Entering March, China enters the time of the “Two Sessions” that draws global attention. On March 5, the Fifth Session of the 12th National People's Congress opened in Beijing, and Premier Li Keqiang delivered the government work report. While reviewing 2016, Li Keqiang made specific work arrangements for 2017. From the Premier's work report, it is not hard to see that the prospects for the construction machinery industry are excellent.

 

Infrastructure investment of 2.6 trillion yuan to be completed in 2017

The 2017 Government Work Report states: “We will actively expand effective investment. This year, we will complete 800 billion yuan of investment in railway construction and 1.8 trillion yuan in investment in highways and water transport, and begin construction on another 15 major water conservancy projects. A total of 507.6 billion yuan will be allocated from the central budget for investment. At the same time, the government must take the lead in honoring its commitments; it must never arbitrarily change agreements, and must never say ‘the new official ignores the old accounts.’”

Interpretation: Judging from the figures in the Premier's report, recent fixed asset investment by the central and local governments can be described as “big moves,” demonstrating the bold spirit of 2017 to “roll up our sleeves and work hard.” Take the “13th Five-Year Plan” Modern Comprehensive Transport System Development Plan, approved and issued by the State Council on February 3, as an example: during the “13th Five-Year Plan” period, the total investment scale in transport alone will reach 15 trillion yuan; the total operating mileage of railways will increase by about 30,000 kilometers, including 11,000 kilometers of high-speed rail; expressways will increase by about 30,000 kilometers; and civil aviation airports will increase by more than 50. Therefore, construction machinery in related fields can fully display its capabilities.

As for local governments, their willingness to support the economy through infrastructure investment is also quite strong. As of February 28, among the 25 provinces that had published growth targets, the targeted scale of fixed asset investment for 2017 had already exceeded 50 trillion yuan, while the “Economic Blue Book” released by the Chinese Academy of Social Sciences predicts that total fixed asset investment in 2017 will reach 67.1 trillion yuan—a truly astonishing figure.

From the actual experience since reform and opening up, the second year of each five-year plan is a peak year for the start of infrastructure projects. 2017 is precisely the second year of the “13th Five-Year Plan.” Reaching a construction peak at this point conforms to historical patterns. In fact, benefiting from earlier related infrastructure investment, construction machinery enterprises led by Sany showed signs of recovery in the second half of 2016, and this momentum successfully continued into 2017.

Promoting Chinese equipment such as construction machinery to the world

The 2017 Government Work Report states: “We will solidly advance the building of the ‘Belt and Road.’ We will deepen international cooperation on production capacity, encourage enterprises to participate in overseas infrastructure construction and production capacity cooperation, and promote Chinese equipment such as construction machinery to the world.”

Interpretation: In addition to infrastructure construction, the “Belt and Road” is also a hot topic at the Two Sessions. With the smooth advancement of the “Belt and Road” strategy, related strategic plans have also become increasingly clear. Given the current domestic environment and international situation, the “Belt and Road” strategy is in a golden period of development. According to statistics, the “Two Sessions” reports of all 31 provincial-level regions across the country in 2017 made arrangements related to the “Belt and Road” strategy, with production capacity cooperation and ports being hot topics.

For the construction machinery sector, the “Belt and Road” strategy indicates more possibilities. In recent years, Sany, as a leading enterprise in the industry, has benefited greatly from “Belt and Road”-related investment, achieved remarkable internationalization results, and occupied a favorable position in the international competitive landscape where “the strong become stronger,” rapidly developing into a strong competitor in the global construction machinery industry.

It can be foreseen that with the in-depth advancement of “Belt and Road” construction, there will be more and more opportunities in overseas markets, and industry enterprises such as Sany will have ever-greater opportunities to “seek gold” abroad. How to create more overseas market opportunities for independent brands and enable more enterprises to take the step of “going global” is undoubtedly also one of the major national strategies that this government focuses on and continues to advance.

Deepening implementation of “Made in China 2025”

The 2017 Government Work Report states: “We will vigorously transform and upgrade traditional industries. We will deepen the implementation of ‘Made in China 2025,’ accelerate the application of big data, cloud computing, and the Internet of Things, and use new technologies, new business forms, and new models to drive changes in the production, management, and marketing models of traditional industries. We will take the development of intelligent manufacturing as the main direction, advance the construction of national intelligent manufacturing demonstration zones, and promote new vitality in traditional industries.”

Interpretation: The “Made in China 2025” action guideline clearly points out that manufacturing is the main body of the national economy and the foundation for building the country, revitalizing the nation, and strengthening the nation. The central government has proposed the strategic measure of “Made in China 2025,” striving through 10 years of effort to move China into the ranks of manufacturing powers and lay a solid foundation for building China into a globally leading and influential manufacturing power by 2045.

The proposal of “Made in China 2025” presents a new opportunity for China's construction machinery manufacturing industry. The high-end development of the construction machinery manufacturing industry is related to the national economy and people's livelihood and affects every aspect of our lives, from daily construction to national defense development. It can be called an important foundation of national economic life, so it is no wonder the government has repeatedly emphasized this strategic measure.

Miao Wei, Minister of Industry and Information Technology, has recently stated on multiple occasions that 2017 will be a key year for China to fully implement the “Made in China 2025” strategy, and that the Ministry of Industry and Information Technology and other relevant departments will also introduce a series of measures to promote the continued implementation of the “Made in China 2025” strategy and the comprehensive transformation and upgrading of the manufacturing industry.

With the convening of the national “Two Sessions,” it is certain that representatives and members will also focus on the central theme of “Made in China 2025” and hold corresponding discussions on the innovative, intelligent, green, and high-end development of manufacturing, including the construction machinery industry. As one of the first batch of demonstration enterprises for national “intelligent manufacturing,” Sany Heavy Industry will surely also welcome another spring of construction machinery industrial upgrading.