Cater­pil­lar sees op­por­tu­ni­ties in China's 5-year plan

The Pak Banker - - COMPANIES/BOSS -

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.

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