China spending boosts machinery demand

Shanghai

CHINESE demand for trucks, cranes and diggers is gaining momentum after bottoming out last year, driven by a Beijing-backed infrastructure push, a housing boom and increased investment linked to China's modern-day "Silk Road".

Chinese and global machinery makers, including Caterpillar Inc, Japan's Komatsu Ltd and Sany Heavy Industry, posted strong profits this week for the first quarter of the year, citing growing strength in the Chinese market after years of decline.

The performance was boosted by China's faster-than-expected economic growth of 6.9 per cent in the first quarter, the fastest pace in six quarters. Economists say Chinese policymakers have leaned on property investment and infrastructure spending, including their plan to build a modern "Silk Road" trading route, to help support the economy. "The strong demand in China resulted in a reduction in Asia-Pacific dealer inventory, as demand outpaced our sales to dealers," Caterpillar chief financial officer Bradley Halverson told analysts this week. "If policy remains supportive we expect strong market conditions in China to continue at least through mid-year," he added. The US-listed firm posted stronger-than-expected first quar…