U.S. heavy machinery giant Caterpillar Inc. expects a year of robust sales growth in China in 2018, looking to opportunities in infrastructure investment and the Belt and Road Initiative.
The world's largest construction and mining equipment maker believes its sales in construction industries will continue to grow in China this year, Caterpillar Inc. CEO Jim Umpleby said in a recent interview.
"We expect another strong year in China in 2018," he told Xinhua, expecting "quite strong" sales in the first half with tempered demand in the latter half due to seasonality.
Nearly half of Caterpillar's sales increase last year came from construction industries, and China was a "very important" contributor, according to Umpleby.
In the fourth quarter of 2017, Caterpillar saw sales in Asia Pacific rise 22 percent year on year. About half of the sales improvement was in China, resulting from increased building construction and infrastructure investment, according to the company's quarterly results.
Looking forward, Umpleby sees potential growth opportunities in China over the medium and longer term with continued government investment in infrastructure, energy reform and urbanization.
China's plans to invest in infrastructure in central and western regions as well as rural areas will narrow the regional economic gap, while the government's focus on fighting pollution is likely to generate more business opportunities in relevant sectors, he said.
Caterpillar has three primary business segments: construction industries, resource industries, and energy and transportation.
Entering the Chinese market in 1975, the company has witnessed the economy's double-digit expansion in previous years and its recent slower growth as well, which Umpleby describes as more sustainable.
"That sustainable growth, although it's a bit slower it is a positive thing for China and for all suppliers in China as well," he said.
With 10,000 employees at about 20 manufacturing facilities in China, Caterpillar views the country as "an important and strategic location," according to the CEO.
The company also has R&D centers, logistics centers and a financial leasing service in the country.
For Umpleby, the Belt and Road Initiative, which aims to build trade and infrastructure networks connecting Asia with Europe and Africa, is the most important economic program being promoted by China.
Caterpillar has been involved in Belt and Road projects in 20 countries.
"We're very well positioned to participate in the Belt and Road Initiative," Umpleby said, citing the company's manufacturing sites and service support all over the world.
He also applauded the steps taken by the Chinese government over the past four decades to open up the economy and make it easier for foreign companies to invest.
"We believe that the reforms that have taken place in the past few decades were positive," he said. "We hope they will be continued, and we're ready to invest."
Seen as a bellwether for the world economy, Caterpillar saw total sales and revenues increase 35 percent year-on-year to 12.9 billion U.S. dollars in the fourth quarter of 2017.