​​Industry Insiders' Views on China's Excavator and Construction Machinery Sector​​

​​Innovation as the Key Growth Driver​​

Industry insiders note that innovation serves as the inexhaustible driving force behind the advancement of China’s construction machinery sector. It is not only the sole path to transcending cyclical downturns and scaling new heights but also the proven strategy for evolving from market followers to leaders. With the rapid development of technologies such as 5G communications, big data, cloud computing, and artificial intelligence—deeply integrated with various types of engineering machinery—new value creation opportunities are emerging.

​​Excavator Industry: Navigating the Cycle​​

"When an excavator roars, prosperity follows."

If the construction machinery industry is a "barometer" of macroeconomic growth, then the excavator—the "crown jewel" of the sector—serves as a direct indicator of investment heat and economic vitality. Since stabilizing and rebounding in 2016, the industry has sustained high growth for five consecutive years, with particularly strong performance this year. From January to November, China’s excavator sales exceeded 296,000 units, a year-on-year increase of 37.4%, surpassing the full-year sales of the previous year and setting a historical record.

Wu Peiguo, Secretary-General of the China Construction Machinery Association, remarked, "Since March this year, the domestic market has repeatedly shattered monthly sales records, far exceeding industry expectations. This prolonged period of extraordinary growth is driven by the combined effects of product renewal cycles and inventory cycles. The construction machinery sector, represented by excavators, has successfully navigated bull and bear markets, becoming a vital economic engine during the pandemic."

​​Staying Grounded Amid Prosperity​​

Even amid the industry’s boom, some experts have issued cautionary perspectives, prompting deep reflection among attendees.

Li Hongbao, Executive Vice President and Secretary-General of the Excavator Branch of the China Construction Machinery Association, warned, "Every upward phase in an industry comes with both opportunities and risks. Companies must remain rational. Right now, when the excavator market is thriving—with surging sales and booming stock prices—it is precisely when risks accumulate. According to our surveys, China’s excavator production capacity has reached approximately 600,000 units, far exceeding market demand. The rapid expansion of capacity warrants serious attention. Enterprises must stay level-headed, avoid blind capacity expansion, and refrain from engaging in price wars—otherwise, they risk racing toward collapse."

He Qinghua, analyzing industry cycles, explained, "Historical data shows that excavators, as capital-intensive, long-depreciation assets, exhibit distinct cyclical patterns: short cycles every 3–4 years, medium cycles every 10 years, and long cycles every 20 years. The sector experienced a sharp decline in 2012, so risk control must never be relaxed."

He added, "In 1999, only XCMG from China appeared on the global top 50 construction machinery list. Today, China has 12 listed companies, including four in Changsha alone. Chinese manufacturers have transformed from market followers to global leaders. Each cycle has made them stronger, and this time will be no exception. With the integration of 5G, big data, AI, and other advanced technologies, new value creation is inevitable."

His views resonated with attendees. Long Hui, Chairman of Jiangsu Lihaо Construction Machinery, told Securities Daily, "After the 2012 downturn, many companies underwent transformation, mergers, and diversified explorations, giving rise to a new generation of leading machinery firms. By 2016, as the market rebounded, top players quickly dominated with their comprehensive strengths, significantly increasing market concentration. Looking ahead, leading firms will focus on mainstream markets, while smaller enterprises specialize in niche segments—differentiated competition will foster a healthier industry. Automation replacing labor and the international circulation of new/used equipment will be key growth drivers in the next decade."