Heavy equipment companies see light at the end of the tunnel

"There's too much capacity in this industry. We need to stop relying on this as our sole business and broaden our horizons," he said. It is also important to expand globally to off-set risks in the domestic market, he said.

Overseas business now only accounts for about 10 percent of sales. "It would be much healthier if the proportion of overseas business goes up to 35 to 40 percent," he said. Premier Li Keqiang said in his Government Work Report in early March that the nation will encourage domestic enterprises to get involved in infrastructure construction overseas and offer support to those efforts.

Customs figures showed that exports of machinery and transportation equipment went up just 2 percent last year to 6.5 trillion yuan.

Under the "One Belt, One Road" initiatives, the government has offered $40 billion for a Silk Road Fund, aiming to invest in new rail, road and port infrastructure to improve China's ties to Central Asia, Southeast Asia and Africa.

"There will be more opportunities for Chinese construction companies to get business overseas, and that means more opportunities for construction equipment exports," Zhan said.

Zhan said Zoomlion hopes to work closely with contractors to build its marketing and service network. It has already built a presence in markets including India, Southeast Asia, Africa and the Middle East.

It is also important to step up overseas mergers and acquisitions, mostly to get hold of the best technology in the industry, he said.

Zoomlion began its overseas acquisitions in the 1990s when it acquired the construction equipment manufacturer Powermole of the United Kingdom. Since then, "efforts to explore overseas merger and acquisition opportunities have never stopped. We will continue to look to Europe to fill in gaps in our technology portfolio", he said.

The key to success in overseas acquisitions, he said, lies in having the right strategy, knowing the local laws and regulations and making strong localization efforts.

"There must be local staff to ensure that your local business is sustainable," he said.

Experts said that to achieve genuine sustainability overseas, Chinese companies need a sound service network and plenty of interaction with potential clients during the product development process. Li Yizhong, president of the China Federation of Industry Economics and former minister of industry and information technology, said the service network of domestic heavy equipment companies is their weak link.

"They should extend further in their major overseas markets and provide professional after-sales services to buyers during the entire life of their products to gain clients' trust," he told a forum on the globalization of Chinese construction equipment in February.

Companies should also take advice from clients during the product development process to create "a better user experience", he said.