Top Ten News Stories of China's Engineering Machinery Industry in 2009 Announced

The "Top Ten News in China's Construction Machinery Industry" selection event, hosted by the China Construction Machinery Industry Association and jointly organized by seven industry media outlets including Engineering Machinery & Maintenance magazine and Huicong Construction Machinery Network, has been held for over 13 years (1996-2008). Years of persistent efforts have made this event one of the most important annual events in the entire industry and market, serving as a crucial channel for industry insiders to review and summarize the industry and market development trends of the past year. After a comprehensive review by industry experts and media representatives on January 4th, the top ten news stories in China's construction machinery industry for 2009 were selected.

The following are the top ten news stories in China's construction machinery industry for 2009:

1. "Glorious Achievements -- Achievements Exhibition of the Construction Machinery Industry in the 60th Anniversary of the National Day" held concurrently with BICES2009

To celebrate the 60th anniversary of the founding of the People's Republic of China and showcase the development history and outstanding achievements of China's construction machinery industry over the past 60 years, the "Glorious Achievements -- Achievements Exhibition of the Construction Machinery Industry in the 60th Anniversary of the National Day," jointly hosted by the China Machinery Industry Federation and the China Construction Machinery Industry Association, and jointly organized by China National Complete Plant Import & Export Corporation and the Machinery Branch of the China Council for the Promotion of International Trade, was held from November 3-6, 2009 in Beijing concurrently with BICES2009. On the morning of November 4, 2009, Jia Qinglin, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Chairman of the National Committee of the Chinese People's Political Consultative Conference, visited the exhibition accompanied by Wang Ruixiang, President of the China Machinery Industry Federation, He Guangyuan, former Minister of the Ministry of Machinery Industry, and Qi Jun, President of the China Construction Machinery Industry Association. Chairman Jia Qinglin highly commended the brilliant achievements made by the construction machinery industry over the past 60 years and encouraged industry enterprises to grow stronger and larger.

BICES2009, held concurrently, covered a total exhibition area of 150,000㎡, with nearly 900 exhibitors and over 78,600 visitors. The scale of the exhibition and the technical level of the exhibits were higher than in previous years. BICES2009 undoubtedly became the only major event in the global financial crisis situation in 2009.

2. The release of the "Three-Year Revitalization Plan for the Construction Machinery Manufacturing Industry"

On February 4, 2009, the State Council reviewed and approved in principle the "Adjustment and Revitalization Plan for the Equipment Manufacturing Industry." Following the guiding principles of the "Adjustment and Revitalization Plan for the Equipment Manufacturing Industry," the "Three-Year Revitalization Plan for the Construction Machinery Manufacturing Industry," organized by the China Construction Machinery Industry Association, was subsequently released.

The Three-Year Revitalization Plan points out that the key to revitalizing the construction machinery industry lies in improving original innovation capabilities, strengthening basic technical research, developing key functional components for supporting use, and further extending the product and service chains. The independent R&D capabilities in some product areas of the industry and the technical level of some functional components should approach the internationally advanced level, and the average mean time between failures (MTBF) of complete machines should be significantly improved; the market demand for large-scale construction machinery should be demand basically self-sufficient; and exports should increase from 32% of total sales in 2008 to over 35%. The Three-Year Revitalization Plan also points out that enterprises should improve their ability to develop current and after-markets, extend service chains, actively carry out remanufacturing projects, and achieve energy conservation and emission reduction goals.

3. Chinese construction machinery companies' R&D takes a step up against the market downturn, with high-tech products emerging one after another

In 2009, the international financial crisis did not stop Chinese construction machinery companies from independent innovation, and high-tech construction machinery products emerged one after another. Examples include the CLG899Ⅲ wheel loader with a rated load capacity of 11.5t developed by Guangxi LiuGong Machinery Co., Ltd.; the SD52-5 crawler bulldozer with a maximum power of 392kW developed by Shantui Construction Machinery Co., Ltd.; the QAY500 all-terrain crane with a maximum lifting capacity of 500t developed by Xuzhou Construction Machinery Works Co., Ltd. of XCMG Group; the SCC11800 crawler crane and QUY1000 crawler crane with a maximum lifting capacity of 1000t developed by Shanghai Sany Heavy Industry Co., Ltd. and Changsha Zoomlion Heavy Industry Science & Technology Co., Ltd., respectively; the LSD228H full-hydraulic single-steel-wheel roller and LDD314 full-hydraulic double-steel-wheel roller with maximum operating weights of 28t and 14t, respectively, developed by YTO (Luoyang) Construction Machinery Co., Ltd.; the CPCD460 internal combustion counterbalanced forklift with a rated lifting capacity of 46t developed by Anhui Heli Forklift Co., Ltd.; and the CL-7500 asphalt mixing plant with a production capacity of 600t/h developed by Jialong Construction Machinery Co., Ltd. These products reflect, to a certain extent, the latest achievements in the technological development of China's construction machinery industry in 2009.

In addition, 25 construction machinery products and technologies won the 2009 China Machinery Industry Science and Technology Award, among which the QJRN-112 slurry shield machine of Shenyang Heavy Machinery Group Co., Ltd. won the first prize.

4. Chinese construction machinery companies accelerate the pace of overseas market layout

In 2009, China's construction machinery exports fell sharply, but the internationalization of Chinese construction machinery companies did not slow down, but instead accelerated the pace of overseas market layout. On January 29, 2009, Sany signed an investment agreement with the North Rhine-Westphalia state government of Germany, intending to establish an R&D and manufacturing base in Europe. On July 8, 2009, LiuGong's first overseas factory in India officially opened, with an annual production capacity of 3,000 loaders. Along with overseas factory construction, Chinese construction machinery has made breakthroughs in product adaptability, service support, financing leasing, etc. For example, in 2009, Zoomlion Heavy Industry established financing leasing companies in Australia, Russia, Italy, and the United States, and successfully completed the first overseas financing leasing business of a Chinese construction machinery financing leasing company at the end of May. These have opened up channels for Chinese construction machinery to further expand the international market.

5. The effects of the four trillion yuan investment become apparent, and the Chinese market stands out in the global construction machinery market

At the end of 2008, the four trillion yuan investment plan launched by the Chinese government to combat the global financial crisis showed its effects in 2009. Although China's construction machinery exports were approximately US$7.5 billion in 2009, a year-on-year decrease of over 40%, the Chinese construction machinery market, driven by investment, showed a unique vitality. In 2009, the Chinese construction machinery market reached a new historical high, with an estimated sales revenue of 310 billion yuan, a year-on-year increase of about 12%. Sales of road rollers, pavers, and rotary drilling rigs increased significantly year-on-year, and excavators and truck cranes also performed well. The high-speed railway construction driving the growth of the construction machinery market was a major highlight of the 2009 market.

6. Extending to the upstream industrial chain, construction machinery manufacturers enter the field of high-end hydraulic component manufacturing

The development of China's construction machinery industry is severely constrained by the backward development of upstream industrial chains, such as high-end hydraulic components. In 2009, Chinese construction machinery companies increased their investment in the field of high-end hydraulic component supporting.

In March 2009, Wuxi Heshan Hydraulic Machinery Manufacturing Co., Ltd., invested by Sany Heavy Industry, officially started construction of its new production base in Jiangyin City, with a total investment of 150 million yuan, mainly researching and producing high-precision hydraulic components for engineering machinery. In October 2009, LiuGong's board of directors reviewed and approved the investment plan for the establishment of a hydraulic component R&D and manufacturing base, and planned to establish LiuGong Hydraulic Parts Company in Liuzhou, with a total investment of approximately 460 million yuan. In addition, companies such as XCMG, Zoomlion, Sany Heavy Industry, and Shantui have also taken relevant actions in the research and development of high-end hydraulic components.

The Fourth Member Representative Conference of the China Construction Machinery Industry Association was held, electing a new council.

On October 21, 2009, the Fourth Member Representative Conference of the China Construction Machinery Industry Association was held in Beijing. In accordance with the procedures stipulated in the Association's Articles of Association, a new council was elected. Qi Jun was elected as the president of the association, and Su Zimen as the secretary-general. Liu Zanping, Xu Ronglie, Yang Hongqi, and Han Xuesong were appointed as honorary presidents of the Fourth Council of the China Construction Machinery Industry Association, Han Xuesong as the chief consultant of the Fourth Council of the China Construction Machinery Industry Association, and Chen Runyu and Liu Wei as consultants of the Fourth Council of the China Construction Machinery Industry Association.

Before and after the Fourth Member Representative Conference of the China Construction Machinery Industry Association, the subordinate branches of the China Construction Machinery Industry Association successively held their 2009 annual meetings, and sub-associations such as the Engineering Machinery Supporting Parts Branch, the Excavator Machinery Branch, and the Earthmoving and Transportation Machinery Branch held elections.

XCMG Group's asset restructuring and listing plan approved

On June 23, 2009, XCMG Group's asset restructuring and listing work was approved by the China Securities Regulatory Commission. This asset restructuring and listing of XCMG Group involved injecting XCMG Heavy Machinery and other core engineering machinery businesses and high-quality assets belonging to XCMG Machinery into Xuzhou Construction Machinery Science and Technology Co., Ltd., a listed company, thereby achieving the overall listing of XCMG Group's core engineering machinery business. Through the integration of business and assets and the reconstruction of management processes, the core competitiveness of the listed company and Sustainable development capabilities will be enhanced, promoting institutional and mechanism innovation, and ultimately achieving XCMG Group's strategic goal of becoming stronger and larger.

The overall listing of XCMG Group's core engineering machinery business is a major turning point in the development history of XCMG Group. XCMG Group stated that the company will fully utilize the capital market platform to accelerate its development towards becoming stronger and larger, achieving its strategic goal of 100 billion yuan in 2015.

Shandong Heavy Industry Group established

On June 18, 2009, Shandong Heavy Industry Group was officially unveiled in Jinan. Shandong Heavy Industry Group was formed by the wholly state-owned assets of Weichai Holding Group Co., Ltd., Shandong Engineering Machinery Group Co., Ltd., and Shandong Automobile Group Co., Ltd.

In recent years, with the continuous acceleration of the process of global economic integration, the competition among equipment manufacturing enterprises has increasingly manifested as competition among industrial chains. Accelerating the adjustment of the structure of the equipment manufacturing industry and optimizing the allocation of various resources has become a strategic approach for the upgrading and development of China's equipment manufacturing industry. The three enterprises have strong relevance in terms of industry and products. The synergistic effects of the reorganized group company in terms of products, technology, market sales and services, and procurement will be more prominent, achieving optimal combination of existing assets and promoting reasonable allocation of incremental investment.

Sany wins trademark battle overseas

The trademark battle between Sany and Daimler Benz lasted for many years. On October 23, 2009, the judgment of the High Court in London ruled to dismiss Daimler Benz's lawsuit alleging that Sany's trademark infringed on its three-pointed star trademark. Thus, Sany achieved a substantial victory in its trademark battle with Daimler Benz.

In recent years, China's engineering machinery industry has invested heavily in independent innovation. While building core competitiveness, it often neglects the protection of its own achievements. The victory in the Sany trademark battle not only cleared a major obstacle in Sany's internationalization process but also has certain reference significance for domestic engineering machinery enterprises in protecting their intangible assets.