According to the IMS Research report “The China Machinery Production Yearbook – 2011”, China’s production of machinery will grow to $US 320 billion in 2014 from $US 140 billion in 2009, an average annual growth rate of over 17%.
“The strong growth China’s production of industrial machinery is driven by growing local demand for machinery, recovering machinery exports, and continuing transfer of industrial production to China” commented IMS Research analyst, Wilmer Zhou.
State-owned large companies and listed companies find it easy to get government financial support and bank loans to purchase advanced production machinery. The Twelfth Five-Year Plan, the Equipment Manufacturing Industry Revitalization Plan, the West-to-East Power Transmission Project, the West-to-East Natural Gas Project, and the High Speed Railway Project will all continue to drive the high demand for machinery in China.
The general recovery of the global economy will benefit China’s exports of machinery with a high performance-price ratio. The Chinese Government is using the export rebate rate to encourage the export of machinery; with a 17% export rebate rate, material handling machinery and machine tools contributed strongly to the country’s exports in 2010. The rebate rate for textile machinery, agricultural machinery, oil & gas machinery, mine machinery, and commercial & service machinery is set to increase.