British media: China's concrete industry has a financial bubble

British "Financial Times" June 4 article, original title: Concrete is the focus of China's bubble worries

Concrete has been the core of China's economic growth for many years, and speculators entering the bank have never retreated. Small concrete mixers commonly found on construction sites are rarely owned by the company. It is said that in recent years, it has been common for ordinary Chinese household loans to purchase mixers and then rent out to collect cash.

Many people are worried that the concrete industry, which is an important part of the industry, has also produced a financial bubble. Some of the major players in China's concrete machinery sector, the heavy industry, are in the shadow of the complex financial weaving of banks, machinery manufacturers and concrete producers.

They rely on supplier financing to promote sales of concrete mixers. But there are concerns that the mixer buyer will use a new machine as a collateral in exchange for more loans. They then sold the unprocessed concrete to cash-strapped property developers.

According to market research conducted in Jiangsu, more than half of the concrete mixers sold by some heavy industry companies in the first quarter have never been activated. The buyers deposited the machine in the warehouse and only wanted to use the mortgage to get funds to pay wages, electricity and purchase materials. “In order to get more loans, they will buy more machines that exceed demand,” said the analyst who participated in the survey.

At present, Beijing is trying to suppress the real estate industry to balance the economy, instructing banks to reduce lending to the industry, leading many developers to withdraw from the market. Despite this, while sales of international competitors such as Caterpillar declined, some Chinese heavy industry's mixer sales continued to grow strongly. In contrast, Caterpillar said that the first quarter overestimated the demand for construction equipment in the Chinese market, and it is expected that sales in China this year will face a 5% to 10% decline.