After two consecutive years of decline, the construction machinery industry bottomed out and embarked on an upward trend in 2025. Does this signal the start of a new growth cycle for the sector?
Su Zimeng, President of the China Construction Machinery Association, commented that with strengthened macro regulation and combined policy effects, favorable factors supporting stable operation and high quality development will keep accumulating, and the operating environment for China’s construction machinery industry will steadily improve.
Dual Engines Fuel Growth; Domestic Market Makes Steady Progress
Sustained implementation of equipment renewal policies has further unlocked market potential.
Even in the traditional off demand season, monthly domestic excavator sales have stayed above 7,000 units for four consecutive months. Except for January and May, monthly excavator sales have achieved positive year on year growth over the past 12 months.
Zhao Hao, Executive President of Guangzhou Construction Machinery Association, holds that domestic demand growth benefits from policy funding as a stabilizing force. Such funds are mainly channeled into urban renewal, utility tunnels, flood control projects and other fields, directly driving equipment demand.
According to incomplete statistics, as of August 3, China issued local government special bonds worth RMB 5.1795 trillion in 2025, consisting of RMB 2.7776 trillion in new special bonds and RMB 3.3809 trillion in refinancing bonds, with issuance pace far outpacing that of last year. Massive investment in water conservancy projects serves as a core driver. From 2023 to 2024, national investment in water conservancy construction exceeded RMB 2.5 trillion. In addition, 70% of the newly issued RMB 1 trillion ultra long term special treasury bonds directly or indirectly fund water conservancy projects. These long cycle projects with huge earth moving workload generate massive engineering demand. On July 19, the downstream Yarlung Tsangpo hydropower project with total investment of RMB 1.2 trillion officially broke ground. This mega project, whose investment equals 3.5 times that of the Hong Kong Zhuhai Macao Bridge, is expected to excavate over 500 million cubic meters of earth and rock. Industry estimates put its construction machinery procurement value at RMB 120 180 billion, and demand for large excavators, tunnel boring machines, mining trucks and other equipment will keep rising in the next 5 10 years.
Sustained equipment renewal policies further unlock market potential. The State Council’s Action Plan for Promoting Large scale Equipment Renewal and Consumer goods Trade in explicitly targets over 25% growth in equipment investment for industry, agriculture, construction and other sectors by 2027 compared with 2023, focusing on massive stock of old equipment.
Nevertheless, structural challenges persist in the domestic market. Domestic loader sales only rose 2.48% year on year in July, much lower than excavator growth. The real estate sector remains in a bottoming out phase, resulting in sluggish demand for real estate related equipment such as concrete pump trucks and tower cranes. Meanwhile, construction machinery worked for an average of 80.8 hours per month, down 6.91% year on year, with an operating rate of 56.2%, indicating incomplete recovery of equipment utilization. It still takes time for allocated policy funds to translate into tangible project workloads.
Su Zimeng stated that China implemented more proactive macro policies in 2025. By fully leveraging proactive fiscal policies and moderately accommodative monetary policies to roll out a policy “package”, enterprises will benefit more.
Exports Maintain Strong Growth; Overseas Markets Improve
Export acceleration mainly stems from eased Sino US tariff frictions, relatively resilient demand in emerging markets, and rapid urbanization in Belt and Road participating countries.
Statistics show that booming excavator exports stood out in July, with a 31.9% year on year growth rate far exceeding H1 average and marking 12 consecutive months of positive YoY growth. Notably, exports accounted for as high as 57.4% of total sales in July, taking up more than half of total volume. From January to July, cumulative excavator exports reached 64,715 units, up 13% year on year.
Since the start of this year, European market demand has marginally improved, while monthly export sales to Southeast Asia, the Middle East, South America, Africa and other regions have remained robust. Overall, overseas markets are on an upward track. Data shows that the urbanization rate of Belt and Road partner countries climbed from 48% in 2015 to 56% in 2025, with infrastructure investment demand reaching USD 1.8 trillion in 2025. Transportation and power sectors act as core fields, directly stimulating demand for medium and large size excavators.
On the corporate side, XCMG, Zoomlion and LiuGong delivered outstanding export performance in 2025.
XCMG maintains extensive global presence and exports products to more than 190 countries and regions. In August, one hundred sets of high end equipment were shipped to West Asia and North Africa under the largest single local order, making XCMG top the national export ranking.
Zoomlion boasts a sound overseas business network covering over 170 countries. Its overseas revenue rose 15.17% in Q1, with more than 30 new sales outlets added. Its traditional flagship products and new energy aerial work platforms achieved remarkable results in Europe and North America.
LiuGong presses ahead with internationalization, with multiple equipment models entering European, Zambian and Vietnamese markets. In August, 96 sets of its equipment were delivered to Indonesia, worth RMB 57.406 million.
Enterprises also face challenges when going global. News recently spread that three subsidiaries under Sany Group were fined 449 billion Indonesian rupiah (approximately RMB 197 million). Local media reported that the penalty stemmed from violations of local competition laws in truck sales in Indonesia.
Reporters interviewed Ding Huawen, Deputy Party Secretary of Qianhai Shenzhen Hong Kong International Legal Service District and Managing Partner of Huashang Lin Lili (Qianhai) Joint Law Firm, regarding risks for enterprises’ global expansion. Ding told China Industry News that many enterprises go global blindly. They focus heavily on overseas market demand yet overlook legal environments and policy risks in target markets, exposing themselves to high risks and unavoidable losses.
He advised enterprises to conduct advance extraterritorial law research for target markets and identify risks in industrial regulation, intellectual property, taxation, foreign exchange and anti monopoly. Institutions such as the Extraterritorial Law Research Center of Xiamen Maritime Silk Road Central Legal District and the Belt and Road Legal Service Federation in Shenzhen Qianhai can provide relevant services.
Ding Huawen added that cross border legal services have developed into a matrix style system to satisfy diverse demands of global bound enterprises. For example, legal service providers recruited by the “Qianhai Global Go e Service Hub” shall be capable of integrating resources for overseas park investment, finance tax, financing and marketing, and deliver comprehensive solutions.
In addition, Xue Xiaoping, a senior construction machinery expert, told China Industry News that many market reports only carry general discussions on brands, manufacturers, products and business models, which are far from sufficient. He argued that Chinese construction machinery enterprises need to take more dimensions such as global geopolitical conflicts into consideration to succeed in overseas markets.
Sector Prosperity Continues; Electrification Boasts Vast Growth Potential
Statistics from the China Construction Machinery Association show remarkable growth of electric construction machinery represented by electric loaders, forklifts and aerial work platforms.
Domestic macro data shows that China keeps promoting urban renewal and old community renovation. Enhanced fiscal and monetary policies plus increased investment in key major projects, major strategic projects, new type urbanization and new industrialization generate rigid replacement demand. Supported by non ferrous metal mines, large scale water conservancy works and high standard farmland projects, demand dividends will gradually be unlocked. Accelerated renewal of existing equipment puts excavator demand into a rational growth phase, and full year sales are projected to stay on a recovery track.
While the industry advances steadily, electrification has become a key competitive battlefield. The electrification trend for loaders is moving forward steadily. A total of 2,391 electric loaders were sold in July, hitting a record high penetration rate of 26.57%.
Data released by UK based KHL Group shows that the global construction machinery market reached USD 213.5 billion in 2024, with China accounting for over 10%. Calculated based on a 30% replacement ratio, the annual market for all electric construction machinery can reach RMB 400 billion.
Many leading enterprises are ramping up efforts. Yutong Heavy Industries launched new products covering sanitation vehicles and mining trucks in June. Firms including XCMG targeted electrification even before 2018 and are now speeding up product deployment.
Sany Group’s sales of electrified products exceeded RMB 10 billion last year and keep growing this year. On August 20, Sany Group and CATL jointly unveiled the globally first deeply forward developed “Concrete Go” electric mixer truck. Its launch demonstrates Chinese leading manufacturers’ capability to set industrial standards, and reshapes the value chain of concrete transport equipment through integration of customized batteries and cutting edge manufacturing technologies. The underlying trend is clear. Though electric excavators are currently constrained by high purchase costs, insufficient driving range, imperfect charging infrastructure and high battery maintenance expenses, electrification will eventually become the core driving force reshaping the excavator industry landscape in the long run.
In 2020, MIIT issued the Action Plan for Promoting Vehicle Electrification in Public Sectors to advance construction machinery electrification and accelerate the sector’s shift toward new energy. In January 2024, the Central Committee of the Communist Party of China and the State Council released Opinions on Comprehensively Advancing the Building of a Beautiful China, proposing “large scale adoption of ultra low and near zero emission vehicles and clean low carbon application of off road mobile machinery”. Local governments including Shenzhen, Wuhan, Jinan and Changsha also frequently issued policies to encourage electrification of off road construction machinery.
Su Zimeng said green manufacturing, green products and green construction keep moving forward. According to the China Construction Machinery Association, electric construction machinery such as electric loaders, forklifts and aerial work platforms has achieved prominent growth. Electric off highway dump trucks, excavators, cranes, bulldozers and concrete machinery have been mass produced and put into service. Meanwhile, industrial enterprises have made steady progress in developing, manufacturing and applying new energy construction machinery powered by hydrogen, methanol and hybrid systems.
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