NEW YORK: Caterpillar Inc (CAT) has begun exporting Chinese-made machinery to the Middle East and Africa, as part of a plan to
offset a dip in China’s economic growth, a top official at the company said in an interview.
The move by the world’s largest maker of cons-truction equipment is only temporary and the company still expects China to remain its fast-
est growth market, Richard Lavin, who oversees Cater-pillar’s business in China, told Reuters.
Lavin declined to name specific countries in the Middle East and Africa where the Chinese-made goods are headed, or list the amount of product, but noted front-end loaders and excavators comprise the bulk of exports.
“The global economic situation, especially in China, has presented us a short-term opport-unity to serve very
specific markets with some supplies over the last half of 2012,” he said, adding, “But that is not part of overall strategy for China.”
China’s economy has been pressured this year by a drop in its domestic property market and high inflation, with the economic growth rate slowing to 7.6 per cent in the second quarter, the slowest pace in more than three years. That is reflected in waning demand for the machinery Caterpillar makes at its 18 Chinese plants, and caused a glut of inventory.
The pending change in China’s top political leadership later this year and early next will not affect Caterpillar’s expansion plans, Lavin said. Chinese President Hu Jintao must retire from running the country’s Communist Party later this year and from the presidency
in early 2013.
“China has shown itself capable to manage leadership transitions seamlessly,” Lavin said. “I think what we can expect is stability in the transition, and that’s going to be good for the economy and the industry,” he added.