With heavy investment, Caterpillar aims to be leader in China's machinery equipment industry

HONG KONG, Feb. 27 (Xinhua) -- The year 1978 was historic for China as it began opening up to the outside world. It was also in that year when Caterpillar, the world's largest manufacturer of construction and mining equipment, opened its first office in the Chinese capital Beijing.

But even those people, who made this brave and wise decision for Caterpillar, couldn't have imagined that 30 year later China would boast the world's biggest market for machinery equipment, or that China would become Caterpillar's second most important market, only after its home country, the United States.

Group President Richard Lavin, who joined Caterpillar in 1984, told Xinhua in a recent interview in Hong Kong that the reason Caterpillar entered in 1978 was because they had recognized China would be a very significant market.

Before that, in 1975, Caterpillar had made its first sale of 38 pipe layers to China through Hong Kong companies. It was among the first batch of U.S. manufacturers to enter the Chinese mainland market.

And today, the Chinese market is important simply because of its size. If Caterpillar wants to be the global industry leader in infrastructure equipment, it has to be leader in China, Lavin said.

"It's the size of the market that prompts us to make the level of investment we made in China over the past five years and we plan to make over the next five years."

He declined to disclose the proportion of Caterpillar's revenue in China to its global revenue and the market share of its major products in China.

"But I can tell you that China represents a growing percentage of Caterpillar's global sales revenue.... We've dramatically increased our total machine manufacturing capacity inside China over the past five years. And we plan to more than double our capacity over the next five years."