China Engineering Machinery Trade Network: The overseas export of engineering machinery is thriving, but there are underlying concerns.

The Chinese engineering machinery industry in 2012 always gave a sense of striving hard and self-improvement.

The nearly year-long industry adjustment period has not affected the confidence of Chinese engineering machinery companies. Strengthening independent innovation, increasing promotional efforts, and honing internal skills have all become essential paths for companies to explore the market and enhance competitiveness. It is especially worth mentioning that while domestic sales have generally declined, China's engineering machinery exports have surged, showing a positive trend across the board.

Data shows that in the first quarter, the entire industry exported a total of 1,693 excavators, a year-on-year increase of 87.9%, with an export share of 3.8%, up 2.6 percentage points year-on-year; 7,548 loaders were exported, a year-on-year increase of 38.2%, with an export share of 14.7%, a significant increase of 6.9 percentage points year-on-year; exports of bulldozers, rollers, and other products also grew rapidly, with the main industry export shares maintaining a rapid upward momentum.

From the sharply rising export growth data, we can see that China's engineering machinery industry has fully launched its overseas layout, and the international market performance of Chinese engineering machinery companies is commendable.

In the past year of 2011, Shandong Lingong exported 3,819 loaders, generating foreign exchange earnings of 126 million USD. The total annual export volume of loaders ranked first in the national industry, becoming a brand in China's loader industry.

From January to April 2012, Shandong Lingong exported 2,104 loaders, a year-on-year increase of 104.07%, maintaining its position as the national leader in export volume.

However, it cannot be ignored that while China's engineering machinery export market is growing against the trend, intense situations are unfolding: the international political situation is turbulent, the European debt crisis is shaking the world economy, and emerging markets are still unstable, all of which make us realize that exporting engineering machinery overseas comes with underlying concerns.

Political turmoil in the Middle East and North Africa affects oil energy.

Firstly, the chaotic situation in the Middle East will continue. Japanese international political expert Nobuo Asai points out that in Egypt after Mubarak's resignation, the military government is seeking to rule the country, which has provoked strong resentment from the people, leading to ongoing violent conflicts; the escalation of tensions between Iran and the United States has intensified the situation in the Middle East.

Secondly, the situation in Africa remains turbulent, with security issues becoming prominent. The conflicts between North and South Sudan continue, with increasingly fierce struggles over oil; the war in Libya has led to a large number of weapons going missing and armed personnel roaming, significantly enhancing the equipment levels and development space of anti-government armed groups and terrorist organizations in West Africa.

However, the countries in the Middle East and North Africa, which are always in a state of chaos, possess rich oil resources. Their unstable political situation will directly lead to tightening energy supplies for our country. Due to the social turmoil in the Middle East and North Africa affecting international oil supply and transportation to a certain extent, it has increased the uncertainty of international oil prices in the medium to long term. As the lifeblood of industrial society, the instability of crude oil prices will further push up global economic inflation. If the situation escalates, it will inevitably affect China's economic construction, which will not be good news for the Chinese engineering machinery industry that has already entered a harsh winter. The saying "a single hair can move the whole body" in Chinese and the "butterfly effect" often mentioned in the West will be confirmed in this matter.

Although the current Middle East and North Africa are important markets for China's engineering machinery exports, the instability factors in these regions may very likely influence the development of Chinese engineering machinery through other forms, and the hidden dangers behind this cannot help but cause concern.