From the second half of 2011 to the end of 2012, as China's economic development slowed and capital construction projects decreased, the construction machinery industry remained in the doldrums. Entering 2013, apart from some enterprises, many companies were still sitting and waiting for the spring breeze, hoping for large state investment. Some media, and even industry insiders, kept capturing information from the speeches of state leaders and statements by relevant departments, actively interpreting them to provide the industry with so-called positive signals. As a result, despite all the clamor from industry media and the predictions of industry professionals, almostayear has passed,and apart from industry professionals' forecast that 2013 would see slight growth over the previous year, the industry as a whole has still not seen the“bottoming out and rebound” that some had spoken of;the overallshadow of gloom still hangs over China's construction machinery industry.

This reminded the reporter of Foundation Engineering Network of an article, “Analysis of the Asian Construction Machinery Market: Seizing Business Opportunities for Development,” which was widely reprinted by major industry websites some time ago. The article is worth reading by China's construction machinery sector, especiallyby enterprises, and it is all the more necessary to think deeply after reading it. The article says that the development of the construction machinery industry is becoming increasingly difficult. Destocking construction machinery products, represented by excavators, is a major challenge facing domestic construction machinery enterprises. Yet this problem is not without solutions. Looking at China's neighboring countries, a large number of infrastructure projects have already been launched one after another. These developing countries, represented by India, all have plans to “undertake massive construction” in the next 3-5 years. Their demand for construction machinery products is growing day by day. And the excellent cost-effectiveness of Chinese construction machinery products will make them their best choice. For Chinese enterprises, looking to Asia and eventhe entireinternationalmarket is undoubtedlythe best way to absorb excess capacity.

The reporter of Foundation Engineering Network feels deeply that this warning in the article is sincere and thought-provoking. According to relevant information, Thailand, Vietnam and Myanmar in Southeast Asia, as well as India and the countries of Central Asia, and Mongolia to the north, are all vigorously carrying out infrastructure construction, andalmost all the neighboring countrieshaveuniformconstruction plans spanning several years, with broad demand for foundation construction and construction machinery. For such a large market in so many neighboring countries, only some large, powerful enterprises such as Zoomlion, XCMG, Sany, as well as CSR Beijing Times, Sunward, LiuGong and Lingong,have taken the initiative to go abroad, whilefew otherenterprises have entered. This inevitably leaves one puzzled about these enterprises.

In response to overcapacity in China's construction machinery industry andtheoverall environment of market downturn, the reporter of Foundation Engineering Network has written several articles calling on construction machinery enterprises to go global and implement an internationalization strategy. The articles pointed out that only by implementing internationalization can inventory pressure be effectively transferred, overcapacity absorbed, and the situation of a saturated Chinese construction machinery market with fierce competition be reversed. Facts have proven this suggestion to be very correct. To date,XCMG,Sany, Zoomlion and some other enterprises that have gone global have already achieved the phenomenon of making up for domestic losses abroad, and have achieved substantial growth in returns from internationalization. The industry giants' original goal was internationalization; having tasted the benefits, they are even more determined in their ambition and confidence to accelerate technological progress and compete for the top globally. Non-scale enterprises should not expect that once leading enterprises go global, they will vacate the domestic market—no such good thing will happen.Industry giants understandeconomic lawsvery well,and economic laws will surely make the development of leading enterprises based on securing the domestic marketwhileactively expanding outward.

Therefore, on one side is the contraction of the country's overall environment and insufficient domestic market demand; on the other side, China's neighboring countries are vigorously carrying out infrastructure construction. Our many construction machinery manufacturers can be said to be facing a feast all around, yet they would rather stay hungry at home than strive to open up international markets. Why not follow the example of industry giants, vigorously strengthen independent innovation, upgrade products, enhance international core competitiveness, and seek returns from international markets? Relying solely on the domestic market and sitting waiting for new investment—given China's development strategy of seeking progress while maintaining stability and its national conditions, plus the fact that China's construction machinery has already entered a state of supply exceeding demand—if one listens without analysis to the “clamor” of some media and so-called authorities, one will most likely be “misled” andmiss opportunities.Of course, it should be pointed out that implementing internationalization is not easy; it requires enterprises to have sufficient preparation and adequate conditions. This topic is beyond the scope of this article and should be discussed separately.

Editor: Wu Yue