Caterpillar eyes China opportunities brought by reforms

BEIJING -- Despite the moderation of economic growth rate, China still represents a huge market for multinational businesses, in which Caterpillar intends to continue to invest and embrace opportunities in next 40 years, said Caterpillar CEO Doug Oberhelman.

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The shift from a double-digit growth to a medium-high growth about 7.5 percent is inevitable, and no economy can grow at a double-digit rate for ever, so this is very normal, Oberhelman said in an exclusive interview with Xinhua.

Even a growth rate of 7.5 percent is a very good one, more than double of that in the United States, Oberhelman told Xinhua on the sidelines of the Asia-Pacific Economic Cooperation (APEC) meetings in Beijing.

China's gross domestic product (GDP) expanded 7.3 percent from a year ago in the third quarter, compared with 7.5 percent in the second quarter. The growth in the July-September period marked the slowest quarterly expansion since the first quarter of 2009, but was largely in line with market expectations.

"The Chinese economy is expected to go through a slower but more sustainable growth as well as cycles that we have seen in the United States and Europe. This is a very normal trajectory for our business, one that we are used to dealing with," said Oberhelman, also chairman of the company.

He said that it is the very natural progression around the world, adding that the economy is shifting to a consumer-driven one and there is a lot China can grow to get there.

"Today China is the largest equipment market in the world. I don't think that is the case in 1975. We have seen tremendous market expansion opportunities," said Oberhelman, whose company, the world's leading maker of construction and mining equipment, completed the first sale of 38 pipe layers to Chinese market and set up a sales office in Beijing in the mid 1970s.

"The sustained rise of China' s economy is a marvel. It is an inspiring example of how strong leadership dedicated to progress can transform a nation and lift millions out of poverty," he said.

"Caterpillar welcomes, and will continue to support China' s efforts to further transform its growth model and comprehensively deepen reforms," said Oberhelman, saying both countries and companies need continuous reforms to generate growth momentum.

He said the company has benefited from the increasing market opportunities created by economic reforms over the past decades in China, where it has built a cross-country footprint with about 16,000 employees, nearly 30 manufacturing facilities, four R&D centers, and three logistics and parts centers.

"We are here not for the next year or ten years. We are here for the next 40 years," he stressed, adding that "China takes a long view, and companies should take a long view too."

He said the slower Chinese growth rate would not mean shrinking of the company's assets based in China at all, probably a slower rate of expansion.

China has just pledged to contribute $40 billion to set up a Silk Road Fund to strengthen connectivity and improve cooperation in the country's neighborhood.

"We are always interested in infrastructure programs," said Oberhelman, adding that typically countries that have invested in infrastructure over years will become more competitive and the Silk Road initiative is exactly one example which can help connect a tremendous number of countries and people.

The fast growth of Asia-Pacific economy cannot be achieved without cooperation among APEC member economies, and further economic collaboration is expected to happen in coming years, he said.

"APEC leaders showed great vision when they committed to achieve free and open trade and investment for APEC member economies referred to as the 'Bogor Goals.' They knew this would help the region grow and prosper. I'm glad to see them continue to build upon this vision," said Oberhelman.