Analysis of the Top 10 Policies that Have a Far-reaching Impact on China's Construction Machinery Industry

In 2009, when the world suffered a financial crisis, the Chinese government introduced a series of policies and regulations to steadily increase the economy. These policies and regulations objectively created the “absolutely superior” of Chinese construction machinery in the world and have a profound impact on the development of the industry.

VAT reform is beneficial to technological transformation of engineering machinery enterprises

On January 1, 2009, the new "Provisional Regulations of the People's Republic of China on Value Added Taxes" was implemented. The "Regulations" does not change the tax rate, but allows companies to deduct the value-added tax included in the purchase of equipment, reducing the tax burden on corporate investment in equipment. In other words, the value-added tax included in the newly purchased equipment of the enterprise can be deducted from the new value-added tax for the company this year, thus avoiding the double taxation of the purchase of the equipment of the enterprise. This is beneficial for construction machinery companies to improve their own strength, update processing equipment, adjust industrial structure, expand product variety and even product transformation. In addition, due to the economic crisis, the decline in the interest rate of RMB bank loans, the decline in the price of steel products and fuel prices have also facilitated the technological progress of enterprises.

Second mobile phone imports new regulations to improve the share of domestic excavators

On January 13, 2009, the National Electromechanical Products Import and Export Office promulgated the “Circular on the Transfer of Imported Application Materials for Old Excavators”, and the import of used excavators will be handled by the National Electromechanical Institute in accordance with the “Measures for the Administration of Imported Key Mechanical and Electronic Products”. To conduct unified management, at the same time require that the old excavator that is planning to apply for import should meet the standards such as “Importing Acceptance Criteria for Used Excavators”. This move aims to further strengthen the management of the import of used excavator products and safeguard the interests of consumers.

Increase the average price of used excavators to reduce their market share in the Chinese market, control the flow of used excavators into the domestic market at the source, and provide a broader market for new excavator manufacturers. At the same time, at the beginning of 2009, the country passed the adjustment plan for the equipment manufacturing industry and proposed to rely on key projects in areas such as coal mining and metal ore mining to achieve targeted domestic production of key products, which also created more for domestic excavators. Market space.

Railway Construction Drives 10% Market Demand for Construction Machinery

The highlight of the 4 trillion yuan investment is the construction of infrastructure facilities, of which the pull effect of railways on construction machinery is particularly evident. In 2009, the total investment in railway fixed assets in China reached 700.7 billion yuan, and 600 billion yuan was invested in railway infrastructure construction in that year. According to the 55% share of civil engineering investment, in 2009, China’s railway civil engineering investment amounted to RMB 330 billion. Among them, the demolition cost is about 50 billion yuan; the cost of subgrade construction is about 50 billion yuan; the construction cost of bridges and culverts is about 110 billion yuan; and the tunnel is about 110 billion yuan. In concrete machinery, 600 billion yuan of railway infrastructure investment will drive 120 million tons of cement demand. In terms of earth-moving machinery, there is a large demand for excavators, bulldozers, graders, and pavers. In the field of piling machinery, the demand for rotary drilling rigs, pile drivers and other equipment has increased. In addition, there is a large demand for tunnel construction equipment such as roadheaders. On the whole, these investments will directly drive the growth of demand for more than 10% of the construction machinery market in China, which will play a significant role in driving the construction machinery market in China.

Equipment manufacturing adjustment and rejuvenation plan for the industry to offer good

On February 4, 2009, the State Council reviewed and adopted the plan for the adjustment and revitalization of the equipment manufacturing industry. On May 12, the General Office of the State Council issued a detailed implementation plan for the adjustment and revitalization of the equipment manufacturing industry. According to the spirit of the “planning” outline, the revitalization plan for the construction machinery manufacturing industry will also be introduced within three years. “Planning” proposes that key projects in high-speed railways, urban rail transit construction, coal mining and other fields should gradually realize the domestic manufacture of key products, and require that the technical level of basic components, large-scale casting and forging parts, and special raw materials be upgraded as soon as possible. "Planning" is a good news for "directly benefiting" the solution to the technical bottlenecks of the key components in the related fields of construction machinery and other equipment manufacturing. The focus of the planning for the revitalization of construction machinery is to improve the original innovation capability of enterprises, strengthen the research of basic technologies, and develop key functional components for supporting use, so as to further extend the product chain and service chain.

The issue of the equipment manufacturing industry of the two National Committees has become the focus

At the "two sessions" held on March 3 to 5, 2009, equipment manufacturing industry became the focus. On March 5, Premier Wen Jiabao specifically proposed in the "Government Work Report" to implement independent research and development of major equipment, domestic reliance on projects and government procurement systems, and to focus on the development of equipment required for major sets of equipment, high-tech equipment and high-tech industries, and improve equipment manufacturing. Industry integration innovation and localization. It is understood that "strengthening confidence and strengthening and expanding China's equipment manufacturing industry" are the common aspirations of representatives of the equipment manufacturing industry and the members participating in the two sessions. The topics of the construction machinery industry mainly include recommendations on the implementation of the implementation plan for the revitalization of the equipment manufacturing industry as soon as possible, how to strengthen independent innovation to cope with the international financial crisis, increase the cultivation of innovative talents for construction machinery, how to support construction machinery companies to implement overseas mergers and acquisitions, and establish engineering rescue machinery and equipment The emergency network, the establishment of a post-disaster reconstruction fund, revision of the earthquake prevention and reduction law, and so on. The setting of these issues and their effects will have a profound impact on the further prosperity of the construction machinery industry.

The tax rebate rate increased 6 times to make the export of construction machinery close to the full tax rebate.

In order to cope with the international financial crisis, from August 2008 to April 2009, the Central Government has raised the export tax rebate rate six times, involving 12 taxable construction machinery products, including concrete pumps, lifts, and unloading cranes. Escalator parts, buckets, buckets, grapples and grips, bulldozers or shovels for side-dug bulldozers, etc. This move will help companies reduce export costs, increase profits, and expand exports. After April 1, 2009, the export tax rebate rate for most of the construction machinery products increased to 17%. Together with spare parts, the export tax rebate rate for the construction machinery industry basically reached a higher tax rebate for high-grade products.

New "Special Equipment Safety Supervision Regulations"

Expect to exclude earthmoving machinery

On January 14, 2009, the State Council passed the "Decision of the State Council on Amending the "Regulations for the Supervision and Administration of the Safety of Special Equipment", which will come into effect on May 1, 2009. The person in charge of the quality inspection bureau explained that the new regulations have changed in the following four aspects: First, the penalties for penalties for violations of special equipment have been aggravated; the second is the filling of special motor vehicles and mobile pressure vessels in the field (factory). The safety inspection of non-destructive testing of special equipment has been explicitly included in the scope of regulation adjustments. Third, regulations for energy-saving management of high-energy-consuming special equipment have been added. Fourth, the main responsibility for the safety of special equipment production and use units has been further clarified.

It is understood that currently the "catalogue of special motor vehicles within the "field" (factory)" is under formulation. From the "catalogue (draft)", it can be seen that excavators, loaders, scrapers, pipelayers, graders and stable soils. Earth-moving machinery such as mixers did not reappear, and earth-moving machinery such as excavators will no longer be included in the special equipment manufacturing license list. This will create greater convenience and development space for the development of construction machinery manufacturing companies.

Strengthen the supervision of construction project bidding and promote the industry norms

On May 26, 2009, the National Development and Reform Commission, together with the Ministry of Industry and Information Technology, the Ministry of Supervision, the Ministry of Housing and Urban-Rural Development, and other eight departments, jointly issued the “Opinions on Implementing the Expansion of Domestic Demand, Promoting Economic Growth, and Deploying Further Measures to Strengthen the Supervision and Bidding of Construction Projects. "Notice" has carried out a unified deployment of supervision and management of project construction bidding. The comments pointed out that it is necessary to promote the issuance of the "Implementation Regulations on the Bidding and Tendering Law" as soon as possible, uniform the tendering and bidding rules, and enhance the operability of the law Strict implementation of the "Tendering and Bidding Law" provisions, and resolutely correct the illegal setting of restrictive conditions to exclude potential bidders, restrict competition. In accordance with the requirements of the "Provisional Measures for the Announcement of Bidding and Illegal Proceedings," an announcement platform for the publication of unsolicited bidding records shall be established as soon as possible. This is of great significance for managing and using government investment, standardizing the bidding and bidding market order, ensuring project quality and fund safety, improving investment returns, and further promoting the standardization of the domestic market, including the construction machinery industry.

New Regulations for Tort Liability Law Promote High Industry Requirements

On December 26, 2009, the Tort Liability Law passed by the 11th National People's Congress Standing Committee passed a new regulation, “If buildings, structures, or other facilities collapse causing damage to others, the After the construction unit assumes the joint and several liability, "the compensation for the construction unit and the construction unit, if there are other responsible persons, it has the right to recover from the other responsible persons", "for the reasons of other responsible persons, the collapse of buildings, structures or other facilities causes damage to others. , the responsibility of other responsible persons.". This means that in the future, if there is a “bean curd” project that directly threatens the safety of people’s lives and property, such as “building”, and causes casualties and property losses, the developer as a construction unit and the construction company as a construction unit should Jointly and severally liable. The promulgation of this provision, to a certain extent, also urges the construction machinery industry, which is closely related to the construction market, to further improve the reliability and performance stability in the production process so as to be more adaptable to the high product requirements during the construction process.

Self-directed benefit of construction machinery and equipment to benefit from import tax exemption

In 2009, the Ministry of Finance, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the General Administration of Customs, the State Administration of Taxation, the National Energy Administration and other six ministries jointly issued the "Circular on the Adjustment of Import Tax Policies for Major Technical Equipment." From July 1st, 2009, import of key spare parts and raw materials that are necessary for domestic companies to produce major technical equipment and products that support the development of the country will be exempted from import duties and import value-added tax. At the same time, the import tax exemption policy for complete machines and complete sets of equipment was cancelled. For domestically produced equipment, it is still unable to fully meet the demand and still needs to be imported. As a transitional measure, it will continue to grant preferential import policies within a certain period of time, after rigorous examination and verification, in order to gradually reduce the margin of preference and narrow the scope of tax exemption.

The adjustment of the import tax policy is one of the supporting details of the “planning for adjustment and revitalization of the equipment manufacturing industry”. This policy mainly exempts equipment manufacturing companies from purchasing imported key spare parts and raw materials for the development of major technical equipment.

Adjusting the import tax policy can effectively improve the core competitiveness and independent innovation capability of China's construction machinery enterprises, promote the adjustment and upgrading of industrial structure, promote the localization of major technical equipment, and accelerate the revitalization of the equipment manufacturing industry.