I recently accompanied clients to visit a few Chinese mining machinery suppliers. Conversing with these suppliers face to face helped me form a picture of the current work status of these companies, and afforded me a glance at the Chinese mining machinery industry generally. The following are some observations that made an distinct impression on me:

• Less busy

The worldwide financial crisis has inhibited cash flow on expansions and new projects in the mining industry. Almost all the companies I visited experienced order cancellations. Yet Chinese companies have learned to deal with cancelled orders with more a more logical strategy. They are working together with buyers to follow up and maintain good relationships. Nonetheless, these Chinese companies have much fewer orders compared with 2007 and early 2008. I saw 8-10 sets of equipment standing in the open area of one supplier’s factory waiting for collection. The supplier told me that at the same time last year, there was a great deal more equipment in the open area and the yard was full of finished products and trucks that came for collection.

• Innovation

Although the market is at the bottom, the suppliers are all very optimistic and spending more time on R&D. I attended ‘Australia Sino IronФ7.93m×13.6m Ball Mill Factory Test Run & Delivery Ceremony’ hosted by CITIC Heavy Industry. TheФ7.93m×13.6m ball mill is the largest mill manufactured in the world and totally developed and manufactured by CITIC HIC. The other private mining equipment company I visited said they have over 100 engineers working in their R&D department and develop on average 10 new products every year.

• Expanding overseas market

Although I know that the Chinese mining equipment industry is expanding its overseas markets, what I saw and felt during this visit was still very surprising. The companies I visited all have a large international business department with 20-30 people. The people receiving me generally spoke good English, were sensitive to western culture and have accumulated remarkable knowledge and experience in dealing with orders, negotiations and crises with overseas buyers. Some of them have started to actively approach overseas clients by searching on the Internet and sending emails directly, or attending exhibitions.

There is no doubt that the Chinese mining equipment industry still has a long way to go before their manufacturing capability and after-sale service can be recognized internationally, but this objective could be attained much sooner than when many international buyers assume, especially those who never come to China and see these factories for themselves.