An article of British "Financial Times" written on the June 4th, whose original title is "concrete is worries focus of Chinese bubble". Concrete has been developed for many years as the driving force for China's economic growth. Small concrete mixer is rarely possessed by corporation.
In recent years, ordinary Chinese families take loans for purchasing of concrete mixer, then rent out to receive cash. This phenomenon is very universal.
Many people worry about that, as an important part of the industry, concrete industry also may breed financial bubble. Some main game players in Chinese concrete machinery -- heavy industry enterprises are placing themselves in a complex financial shadow which is weaved together by banks, machinery manufacturers and concrete producers using commercial credit.
They rely on vendors financing to promote concrete mixer sales. But some people worry that the buyers make a loan on new concrete mixers to get more loan. Then, they went on selling unprocessed concrete to cash-strapped developers using credit.
According to the Jiangsu market research results, the sold concrete mixers in the first quarter of some heavy industry enterprises in 2012, more than half of which did not work yet. Buyers store concrete mixers in warehouse, and just want to lend money on morgage and obtain funds to pay wages, charge of electricity and purchase raw materials. "In order to get more loans, they will buy more than demand machines."Analysts participating in survey said.
At present, Beijing is trying to suppress the real estate industry to balance economy and instructs the bank to reduce loan to the industry, thus leading many developers to go out of the market. Nevertheless, when concrete mxier sales of the international competitors such as Caterpillar falling, some Chinese heavy industry enterprises still maintains powerful increase in concrete mixer sale.
Caterpillar has said that the first quarter he overestimated the Chinese market needs for construction equipment, and he expected sales in China will face 5% to 10% decline this year.