Caterpillar sees opportunities in China's 5-year plan
China's new five-year blueprint will create business opportunities and long-term growth for the world's largest construction and mining equipment maker Caterpillar, a senior company official said.
Despite an industry downturn in China, Caterpillar sees it as a natural transition and is optimistic about China from a long-term perspective, said Chen Qihua, vice president of Caterpillar Inc. and chairman of Caterpillar China, in an email interview with Xinhua.
Caterpillar's global sales and revenues slumped 15 percent year on year in 2015, partly due to weakening economic growth in China and lower commodity prices, according to the company's annual report.
China's economy expanded 6.9 percent last year, the slowest in 25 years, as trade faltered, property investment cooled and an industrial glut persisted.
However, Chen has high hopes for the implementation of the 13th FiveYear Plan, China's roadmap for development in the 2016-2020 period, saying achieving the country's goal of creating a moderately prosperous society by 2020 will unleash further opportunities.
The draft outline of the Five-Year Plan is being reviewed at the ongoing annual session of the national legislature held in Beijing. China targets an "above 6.5 percent" average growth for the coming five years and aims to double the size of its economy and per capita income by 2020 from the 2010 level. Caterpillar is interested in many aspects of the blueprint, such as economic reforms, industry upgrading, environmental protection and, in particular, the Belt and Road Initiative, Chen told Xinhua.
The initiative, China's proposal to build extensive trade and infrastructure networks with other countries, will enable Caterpillar to participate in various projects in collaboration with its Chinese business partners, he said. By focusing on technology and innovation and with a sustainable business model, Caterpillar matches well with China's 13th Five-Year Plan, Chen added.
While acknowledging that the business environment in China is becoming more competitive, he stressed the importance of upgrading technology and improving efficiency.
As the economy geared down and costs rose, foreign direct investment in the Chinese mainland posted a 2.7 percent year-on-year increase in the first two months of 2016, slowing from 6.4 percent in 2015, official data showed. But Caterpillar remains committed to the Chinese market, Chen told Xinhua.
The company has seen promising growth in energy and transportation as it taps into growing demand from Chinese clients for cleaner, more efficient power generators and engines.
Sales in that sector recorded an average annual growth of 11 percent over the past five years, according to data provided by Caterpillar in September 2015.