Since July 2010, national leaders have frequently visited equipment manufacturing enterprises and emphasized independent innovation. At the end of the 11th Five Year Plan period and the beginning of the 12th Five Year Plan, through intensive visits and research by the country, we can fully feel the country's attention and high expectations for the development of equipment manufacturing industry. For enterprises in the construction machinery industry, it is particularly important to pay attention to and make good use of current relevant policies in order to achieve their own leapfrog development. Here is an inventory and interpretation of some policies that are currently closely related to the construction machinery industry.
1, National leaders frequently visit equipment manufacturing enterprises
From July 9th to 11th, Hu Jintao, General Secretary of the Communist Party of China Central Committee, President of the People's Republic of China, and Chairman of the Central Military Commission, conducted a work inspection in Henan. Luoyang is an important industrial base in China. President Hu Jintao visited three large construction machinery enterprises in Luoyang, including China Yituo Group Co., Ltd., Luoyang Bearing Holdings Co., Ltd., and CITIC Heavy Industry Machinery Co., Ltd., all of which are equipment manufacturing enterprises. President Hu Jintao hopes that enterprises can continuously enhance their independent innovation capabilities, adapt to new market changes, and comprehensively enhance their competitiveness.
In early July, Wen Jiabao, a member of the Standing Committee of the Political Bureau of the Communist Party of China Central Committee and Premier of the State Council, conducted an investigation and research on economic development in Changsha, Hunan, and presided over a symposium on the economic situation in Hubei, Hunan, and Guangdong provinces. On July 2nd, Premier Wen Jiabao inspected Sany Group and Shanhe Intelligence in Changsha. Affirm independent innovation and encourage development into world-class enterprises. On July 16th, Premier Wen Jiabao visited the Heavy Duty Truck Co., Ltd. under Shaanxi Automobile Group for research. He declared the need to maintain the continuity and stability of macroeconomic policies and encouraged continuous innovation. These three enterprises are also equipment manufacturing enterprises.
Recently, national leaders have visited equipment manufacturing enterprises frequently and emphasized independent innovation, indicating that the country has high hopes for the equipment manufacturing industry. The equipment manufacturing industry bears the heavy responsibility of revitalizing the country and is committed to developing the equipment manufacturing industry to help China overcome the international financial crisis as soon as possible.
2, The revitalization plan for equipment manufacturing industry promotes industrial upgrading
The equipment manufacturing industry is a strategic industry that provides technical equipment for various industries in the national economy. It has a high degree of industrial correlation, strong ability to absorb employment, and intensive technology and capital. It is an important guarantee for industrial upgrading and technological progress in various industries and a concentrated reflection of national comprehensive strength. In order to cope with the impact of the international financial crisis, implement the overall requirements of the Party Central Committee and the State Council on maintaining growth, expanding domestic demand, and adjusting the structure, ensure the stable development of the equipment manufacturing industry, accelerate structural adjustment, enhance independent innovation capabilities, improve the level of autonomy, and promote industrial upgrading, this plan is specially formulated.
On May 12, 2009, the Office of the State Council officially released the plan for the adjustment and revitalization of the equipment manufacturing industry, with a planning period from 2009 to 2011. The plan proposes to maintain the stability of equipment manufacturing production and operation, gradually increase the proportion of added value to the national industrial added value, improve the quality level of domestically produced equipment, and enable several large integrated science, industry, and trade enterprise groups with international competitiveness to form a group of specialized component production enterprises that participate in international division of labor.
The construction machinery industry, as one of the most important sub industries within the scope of equipment manufacturing, will be directly influenced by the development of the equipment manufacturing industry. This revitalization plan will be a "direct benefit" for solving the industrial upgrading, technological progress, market survival of the fittest, and breakthroughs in key component technology bottlenecks in equipment manufacturing related fields such as construction machinery.
3, Regional economic development planning drives the development of the real economy
The 11th Five Year Plan of China (2006-2010) clearly proposes the promotion of regional coordinated development, gradually forming a regional coordinated development pattern with clear positioning of main functions, positive interaction between the east, west, and east, and a narrowing gap between public services and people's living standards.
In the first half of this year, the Liangjiang New Area, the Yangtze River Delta, Qinghai, and even the expansion of Shenzhen and Xiamen Special Economic Zones were successively approved, ushering in a period of intensive release of regional development plans in China. The driving effect of regional development planning on the real economy has been highlighted, and it has now become an important "lever" to promote China's economic development. In regional development planning, infrastructure construction must be one of its main contents, which provides opportunities for the development of the construction machinery industry.
4, New Decade Plan for Western Development: Xinjiang Becomes an Investment Hotspot
This year's Xinjiang regional economic development plan will be a hot and key focus of the Western Development. Since the implementation of China's Western Development Strategy, the western region has undergone earth shaking changes, and infrastructure construction has made breakthrough progress in the first decade. It has not only contributed to the country's economic and social development, but also opened up a wider market space for China's machinery industry. As of 2009, there were a total of 120 newly started key projects in the Western Development of China, with a total investment scale of 2.2 trillion yuan.
From July 5th to 6th, 2010, the China Strategic Planning underwent a new deployment. General Secretary Hu Jintao and Premier Wen Jiabao respectively delivered speeches emphasizing the need to build the western region into an internationally important energy base, resource deep processing base, equipment manufacturing base, and strategic emerging industry base. On July 5, 2010, the National Development and Reform Commission announced that the total investment for this year's Western Development Plan was 682.2 billion yuan, and 23 new key projects for Western Development were started. These 23 new key projects include the construction of new railways, highways, airport expansion and renovation, power construction, coal mine development, water conservancy engineering, etc.
The central government has supported the construction of Xinjiang with billions of yuan, making it a key area for the new decade of western development in China. Currently, many construction machinery industry enterprises have entered the Xinjiang market.
5, New Article 36: Introducing Private Capital to Boost Domestic Demand
After the outbreak of the financial crisis, the country adopted a series of investment policies to stimulate domestic demand and respond to the financial crisis. The "4 trillion yuan" stimulus plan was first introduced in November 2008, followed by the launch of local government financing platforms to expand infrastructure construction such as transportation, electricity, and railways. These measures have enabled China's economy to recover first from the global crisis, but if large-scale investments are made at the national level this year, the risks will be significant and the national finance will be unable to bear them. So the "New 36 Articles" emerged.
On May 13, 2010, the State Council issued the "Several Opinions on Encouraging and Guiding the Healthy Development of Private Investment" (also known as the "New 36 Articles"), promoting private capital to enter several important industries such as infrastructure construction, municipal public utilities, and policy rental housing construction. On the same day, the capital market responded positively, with the Shanghai Composite Index rising by 2.06%. The investment of private funds and the increase in projects will directly increase the demand for construction machinery.
6, Financing leasing platforms ensure the turnover funds of enterprises
It is understood that financial leasing is the second largest debt financing method in the world after bank credit. The penetration rate of financing leasing in economically developed countries and regions such as the United States, Europe, and Japan has reached 10% -30%, while in China it is only 3%. At present, this financial service has been widely utilized in developed regions such as Jiangsu and Zhejiang in China, while it is still in its early stages in other regions. As of the end of 2009, there were 34 financing leasing enterprises in Shanghai, accounting for about a quarter of the country's total. It was not until July 6, 2010, that Chengdu established its first joint venture financing leasing enterprise.
The "financing lease" plan in Shanghai has been submitted to the State Council for approval. Starting from exploring supportive policies such as export tax rebates, corporate income tax, and business tax incentives for ship financing leasing enterprises, we are preparing to extend their application to industries such as aircraft, ships, automobiles, engineering machinery, and large equipment, all of which require financing leasing to support funding.
At present, most of the large domestic construction machinery manufacturers have established financing leasing companies to promote the sales of their equipment, ensure sufficient cash flow, and overcome the difficulties brought about by the financial crisis, achieving sales growth against the trend. In 2009, the total leasing business in China exceeded 280 billion yuan. According to the penetration rate of financial leasing in developed countries and regions, there is still a lot of room for development in China's financial leasing business. Developing financial leasing business is an urgent need for companies in the construction machinery industry to grow their business. The scale of financing leasing business in China is expected to further expand in the future.
7, Remanufacturing promotes green, energy-saving, and environmentally friendly industries
Remanufacturing is an industry that implements high-tech repair and transformation of waste products. It targets damaged or soon to be scrapped components. Based on performance failure analysis, life assessment, and other analysis, remanufacturing engineering design is carried out, using a series of advanced manufacturing technologies to ensure that the quality of remanufactured products meets or exceeds that of new products.
At the end of May 2010, the National Development and Reform Commission and 11 other departments jointly issued the "Opinions on Promoting the Development of the Remanufacturing Industry", and construction machinery emerged as a key area for promoting the development of the remanufacturing industry, such as automotive parts and machine tools. At the on-site exchange meeting on remanufacturing technology and experience held in Beijing on June 11, Xie Zhenhua, deputy director of the National Development and Reform Commission, said that he would use various measures such as the central budget investment to support key remanufacturing projects to expand the scale of the remanufacturing industry.
In order to promote the formation of a large-scale circular economy and cultivate new economic growth points, this year and next, the Development and Reform Commission will work together with relevant departments to formulate the "Development Plan for the Remanufacturing Industry", clarifying the goals, key tasks, and guarantee measures for promoting the healthy development of the remanufacturing industry in China during the 12th Five Year Plan period. China is a major country in equipment manufacturing and usage, with equipment assets reaching trillions of yuan. As China enters the peak period of mechanical equipment scrapping, its advantages in social, resource, and environmental benefits determine that the development of the remanufacturing industry is imperative and has enormous potential.
Based on the above content, it can be seen that the development of the equipment manufacturing industry is greatly supported by relevant national policies, and the attention and frequent visits of national leaders will further stimulate the determination of the entire industry to make progress.
8, National policies provide good opportunities for development, and the development of construction machinery is expected to reach a new high point
The operation of China's construction machinery industry in the first half of this year is quite optimistic. At the beginning of the year, some people believed that the Chinese construction machinery market may show a trend of high before and low after 2070. But after half a year of operation, the situation of insufficient supply and queuing for pick-up in the construction machinery market is enough to prove that the market has not shown any weakness. From the current perspective, the sales target for the entire industry will be set at the beginning of the year with a sales revenue of over 370 billion yuan and a year-on-year growth? On the basis of 5%, further adjustments will be made, and export growth will be around 30%, but it will still take time to recover to the level before the 2008 financial crisis.
Data shows that in the first four years of the 11th Five Year Plan (2006-2009), the added value and total output value of the mechanical industry increased by 26.22% and 26.64% respectively on an average annual basis, higher than the expected target of the 11th Five Year Plan industry plan (12%). In 2009, the total output value of the mechanical industry exceeded 10 trillion yuan, accounting for 19.67% of the national industry, and the development quality was significantly better than during the 15th Five Year Plan period.
This year is the last year of the 11th Five Year Plan, and various enterprises have begun to formulate the "Ten Z" development plan. According to the "Revitalization Plan for Equipment Manufacturing Industry" and the relevant policies that have already been or will be introduced, many enterprises are full of confidence in the development of the "12th Five Year Plan": achieving the goal of becoming one of the top six agricultural machinery companies in the 12th Five Year Plan; Shaanxi Automobile plans to produce 200000 to 350000 heavy-duty trucks during the 12th Five Year Plan period; Yuchai strives to enter the 100 billion yuan construction machinery group by the end of the 12th Five Year Plan.
Xinjiang, as a key area of the next ten-year plan for western development, has become a competitive market for various construction machinery industry enterprises. On July 15th, XCMG Group's main distributor in Xinjiang, Xinjiang XCMG Weiye Engineering Machinery Co., Ltd., opened its 4S store; Dongqi is promoting product structure adjustment and industrial upgrading, forming a good development trend of multiple power sources simultaneously; Northern Transportation established a Xinjiang branch to expand the western market; Futian Lewo's first tractor 4S store has settled in Aksu, Xinjiang. The key engineering construction in Xinjiang drives the progress of the construction machinery industry.
According to statistics, in 2008, the number of cars in China reached 4957-5 (excluding low-speed cars), the number of machine tools exceeded 7 million, and the number of 14 main models of construction machinery reached 2.9 million. A large number of equipment will be phased out after meeting the scrapping requirements. The economic losses caused by corrosion and wear in China's industrial industry each year account for 4.5% and 5% of GDP, respectively, while the combined losses in developed countries range from 4.5% to 5%. If China's remanufacturing can reach the level of developed countries, it can save the country 155 billion yuan annually. Therefore, remanufacturing is an important direction for the future development of construction machinery.
The country's attention, policy support, and diversified business can all bring many opportunities for the development of Wangcheng Machinery. If we can make good use of these resources, continuously enhance our independent innovation capabilities, adapt to new market changes, and comprehensively enhance our competitiveness, then the development of domestic construction machinery will reach another high point.
