However, this can only be regarded as an occasional warm sun in winter, because the interim reports of listed companies disclosed one after another not long ago have already shown that the net profits of the “three giants” of China's construction machinery industry—XCMG Machinery, Zoomlion, and Sany Heavy Industry—all fell sharply in the first half of 2013.

　　Although spring, when all things revive, will come after winter, it currently appears that this cold winter for China's construction machinery industry will still last for a considerable period of time.

　　Not Optimistic

　　In the first half of 2013, the development situation of the construction machinery industry remained unoptimistic. The interim annual reports of listed enterprises show that Zoomlion's net profit in the first half of the year fell 48.31% year-on-year to 2.906 billion yuan; Sany Heavy Industry's net profit fell 48.6% year-on-year to 2.651 billion yuan; and XCMG Machinery's net profit fell 46.49% year-on-year to 851 million yuan.

　　Overcapacity and heavy inventory pressure are the primary difficulties currently facing China's construction machinery industry.

　　Xie Jiachen, a machinery industry researcher at China Investment Consulting, said that the current supply of heavy industry products far exceeds market demand.

　　Statistics show that by the end of 2012, the保有量 of major construction machinery products in China was approximately 5.61 million to 6.08 million units. At present, the planned annual production capacity of China's excavator manufacturers is about more than 600,000 units, and actual production capacity has exceeded 400,000 units per year. However, total excavator sales in 2012 were less than 120,000 units, while global annual demand for excavators is also less than 400,000 units.

　　Ouyang Xinzhou, an analyst at the Forward Industry Research Institute, pointed out that the main reason for the continued decline of the construction machinery industry is that the recovery in the growth rate of infrastructure investment in China is not obvious.

　　“The deep-seated reason for the slow recovery of investment is that in the first half of 2013, the growth rate of local government fiscal revenue remained low, and fiscal expenditure also showed negative growth. The central government's audit of local government debt and control of financial risks led to a substantial decline in the issuance scale of urban investment bonds,” Ouyang Xinzhou said.

　　Therefore, although the growth rate of newly started real estate construction area rebounded significantly over the past six months, the boost to overall demand for construction machinery was not large.

　　Xie Jiachen also pointed out that the domestic and international economic trends in the first half of the year were not very optimistic, and the poor revenue performance of construction machinery enterprises was also within expectations, “which reflects that the macroeconomy has a very huge impact on heavy industry.”