China’s Export Machine Goes High-End: tonybricks

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• 1. Chinas Export Machine Goes High-End
• 2. From its sprawling manufacturing base deep in China’ssouthwestern Hunan province, some 100 kilometers fromwhere Mao was born, construction-machinery maker SanyGroup plans to take on the world. While workers in blueoveralls and yellow hard hats crawl over huge mobilehydraulic cranes and cement mixer trucks in a gleamingfactory, Sany President Tang Xiuguo sits in his expansiveoffice nearby, discussing the opening of Sany factories inBrazil, India, and Alabama, as well as the soon-to-be-completed $475 million acquisition of Germany’sPutzmeister, the world’s largest maker of cement pumps.The bespectacled Tang, one of four founders of the 22-year-old company, aims to lift overseas sales, now some5 percent of its $16 billion revenue, to up to one-fifth ofrevenues within five years.
• 3. The phrase “Made in China” summons up images ofcheap shoes, plastic toys, and electronics assembled inthe vast factory complexes of Foxconn TechnologyGroup (HNHPF). While China built its powerful exportbusiness—increasing 17 percent a year over the lastthree decades—on such light industry and electronicsassembly, that is fast changing. Rising labor costs, up15 percent annually since 2005, plus an appreciatingcurrency, are putting new pressures on China’s cheapmanufacturing model and driving textile, shoe, andapparel factories to close or relocate to Vietnam,Cambodia, or Bangladesh. “China’s share of the world’slow-end exports has started to fall. This reflects a shift byChinese producers into sectors where margins arehigher rather than a failure to compete,” wrote U.K.-based Capital Economics in a March 28 note.
• 4. Chinese-built ships, for example, dominated the globalmarket with a 41 percent share last year, well ahead ofSouth Korea and Japan, according to London-basedshipping services company Clarksons. Data from theInternational Trade Centre, a joint agency of the UnitedNations and the World Trade Organization, also showstrong gains in China’s global share of the markets forrailway locomotives and wagons, machinery, and industrialboilers. In construction machinery, Sany’s specialty, threeChinese companies (Sany included) now rank in the top tenglobally. Many of the new exporters are producing frominland China, rather than the coast, the traditional region formanufacturing.
• 5. Overall, the portion of China’s exports made up by heavyindustry, about two-thirds of which is machinery, has grownfrom 29 percent in 2001 to 38.7 percent last year,surpassing light industry and electronics, according toBeijing-based economics consultants GK Dragonomics.“They are making different products with higher technology,things they can charge more money for,” says AndrewBatson, GK Dragonomics’ research director, who estimatesthat the new industries can help lift China’s share of globalexports from 10 percent now to 15 percent by 2020. “Thetypical Chinese exporter is not a shoe factory in Guangdonganymore. Instead it is some kind of equipment or machinerymaker.”
• 6. The Chinese makers of this machinery are targetingIndia, South America, and the Middle East, as Europe,still China’s largest export market, struggles with its debtcrisis. Europe, the U.S., and Japan accounted for48 percent of China’s total exports last year, down from56.1 percent in 2003, with developing countries nowtaking the majority, says Louis Kuijs, an economist at theHong Kong-based Fung Global Institute. “We have anadvantage because our technology and our productslevel are more suitable for these countries,” says Sany’sTang. “And our price is a bit lower than otherinternational brands.”Policy makers have made upgrading industry a nationalpriority. Equipment manufacturing, shipbuilding, and carsare among the industries slated to receive $2.5 billionfrom the government
• 7. this year to improve technology and product quality.Mergers and acquisitions inside China and overseas arealso being encouraged Says Shao Ning, vice minister ofthe powerful State-Owned Assets Supervision andAdministration Commission of the State Council: “Ourposition is we support Chinese companies investingabroad.”While China’s new manufacturers are not competing indeveloped markets yet, already they arechallenging Caterpillar (CAT), Siemens (SI),GeneralElectric (GE), and other established equipment makersin places like South America and Russia. China’sconstruction-machinery industry is expected to overtakeJapan’s and Germany’s soon, making it the world’ssecond-largest exporter in the category, behind the U.S.
• 8. Winning market share in the U.S. and Europe could takeyears, in part because of concerns over Chinese quality(the crash of a Chinese-built high-speed train in Zhejiangprovince in July hurt China’s reputation as amanufacturer). Sany says it spent $240 million last yearupgrading its factories, including the installation ofwelding robots. As Sany expands overseas, it aims toimprove its products to match the quality achieved by itsnewest acquisition, Germany’s Putzmeister, which willshare engineering know-how and suppliers with itsChinese parent. Says Tang, “We know that ‘Made inChina’ doesn’t have a great reputation. We want tochange this through selling high-quality products.”
• 9. The bottom line: Chinese exports havebeen rising 17 percent a year on average.To keep that pace, China is trying to grabmarket share in high-end machinery.

Omaha Time Capsule: Church hit by explosion :south korea group of springhill

What happened in the Midlands on this day? Here's a sampling from the World-Herald archives.

ST. PETER'S CHURCH HIT BY EXPLOSION

March 31, 1936: Dozens of windows were shattered in surrounding buildings and a number of persons were knocked off their feet by a terrific blast in the boiler room of St. Peter church. Firemen think gas accumulated in the flue, ignited and exploded. No damage was done to the furnace and boiler. Carl Schrattenberger, engineer, who was firing the boiler at the time, escaped without injury. He was hurled 15 feet. Persons in the vicinity said a huge cloud of smoke rolled out of the chimney. The force of the blast was felt up to six blocks away.

1964: Representatives of city employees' unions said the proposed $338,000 increase in the city's pay plan was not enough. The unions recommended, instead, an increase of at least 10 percent. The proposal sent to the Personnel Board by Personnel Director Ernest W. Howard called for an annual increase of about 5 percent. It would give raises to about 80 percent of the city's 1,700 employees.

1987: People wanting to establish a day shelter for the homeless would be required to obtain a city permit under a proposal to be reviewed by the City Planning Board. The board also would consider a redevelopment plan for the Lackawanna leather-processing plant a 2420 Z St. The plan called for the city to provide a $250,000 tax-increment loan to help expand the plant. The homeless shelter permit proposal came from City Councilman Walt Calinger. He said the city needed to have some controls over the establishment of shelters.

1996: The gypsy-moth spraying in the previous May that cost the City of Bellevue $15,000 seemed to have taken care of the moth infestation. Only one male moth was found in traps set during the summer. "We're looking real good there," said Stephen Johnson, an entomologist with the Nebraska Department of Agriculture. Johnson said that if traps laid out for the next two years didn't contain any moths, the problem would be considered solved.