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Chinese manufacturers go rural to market farming equipment

Editor: Li Kun 丨CCTV.com

10-08-2015 16:17 BJT

By Tom McGregor, CNTV Commentator

For much of China’s civilized 5,000-years' history, rural farm villages had played the most pivotal role in the economy. However, the appeal of rural life had lost its luster as Beijing embarked on a huge urbanization drive.

Numerous farmers had abandoned their fields in search of better jobs and opportunities in China's big cities. Zoomlion, one of the largest Chinese heavy industrial machinery manufacturers based in Changsha, Hunan province, stood at the forefront of the nationwide urbanization movement.

The company provided heavy-duty equipment to build streets, skyscrapers and much more, which had sustained China's economic miracle of high annual GDP (Gross Domestic Product) growth rates for the past few decades.

Nevertheless, a pro-market economy has a cyclical nature and China is no exception to that rule. But such conditions are vital to control inflation, supply gluts and irrational investments.

Shifting from industry to agriculture

According to Zomlion's 2015 mid-term financial statement, the company reported 10.6bn RMB in revenues for Jan.-June 2015; a 24.4 percent drop from the same period last year.

But, the Changsha-based machinery manufacturer disclosed a 35 percent jump in sales of its farming equipment with revenues surging to 2bn RMB for the first half of this year.

"We believe the agricultural equipment market will be a major force in driving growth for the company," Zhang Jianjun, a Zoomlion senior executive, told China.org. "This is all part of the company's long-term strategy of global expansion in countries involved in the Belt & Road initiative."

Zoomlion's strategy is not just to export its agriculture machinery, but to sell to Chinese farmers as well.

"China's goal is to produce a large-scale modern agriculture sector, which is efficient," Ma Wenjin, researcher at China Academy of Social Sciences, is quoted as saying.

Switching on rural modernization

Zoomlion harbors ambitious goals as the company expects its sales of agriculture machinery to account for 30-40 percent of corporate revenues in the next five years.

Modernizing Chinese farms to meet or exceed Western standards has a long way to go. Many Chinese farmers rely on archaic tools to till small plots of land. To succeed in a new ‘Golden Age, they must utilize the latest agronomy crop methods with access to the most-advanced mechanized farming equipment.

"To ensure effective supply of food," Liu Xian, director of China's Ministry of Agriculture Mechanization Department, told CMBOL news Website. "There is an increasing reliance on mechanization in the plowing, planting, field management and harvesting stages of production for dependable high yields."

Ghana, a farmer's testing ground

Zoomlion plans to introduce more new agriculture machinery to the global market, but they must test them beforehand.

"Technological breakthroughs will be the key to the farming equipment market," Zoomlion Chairman and CEO Zhan Chunxin told China.org. "Through innovations and updating of machinery products, strong (farms) will become stronger."

Ghana appears to be a premier location to test new farming equipment, since Ghanaian farming methods are still primitive, but the region enjoys ideal climate conditions for raising crops.

Accordingly, GhanaWeb reports that Zoomlion and Ghana-based Jospong Group have launched a large-scale farming project in the Volta Region.

Returning to the farmlands

During China's massive urbanization, Zoomlion had scored big-time profits selling its heavy-duty industrial machinery. However, the nation's boom times of annual double-digit GDP growth rates are fading into history.

Yet, Zomlion is not weeping and wailing over its dismal prospects. Instead, the corporate leadership team has re-drawn business plans to focus on the agriculture sector. That's a brilliant idea, which will dramatically benefit Chinese farmers returning home in droves to plow crops yet again.



( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )



Panview offers a new window of understanding the world as well as China through the views, opinions, and analysis of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

Panview offers an alternative angle on China and the rest of the world through the analyses and opinions of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.



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