initiative can help companies ease export pressure," said Chen.
Zhao Chi, secretary-general of the CMIF, said: "Strengthening the dealership network in markets involved in the Belt and Road Initiative can be another effective way to cut financial risk in many emerging markets. Foreign dealers partnering Chinese companies are familiar with both market environment and customers. They are both out to make a profit, and they want a return on their investment as soon as possible."
He said Chinese companies, in order to be successful, need to build logistics and after-sales service centers in emerging markets, especially in Africa, Southeast Asia and Latin America.
Zhao Ying, a researcher at the Beijing-based Institute of Industrial Economics, which is part of the Chinese Academy of Social Sciences, said even though more than 80 percent of the domestic market share is held by Chinese manufacturers, foreign companies have already entered China's lower-tier markets through diversified and affordable product categories, customer-friendly dealerships and world-class after-sales service.
For instance, Hitachi's 100-strong team at its Hefei plant in Anhui province offer customized services to Chinese clients across the country. This, industry insiders said, helped the Japanese company to build a stronger valuechain.
"China's construction machinery producers are gradually losing their low-cost labor advantage and do not yet have the best technologies to lead the industry on a global scale. Chinese companies must act quickly to retain their domestic market lead," said Zhao of the IIE.
More than 40,000 machines are used on a rental basis currently. This indicates potential for fast growth of aerial work platform, or AWP, in the China market, said Yin Xiaoli, deputy secretary-general of the CCMA.
The industry's leading players agree the size of China's AWP rental fleet will grow tenfold by 2025 as they seek new growth points.
"However, the nature of future competition between large scale companies and specialized manufacturers, and the division between domestic companies and global brands, is still not clear," Yin said.
