Stable growth forecast for China's machinery makers this year

China's machinery sector is expected to report year-on-year revenue and profit growth of 5 percent each this year, while exports are likely to increase by around 2 percent, industry experts estimated on Monday.

Despite the uncertainties caused by weakening global demand and geopolitical tensions, the foreign trade growth of China's machinery industry — a key economic indicator — rose 1.7 percent on a yearly basis to $1.09 trillion in 2023, maintaining the $1 trillion mark in foreign trade value for the third consecutive year, according to information released by the Beijing-based China Machinery Industry Federation (CMIF).

China's exports of machinery products amounted to $783.02 billion last year, an increase of 5.8 percent year-on-year, accounting for 23.2 percent of the country's total export value.

Ye Dingda, chief economist of CMIF, said a large number of Chinese manufacturers are keen to cultivate new markets, such as Russian-speaking regions, Africa, Europe and Latin America to further expand their market presence. They have progressively developed a diverse pattern in the foreign trade market, Ye said.

"This trend will continue in 2024," Ye said. "Thanks to their advances in technology and competitive pricing, Chinese machinery manufacturers have experienced a notable rise in the production and export of both mainframes and complete machinery units in recent years."

The combined export value of China's three tech-intensive green products — solar batteries, lithiumion batteries and electric vehicles — reached 1.06 trillion yuan ($147.31 billion) last year, breaking the 1 trillion yuan mark for the first time, with a year-on-year increase of 29.9 percent, according to data from CMIF.

Chen Bin, deputy director of CMIF's expert committee, said the machinery industry's external demand is under pressure due to several challenges, including the constriction of trade from a recovering global supply chain, a deceleration in the economic rebound of developed countries, escalating trade protectionism and geopolitical tensions.

For example, popular Chinese machinery products have become new targets of international trade disputes in recent years. The European Union has initiated a countervailing duty investigation into China's new energy vehicles and launched an anti-dumping investigation into mobile lifting platforms. The United Kingdom has begun anti-dumping and countervailing duty investigations into Chinese excavators.

Highlighting that a new round of technological revolution and industrial transformation will bring new growth opportunities, Chen said the deep integration of next-generation information technology with traditional industries, along with the advancement of eco-friendly practices, will hasten the shift in production and consumption patterns in both Chinese and global markets.

Nantong Tongyang Port Co Ltd, a freight forwarder located in Nantong, Jiangsu province, shipped 80 buses manufactured by Heifei, Anhui province-based Anhui Ankai Automobile Co Ltd to Saudi Arabia and Egypt from a port in Nantong, late last month.

The freight forwarder will transport a total of 380 buses, comprising both traditional fuel and electric-powered models, to various destinations across the world this month.

Benefiting from a tangible growth of the Belt and Road Initiative and Chinese automakers' established reputation in the Middle East, North Africa and member economies of the Association of Southeast Asian Nations, Chinese vehicles have sold well in overseas markets, said Tang Donghui, a sales manager at Nantong Tongyang Port Co Ltd.

The company will further help its clients ship 2,000 buses to global markets this year, Tang said.

According to Nanjing Customs data, Jiangsu province, a key export hub in China, achieved an export value of 194.9 billion yuan for solar batteries, lithium-ion batteries and electric vehicles in 2023.This secured the top position in export volume in China for the province, representing a year-on-year growth of 12.3 percent.