What is the reason for China's construction machinery manufacturing to become the world's

In the 2021 Global Top 50 Construction Machinery Manufacturers list, 11 Chinese construction machinery companies made it to the list, with sales reaching 50.733 billion US dollars, ranking first in the world.

01

Construction machinery is a vital tool of the country

Engineering machinery is an important component of the equipment industry. All mechanical equipment necessary for comprehensive mechanized construction projects such as earthwork construction, road construction and maintenance, mobile lifting and loading operations, and various construction projects are called engineering machinery.

Engineering machinery has a wide range of classifications and application scenarios, involving national defense, mining, infrastructure construction, road maintenance, etc. In summary, it can be divided into 20 categories such as lifting machinery, excavation machinery, and digging machinery, as shown in the following figure:

During the period of 1961-1978, the Engineering Machinery Bureau and the Engineering Machinery Research Institute were established one after another. Since the official start of China's construction machinery industry, after decades of development, the overall strength of the industry has reached a global leading level. In April 2021, China Construction Machinery magazine and the organizing committee of the Global Top 50 Construction Machinery Summit jointly released the "2021 Global Top 50 Construction Machinery Manufacturers" On the list, there are 11 construction machinery companies from China, with sales reaching 50.733 billion US dollars, ranking first in the world.

02

China's 6 major construction machinery towns

At present, China's construction machinery has formed six major production centers, namely Xuzhou, Changsha, Changzhou, Jining, Liuzhou, and Xiamen.

1. Xuzhou

From March 22 to March 29, 2021, the Ministry of Industry and Information Technology announced the list of winners of the National Advanced Manufacturing Cluster Competition finals. The construction machinery cluster in Xuzhou City, Jiangsu Province has entered the list of winners in the first batch of advanced manufacturing cluster competition finals.

In 2010, Xuzhou was awarded the title of "Capital of Construction Machinery in China". Currently, there are over 1200 construction machinery enterprises in Xuzhou, covering the entire industry chain including 20 industrial categories of construction machinery. The output value growth rate during the 13th Five Year Plan period has remained above 10%, making it one of the two major clusters of China's construction machinery industry with a hundred billion yuan club.

XCMG Group, with a main revenue of over 100 billion yuan, is a banner of China's engineering machinery manufacturing and the most comprehensive engineering machinery enterprise in terms of categories. In terms of global enterprise aggregation, Caterpillar (Xuzhou) has built the only super large excavator production base in the world, and more than 20 world-renowned construction machinery enterprises such as ThyssenKrupp, Liebherr, and Blanken have settled in Xuzhou.

In addition to leading enterprises, a group of "hidden champions" are also thriving. Seven enterprises, including XCMG Heavy Duty, XCMG Suiche, XCMG Foundation, and XCMG Road Construction, have been rated as national manufacturing industry single champion enterprises (products). Yunyi Electric and Xuzhou Selke Co., Ltd. have been awarded the title of National Specialized, Refined, Unique and New "Little Giant" Enterprises.

2. Changsha

Changsha Construction Machinery has a total of 12 major categories, over 100 subcategories, and nearly 500 model specifications of mainframe products, covering 70% of the national construction machinery varieties. It is one of the two major clusters of China's construction machinery industry, with a total output value exceeding 250 billion yuan, a year-on-year increase of nearly 30%. Its scale has ranked first in the country for 10 consecutive years, and Changsha occupies 3 of the top 5 domestic construction machinery brands.

Sany Group, Zoomlion Heavy Industry Science and Technology Co., Ltd., and Changsha Construction Machinery Co., Ltd. are the four leading companies in different fields of the construction machinery market. Sany Group is the enterprise with the highest market value in China's construction machinery industry. Its concrete machinery, Zoomlion Construction Crane Machinery, Railway Construction Heavy Industry large-diameter full section hard rock tunnel boring machine, Shanhe Intelligent Static Pile Driving Machine have the world's largest market share, and its cluster concrete pump trucks, cranes, and excavators have the highest production and sales in the country.

In addition, with the growth and strengthening of large leading enterprises and the active construction of upstream and downstream innovation cooperation systems, a large number of small and medium-sized supporting and service enterprises such as design, research and development, manufacturing, testing, and post market services have gathered in the industrial chain, forming a collaborative, open and integrated industrial cluster with 416 cluster enterprises.

3. Changzhou

Changzhou's engineering machinery products cover excavators, loaders, rollers, graders, excavator loaders, road maintenance machinery, large tonnage dump trucks, aerial work platforms, gantry cranes, mining vehicles, as well as key supporting components such as casting and forging, structures, transmissions, and hydraulics.

In 2020, enterprises above designated size in the construction machinery industry in Changzhou achieved an output value of 28.43 billion yuan, a year-on-year increase of 17.4%, and produced a total of 29265 excavators, accounting for about 9% of the country's total. From January to April 2021, the completed output value was 11.16 billion yuan, a year-on-year increase of 33.5%.

Starting from 1994, the company successively established "Changzhou Modern Engineering Machinery Co., Ltd." and "Modern (Jiangsu) Engineering Machinery Co., Ltd." as joint ventures with Hyundai Heavy Industries of South Korea, and "Komatsu (Changzhou) Engineering Machinery Co., Ltd." as joint ventures with Komatsu Manufacturing Co., Ltd. of Japan. The total investment of the three joint ventures is 266.98 million US dollars, with a registered capital of 120 million US dollars. They produce engineering machinery products such as excavators, large tonnage loaders, and dump trucks with international advanced level. After the products are put into the market, their sales rank among the top in the industry.

4. Jining

Jining is one of the important bases for the production and export of construction machinery in China, as well as the location of Shantui, a leading enterprise in the Chinese bulldozer industry. It is also home to joint ventures in China, such as Komatsu, the world's second largest construction machinery group, and Eaton, one of the world's largest hydraulic component companies.

Data shows that in 2017, Jining produced 4000 bulldozers, 3700 hydraulic excavators, 4500 road machinery, 600 mixing plants, 150000 track assemblies, 80000 hydraulic torque converters, 20000 gearboxes, 1 million "four-wheel" construction machinery, 20000 Haohan heavy-duty trucks, 153000 specialized vehicles, 12 million sets of tires, 30000 large and medium-sized tractors, 10000 harvesting machinery, and 50000 farming machinery.

Jining has currently formed a relatively prosperous and active construction machinery industry cluster in China. Leading enterprises include large leading enterprises such as Shantui, Komatsu, and Liugong, forming a cluster of small and medium-sized construction machinery enterprises and supporting suppliers with unique characteristics that extend upstream and downstream production of secondary accessories.

5. Liuzhou

Liuzhou Industrial Machinery started in 1958 and currently gathers more than 300 machinery manufacturing enterprises, including Liugong. In 2018, LiuGong celebrated its 60th anniversary with a revenue of 21.6 billion yuan, a year-on-year increase of 39.6%. From January to July 2021, Liuzhou construction machinery achieved a total output value of 18.85 billion yuan, a year-on-year increase of 9%. It has formed multiple industries including general equipment manufacturing, specialized equipment manufacturing, and electrical machinery and equipment manufacturing. Its leading products include Liuzhou brand loaders, hydraulic excavators, rollers, OVM anchoring systems, oil pumps, jacks, air compressors, injection molding machines, and more than 200 varieties in more than 30 categories.

Liugong is a top 500 manufacturing enterprise in China, the first listed company in the domestic construction machinery industry and Guangxi, and also the first manufacturer of wheel loaders. At present, the leading products include wheel loaders, crawler hydraulic excavators, rollers, medium to large tonnage forklifts, road machinery products such as asphalt pavers, graders, milling machines, and road mixers, as well as flexible and versatile small product series such as skid steer loaders and excavator loaders.

6. Xiamen

Xiamen, relying on Xiamen Industrial Group, has formed an industrial cluster consisting of key enterprises such as Linde (Xiamen) Forklift, Xiazhuang, Xiaxin, Xiajia, Xiasheng, Xialu, Xiamen Sanjiale, Xiamen Gear Factory, and Xiamen Yinhua Machinery Factory.

Xiagong Company has over 130 distribution and service providers and nearly 300 sales and service outlets worldwide, and has won numerous honorary titles such as "Top 50 Chinese Construction Machinery Manufacturers", "Top 50 Global Construction Machinery Manufacturers", "National Civilized Unit in the Machinery Industry", "Equipment China Meritorious Enterprise", and "Advanced Collective in China's Extreme Inspection".

At the same time, Xiamen University has cooperated with domestic and foreign research institutions such as Jilin University, Zhejiang University, Xiamen University, Jimei University, Huaqiao University, China Academy of Mechanical Sciences, and Tianjin Engineering Machinery Research Institute to strengthen the company's technical capabilities.

03

Conclusion

From poverty and backwardness in the early days of the founding of the People's Republic of China to the beginning in the 1970s and 1980s, China's construction machinery industry has gradually developed from scratch and from existence to excellence after decades of development, occupying an increasingly important position in the global market, and its products are exported overseas. At the same time, we should also recognize that there is still a risk of supply chain bottlenecks for some core components such as high-end hydraulic parts, high-end chassis, large tonnage engines, controllers, sensors, etc. However, under the leadership of leading enterprises such as Sany Heavy Industry and XCMG, the degree of self-sufficiency of core components is increasing. With the promotion of the "the Belt and Road", the impact of China's construction machinery in the world will be further enhanced.