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US manufacturing giant sees growing importance of China market

Xinhua | Updated: 2017-09-28 10:09

NEW YORK - China continues to be an important market for Caterpillar for the foreseeable future, due to the country's sustainable growth and vast infrastructure and housing needs, CEO of the leading US manufacturer of farm and construction equipment said.

"We're encouraged by the continued growth in China for the first half of 2017, primarily driven by increased infrastructure and residential investment," Jim Umpleby told Xinhua in a recent interview.

China's GDP grew faster than expected in the first half of the year, up 6.9 percent from a year earlier, according to data from the National Bureau of Statistics.

"With the Chinese government's new development model as outlined in the 13th Five-Year Plan, we see business growth potential with continued government investment in infrastructure development, energy reform and urbanization," said Umpleby.

The Illinois-based company announced in July that its second-quarter sales and revenues up 1 billion U.S. dollars from a year ago, beating market expectations. Shares of Caterpillar soared after the release of earnings report.

"While a number of our end markets remain challenged, construction in China and gas compression in North America were highlights in the quarter," Umpleby said in the report.

Caterpillar's Asia/Pacific quarterly sales increased 25 percent primarily due to an increase in construction equipment sales in China resulting from increased infrastructure and residential investment.

"China has vast infrastructure and housing needs, and we believe it will remain an important construction equipment market for Caterpillar for the foreseeable future," Umpleby said.

"Sales in our construction and mining segments are doing well. In fact, we've seen a noticeable uplift in sales of excavators," he added.

In August, Caterpillar celebrated the sale of 20,000 mini hydraulic excavators in China.

The momentum in the company's excavator sales in the first half of 2017 is a good indicator of that growth, driven by a combination of robust infrastructure and building construction activity as well as higher replacement demand.

"We see continued construction growth opportunities over the medium and longer term in China," said Umplebly.

Meanwhile, Caterpillar has been widely involved in the projects under China's Belt and Road Initiative.

"With our significant manufacturing footprint in China, a global dealer network and a financial service network to support our customers along the Belt and Road routes, we are working with Chinese SOEs in 20 countries on projects ranging from roads, ports, mines and oil fields," said Umpleby.

The US manufacturing giant has made a long-term commitment to China and has been one of strong supporters of the Belt and Road Initiative.

"A notable opportunity within energy for Caterpillar, China continues to build out its natural gas infrastructure with the country's announced intentions to develop shale resources," he said.

When talked about trade ties between China and the United States, Umpleby said, "The trade relationship between the U.S. and China is important to the global economy and to Caterpillar."

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