Can Construction Machinery Conquer the Trend of Urbanization?

The sluggish market, high accounts receivable and high inventory have become the three major ills that have jeopardized the development of the construction machinery industry. High-speed rail, real estate, and infrastructure construction have pushed the construction machinery industry through one difficulty after another. Can we now resort to urbanization to recur?

According to Hong Xiaoming, vice president and chief financial officer of Zoomlion, real estate investment is the main driving force driving the sales of construction machinery. Under the circumstances where real estate control policies cannot be greatly relaxed, real estate investment growth rebound is limited; the amount of construction machinery has reached A certain scale, the current main product operating rate is insufficient, with the improvement of the downstream industry, the first to drive the increase in the use of existing equipment. However, Hong Xiaoming believes that in the long run, the construction machinery industry is still a “not going down” industry. In the past 30 years, China has taken a road of rapid urbanization. By 2011, China’s urbanization rate has exceeded 50% to reach 51.27%, but even so, China’s urbanization is still very high compared with developed countries. Big gap. By 2020, the level of urbanization in China will strive to reach around 60%. The state puts forward a strategy for urbanization that will surely promote the development of urbanization and infrastructure projects. This will make China's construction machinery industry at least 10 years of development.

Former Nobel Prize winner in economics and former World Bank deputy director Stiglitz once said, "China's urbanization and American high-tech development will be two major events that will affect the human development process in the 21st century. ”

In China, in order to emphasize the coordinated development of cities, rural areas, large cities and towns, and small towns, we call this change of human settlement patterns, employment patterns, and communication patterns “urbanization.” Urbanization means urbanization, which involves major social changes from the transition from small-scale peasant economy to industrial economy, from self-sufficient economy to open economy, and from low technology content to new technology revolution. In 2011, the urbanization rate in China exceeded 50% for the first time, reaching 51.27%. It is estimated that by 2020, the level of urbanization in China will reach around 60%. This figure means that the rural-urban structure that has dominated China for thousands of years will fundamentally change. This is similar to the saying that “the ancestors had three generations of poor peasants” in the Cultural Revolution, or will truly become history.

The National People's Congress Standing Committee and Vice Chairman of the Democratic National Construction Center Yu Shengzhan said: "China's urbanization will be China's largest potential domestic demand and enduring driving force." As a typical investment-driven industry, the speed and growth space for the urbanization process will determine the construction machinery. The future development prospects of the industry.

Although there are still many debates in the academia on the mode of urbanization, there is an undeniable phenomenon that with the rapid increase in the number of people entering the city, the demand for housing and comprehensive facilities is also rising. According to relevant data, the rate of urbanization increases by one percentage point, the rural population influx into the city will increase by 13 million (calculated by 1.3 billion people in the country) and drive 6.6 trillion yuan in urban construction investment. In accordance with the general laws, the purchase of construction construction accounted for 4% to 8% of the investment in the construction of new projects, so that the market prospects for construction machinery are fairly broad.

Specifically, the urban infrastructure construction includes the construction of energy facilities such as electricity, gas, and natural gas; the construction of water supply and drainage facilities for waterworks, drainage and sewage treatment; and the construction of transportation facilities for aviation, railways, expressways, tunnels, and bridges, and mobile phones. The construction of postal and telecommunication facilities such as the Internet, the construction of environmental protection facilities such as landscaping, and the construction of disaster prevention facilities such as fire fighting, flood prevention, and earthquake prevention. The construction of urban infrastructure projects will directly drive the rapid growth of such sub-sectors as road machinery, earth-moving machinery, lifting machinery, concrete machinery, and sanitation machinery.

Although the process of urbanization is as strong as a needle, it has provided confidence for the development of the construction machinery industry. However, it should be noted that urbanization is a long-term project, and it is full of development and envy, lineage and change, opportunities and challenges. Historically, only urbanization rates have increased from 30% to 60%. The United Kingdom spent 180 years, the United States spent 90 years, Japan spent 60 years, and China needs at least 30 years. Therefore, it is particularly important for construction machinery companies to use urbanization as an important basis for enterprises to formulate development strategies.