Equipment manufacturing industry "rescue the market like firefighting"

"Be quick, saving the city is like fighting a fire!" Speaking of this, Xiang Wenbo, president of Sany Heavy Industry, kept knocking on the coffee table in front of him.

This was the scene when he was interviewed by this reporter on the evening of 5 March. As a representative of the National People's Congress, one of the purposes of Xiang Wenbo's trip is to promote the "equipment manufacturing industry adjustment and revitalization plan" as soon as possible to introduce implementation rules, "otherwise, the effect will be discounted."

"21st Century": It is said that one of your suggestions this time is to "introduce implementation rules for the adjustment and revitalization plan of the equipment manufacturing industry as soon as possible"?

Xiang Wenbo: What I care about is first of all the revitalization plan related to my own industry (equipment manufacturing industry).

The contents of the plan are all major issues related to the development of the equipment industry. For example, the "key components" mentioned in the plan. From the current point of view, this is still the shortcomings of China's equipment manufacturing industry, and in the long run, it is a hidden worry for the development of the industry.

"21st Century": How to understand the "shortcomings" and "hidden worries"?

Xiang Wenbo: The shortcoming is that the key components are actually the core technology of the equipment manufacturing industry, but our current key components are dependent on imports. For example, 60 to 70 percent of our diesel engines rely on imports for hydraulic control components.

Why is it a hidden worry? If China's equipment manufacturing industry has developed to a certain level, when it really poses a threat to European, American and Japanese-funded enterprises, people may curb your development. In fact, there are already signs that they are already putting pressure on our partners to limit them from providing us with good parts.

"21st Century": Regarding "key components", the plan also proposes to "exempt customs duties and import value-added tax".

Xiang Wenbo: This is also a demand that our industry has been calling for for many years, but it has not been resolved.

Previously, imported equipment was not subject to tax, but imported parts were subject to tax. In other words, Chinese companies (imported parts) have to pay taxes, while foreign companies (complete machines) do not need to pay taxes when they come in.

One consequence of this is that Chinese and foreign-funded enterprises are in an unequal competitive position in the Chinese market. How big of a problem is this.

"21st Century": Why is there such an urgency for the issuance of detailed rules? In the previous crisis, how much impact was Sany Heavy Industry?

Xiang Wenbo: Now, our international market is declining very badly. Last year we grew by more than 160 percent, but this year we can be flat, or 10 to 20 percent, which is good

The reason why I call for the detailed rules to be issued as soon as possible is because the equipment manufacturing industry is facing great pressure, one is the shrinking of the market, and the second is that the currencies of many countries have begun to depreciate sharply - the euro has depreciated, the won has depreciated, and the yen has also begun to depreciate.

The depreciation of our main competitors (from these countries) means that their products are becoming more competitive.

The won, for example, has fallen by 50%, which means that their price is half cheaper; The euro also fell by 30% to 40%, which means that products from Europe also fell by 30%-40%, and the previous price advantage of Chinese companies is gone.

The revitalization plan of the equipment manufacturing industry is very good, but there is a lack of a link, that is, the implementation rules. If there are no implementation rules, it is equivalent to inoperability, and inoperability is equivalent to none. In a sense, this revitalization plan is also a bailout plan. That's why I said, "Be quick, save the market like fighting a fire", otherwise, the effect will be discounted.

"21st Century": In view of the country's large-scale stimulation of domestic demand, how is the growth of Sany Heavy Industry in the domestic market?

Xiang Wenbo: In 2008, Sany Heavy Industry's sales were 20.9 billion yuan, and the target for 2009 was 30 billion yuan.

"21st Century": "Relying on national key construction projects, large-scale development of major technical equipment independence" is regarded as a direct "stimulus plan" for the equipment manufacturing industry. As a private enterprise, how to compete with state-owned enterprises for orders?

Xiang Wenbo: I think it should be solved by a market-oriented mechanism. Whether you are state-owned or private-owned, first of all, it depends on whether you have the ability to do this.

In fact, as the policy environment becomes more and more relaxed, the difference between the so-called private and state-owned is getting smaller and smaller. I haven't seen a policy specifically for state-owned enterprises, nor have I seen a policy specifically for private enterprises. At least for now.

21st Century: How do you respond to China's economic stimulus package, which will also attract overseas competitors?

Xiang Wenbo: We call for the implementation rules to be issued as soon as possible, that is, to deal with this crisis.

We are against trade protectionism because we also want to go to other people's places. Dancing with wolves, we can't escape.

But if we don't deal with it well, people's currencies depreciate sharply, their equipment will be very cheap, and it will hit the Chinese market in large numbers, and Chinese companies can only look at it, because our RMB is very strong, and the opportunities in the Chinese market will become opportunities for others.