The sales of excavators can be considered a barometer of China’s economy, as the figure and the Chinese GDP shared a similar curve last year – plunging in the first quarter and bouncing back in the rest of the year.
The quarterly growth of China’s excavator market in 2020 was -6.8 percent, 24.8 percent, 33.2 percent and 62.5 percent, respectively, which perfectly fit into the trend of the country’s GDP performance – extracting 6.8 percent in the first quarter, and rising 3.2 percent, 4.9 percent and 6.5 percent, respectively in the following quarters.
Excavator sales are an important micro-indicator for economy. The excavator market usually revives about one week after the Chinese Lunar New Year festival each year, and peaks within one and a half months.
However, the sales peak came 30 to 45 days later this year on account of the heavy blow caused by the COVID-19 pandemic.
Unexpectedly, the outbreak didn’t drag down the excavator market. On the contrary, China’s excavator sales rebounded during the low season last year, and some excavator manufacturers were even running at full capacity.
Last year, 25 excavator manufacturers in China sold more than 320,000 excavators, a year-on-year increase of 39 percent. Among them, 290,000 were sold to domestic customers, up 40 percent compared with those in the previous year, and 30,000 were shipped to overseas destinations, rising 30 percent on a yearly basis.
While some countries saw a sharp drop in the sales of major construction machinery, China’s excavator sales bucked the trend and secured steady growth, injecting vitality into the world economy.
The bounce back of excavator sales came from a release of backlog, which vividly demonstrated China’s efforts to steadily resume work and production.
Take the transportation sector as an example. By the end of April 2020, over 99 percent of 625 key transport projects under construction had resumed work. Excavators were seen working at many construction sites, from high-speed rail lines to tunnels and bridges.
They played a big part in various sectors of China’s resumption of work and production, including bridge and road construction, building-greening projects, farmland renovation and construction of 5G base stations.
The upward sales of excavator are attributed to the rise in overseas orders, the need for equipment upgrading driven by emission regulations, as well as the new demand released from China’s accelerated investment in and implementation of infrastructure projects.
Last April, the Chinese government announced that it would enhance investment in both traditional and new infrastructure. Government departments across the country have adopted approaches, such as special bonds, to stimulate financing, expand domestic demand, and make infrastructure investment an important driver of the economy.
As China issued 3.75 trillion yuan ($580 billion) worth of special bonds in batches, infrastructure would effectively contribute to stabilizing investment and safeguarding people’s livelihood, and push the stable operation of the macro economy.
What the excavator sales have displayed is the rapid progress of China’s infrastructure construction.
As China enters its 14th Five-Year Plan period (2021-2025) and embarks on a new journey of fully building a modern socialist country this year, the country is faced with arduous tasks of new countryside construction, urban renovation and other projects concerning people’s livelihood, as well as the improvement in industries such as medical facilities and transportation.
China built over 600,000 5G base stations and 462,000 charging poles in 2020, which has created vast development space for digital transformation and intelligent upgrading.
Infrastructure construction is a solid support for other industries. Facilitating high-quality development, new infrastructure projects enabled China to turning a major crisis into vast opportunities in the eventful year of 2020.
The increase in the production and sales of excavators also speeded up construction progress. Statistics showed that the working hours of excavators rose by 12.9 percent year on year in 2020, and even 50 percent in 9 provinces and municipalities.
Many institutions predicted that China’s excavator sales will continue to rise in 2021. It is also believed that the Chinese economy is bound to maintain long-term growth as it boasts great potential and resilience, strong vitality, large room for maneuver, and multiple policy tools.