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Agricultural Equipment in China

Demand to register doubledigit growth through 2015
Demand for agricultural equipment in China reached ¥135 billion in 2010, accounting for 18 percent of the world market. Demand is projected to grow 10.8 percent annually to ¥225 billion in 2015. Growth will be supported by favorable government policies, improved access to equipment through agricultural machinery co-operatives, and healthy expansion of agricultural activity.

Planting, fertilizing equipment to see fastest gains
Tractors are the most significant type of agricultural equipment in China, accounting for 30 percent of total demand in 2010. Large, high powered tractors have greatly benefited from the Chinese government’s subsidy policies and will continue to see strong growth over the forecast period. However, small tractors, because they are more affordable and practical for the average farming household, will continue to account for a greater share of demand. The high price of harvesting machinery units has largely been responsible for it having the lowest penetration rate of all agricultural equipment, though the segment will register above average growth through 2015, driven by increases in farmers’ incomes. Planting and fertilizing equipment will see the fastest gains as Chinese farmers continue to adopt a wider range of farming equipment.

Shipments of agricultural equipment are projected to rise 12.2 percent annually to ¥258 billion in 2015. China’s trade surplus will expand to ¥33 billion, primarily due to improvements in the quality and technology of domestic products, as well as low tariffs on exports.

Northeast region to exhibit most rapid demand growth
While all six regions in China will see strong demand growth through 2015, the terrain, climate, and economic condition of each region will play a significant role in relative growth. The core agricultural regions of the Central-North, Central- East and Central South, which together accounted for 74 percent of agricultural equipment demand in 2010, will continue to benefit from higher income levels and better developed infrastructure. Although it is one of the smaller regional markets for agricultural equipment, the Northeast will continue to see the fastest growth in demand through 2015. Part of the reason is that the Northeast -- while representing just over eight percent of China’s total land area -- has nearly 20 percent of sown land. More importantly, the Northeast has one-third of national plain areas. Because many areas of the Northeast are flat, farms have sizable expanses of level land, making the application of large agricultural equipment practical.


PRESS RELEASE

Demand for Agricultural Equipment in China to Reach 225 Billion Yuan in 2015

Demand for agricultural equipment in China reached 135 billion yuan in 2010, accounting for 18 percent of the world market. Demand is projected to grow 10.8 percent annually to 225 billion yuan in 2015. Growth will be supported by favorable government policies, rising income levels, improved access to equipment through agricultural machinery co-operatives, and healthy expansion of agricultural activity. These and other trends are presented in Agricultural Equipment in China, a new study from the Beijing office of The Freedonia Group, Inc., a Cleveland-based industry research firm.

A large population and shrinking rural labor force, combined with limited arable land and low farming efficiency, create a potential risk of food shortage in China. Enhancing farming mechanization is not only important to the development of the industry but also vital to increasing agricultural production. The Chinese government’s Twelfth Five-Year Plan calls for the development of large, multi-function, higher-value products, signaling its intention to boost the country’s mechanization rate. Furthermore, the Chinese government’s subsidies for equipment purchases have leapt from 70 million yuan in 2004 to 17.5 billion yuan in 2011 and are projected to continue to rise through 2015.

Tractors are the most significant type of agricultural equipment in China, accounting for 30 percent of total agricultural equipment demand in 2010. Large, high powered tractors have greatly benefited from the Chinese government’s subsidy policies and will continue to see strong growth over the forecast period. However, small tractors, because they are more affordable and practical for the average farming household, will continue to account for a greater share of demand. Harvesting machinery’s high average price per unit has largely been responsible for it having the lowest penetration rate of all agricultural equipment. Improving the mechanization rate through developing the rice and corn harvester market will be a key strategy of manufacturers. Planting and fertilizing equipment will see the fastest growth as Chinese farmers continue to adopt a wider range of farming equipment. Harvesting equipment is the only other type to see above average growth through 2015, driven by increases in farmers’ incomes.

  • INTRODUCTION
  • EXECUTIVE SUMMARY
    • Table AGRICULTURAL EQUIPMENT DEMAND IN CHINA (billion yuan)
  • MARKET ENVIRONMENT
    • General
    • Economic Overview
      • Recent Economic Performance
      • Economic Outlook
        • Table GROSS DOMESTIC PRODUCT OF CHINA
    • Demographic Overview
      • Population
        • Table POPULATION OF CHINA (million persons)
      • Rural Population
        • Table RURAL POPULATION IN CHINA BY REGION (million persons)
    • Currency Exchange Rates
      • Table CHINESE CURRENCY EXCHANGE RATES, 2000-2010 (Chinese yuan per foreign currency)
    • Industrialization & Manufacturing Trends
      • Table MANUFACTURING VALUE ADDED IN CHINA (billion yuan)
    • Arable Land Outlook
      • Table ARABLE LAND TRENDS IN CHINA, 2000-2010
    • Agricultural Land Usage
      • Table AGRICULTURAL LAND USAGE BY CROP (million hectares)
    • Labor Force Productivity in Agriculture
      • Table LABOR FORCE PRODUCTIVITY IN AGRICULTURE IN CHINA (million persons)
    • Agriculture Sector Outlook
      • Agricultural Output
        • Table SELECTED AGRICULTURAL PRODUCT OUTPUT IN CHINA (million tons)
      • Agricultural Value Added
        • Table AGRICULTURAL VALUE ADDED IN CHINA (billion yuan)
    • The Twelfth Five Year Plan
  • OVERVIEW
    • Supply & Demand
      • Table AGRICULTURAL EQUIPMENT SUPPLY & DEMAND IN CHINA (billion yuan)
    • Pricing Trends
      • Table SELECTED AGRICULTURAL EQUIPMENT PRICING IN CHINA (000 yuan/unit)
    • Policies, Regulations & Standards
    • Agricultural Machinery Co-Operatives
    • Product Development & Technology
    • International Environment
      • World Outlook
        • Table WORLD AGRICULTURAL EQUIPMENT DEMAND BY REGION (billion US dollars)
      • Foreign Trade
        • Table CHINESE FOREIGN TRADE IN AGRICULTURAL EQUIPMENT (billion yuan)
  • PRODUCTS
    • General
      • Table AGRICULTURAL EQUIPMENT DEMAND IN CHINA BY TYPE (million yuan)
    • Farm Tractors
      • Table FARM TRACTOR DEMAND IN CHINA
      • Small Farm Tractors
        • Table SMALL FARM TRACTOR SUPPLY & DEMAND IN CHINA
      • Large Farm Tractors
        • Table LARGE FARM TRACTOR SUPPLY & DEMAND IN CHINA
    • Harvesting Machinery
      • Table HARVESTING MACHINERY DEMAND IN CHINA
      • Combine Harvesters
        • Table COMBINE HARVESTER SUPPLY & DEMAND IN CHINA
      • Other Harvesting Machinery
        • Table OTHER HARVESTING MACHINERY SUPPLY & DEMAND IN CHINA
    • Plowing & Cultivating Machinery
      • Table PLOWING & CULTIVATING MACHINERY DEMAND IN CHINA
      • Plowing Machinery
        • Table PLOWING MACHINERY SUPPLY & DEMAND IN CHINA
      • Cultivating Machinery
        • Table CULTIVATING MACHINERY SUPPLY & DEMAND IN CHINA (million yuan)
    • Planting & Fertilizing Machinery
      • Table PLANTING & FERTILIZING MACHINERY DEMAND IN CHINA
      • Planting Machinery
        • Table PLANTING MACHINERY SUPPLY & DEMAND IN CHINA (million yuan)
      • Fertilizing Machinery
        • Table FERTILIZING MACHINERY SUPPLY & DEMAND IN CHINA
    • Other Agricultural Equipment
      • Table OTHER AGRICULTURAL EQUIPMENT DEMAND IN CHINA (million yuan)
      • Seed Processing Machines
        • Table SEED PROCESSING MACHINERY SUPPLY & DEMAND IN CHINA (million yuan)
      • Irrigation Equipment
        • Table IRRIGATION EQUIPMENT SUPPLY & DEMAND IN CHINA (million yuan)
      • Haying Machinery
        • Table HAYING MACHINE SUPPLY & DEMAND IN CHINA (million yuan)
      • Sprayers
        • Table SPRAYER SUPPLY & DEMAND IN CHINA (million yuan)
      • All Other
        • Table ALL OTHER AGRICULTURAL MACHINERY SUPPLY & DEMAND IN CHINA (million yuan)
    • Parts & Attachments
      • Table AGRICULTURAL EQUIPMENT PARTS & ATTACHMENTS SUPPLY & DEMAND IN CHINA (million yuan)
  • REGIONAL TRENDS
    • General
    • Regional Demographic & Economic Trends
      • Population Patterns
        • Table POPULATION OF CHINA BY REGION (million persons)
      • Economic Outlook
        • Table GROSS DOMESTIC PRODUCT OF CHINA BY REGION (billion yuan)
    • Regional Manufacturing Value Added Outlook
      • Table MANUFACTURING VALUE ADDED IN CHINA BY REGION (billion yuan)
    • Regional Agricultural Outlook
      • Table AGRICULTURAL VALUE ADDED IN CHINA BY REGION (billion yuan)
    • Regional Sown Land
      • Table GROSS SOWN AREA IN CHINA BY REGION (million hectares)
    • Regional Agricultural Equipment Demand
      • Table AGRICULTURAL EQUIPMENT DEMAND IN CHINA BY REGION (million yuan)
      • Central-North
        • Table CENTRAL-NORTH REGION OF CHINA: AGRICULTURAL EQUIPMENT DEMAND (million yuan)
      • Northeast
        • Table NORTHEAST REGION OF CHINA: AGRICULTURAL EQUIPMENT DEMAND (million yuan)
      • Central-East
        • Table CENTRAL-EAST REGION OF CHINA: AGRICULTURAL EQUIPMENT DEMAND (million yuan)
      • Central-South
        • Table CENTRAL-SOUTH REGION OF CHINA: AGRICULTURAL EQUIPMENT DEMAND (million yuan)
      • Southwest
        • Table SOUTHWEST REGION OF CHINA: AGRICULTURAL EQUIPMENT DEMAND (million yuan)
      • Northwest
        • Table NORTHWEST REGION OF CHINA: AGRICULTURAL EQUIPMENT DEMAND (million yuan)
  • INDUSTRY STRUCTURE
    • General
    • Industry Composition
      • Table REVENUE DATA: SELECTED AGRICULTURAL EQUIPMENT COMPANIES, 2010 (million yuan)
    • Market Share
    • Product Development & Manufacturing
    • Marketing & Distribution
    • Financial Issues & Requirements
    • Mergers & Acquisitions
    • Cooperative Agreements
      • Table SELECTED COOPERATIVE AGREEMENTS
    • Foreign Participation in the Chinese Market
      • Legal & Regulatory Issues
      • Joint Ventures
      • Wholly Owned Foreign Enterprises
      • Representative Offices
    • Company Profiles
      • Anhui Changjiang Agricultural Machinery Company Limited
      • Changfa Group
      • Changzhou Dongfeng Agricultural Machinery Group Company Limited
      • China National Machinery Industry Corporation
      • Chinese Academy of Agricultural Mechanization Sciences
      • Chishan Group Company Limited
      • Chongqing Hesheng Industry Company Limited
      • Deere & Company
      • Fiat Industrial SpA
      • Foton Lovol International Heavy Industries Company Limited
      • Guangxi Qinzhou Lishun Machinery Company Limited
      • Jiangsu Jianghuai Engine Company Limited
      • Jiangsu Lianyungang Huaxuan Machinery Company Limited
      • Kubota Corporation
      • Liuzhou Wuling Motors Company Limited
      • Luoyang Sida Agricultural Machinery Company Limited
      • Mahindra Yueda Yancheng Tractor Company Limited
      • Nantong FLW Agricultural Equipment Company Limited
      • Nonghaha Group
      • Shandong Changlin Machinery Group Company Limited
      • Shandong Dafeng Machinery Company Limited
      • Shandong Huaxing Group Company Limited
      • Shandong Jinyi Machinery Manufacture Company Limited
      • Shandong Juming Group
      • Shandong Shifeng Group Company Limited
      • Shandong Wuzheng Group Company Limited
      • Shijiazhuang Agricultural Machinery Company Limited
      • Tong Yang Moolsan Company Limited
      • WORLD Group
      • Xi'an Yaao Agricultural Machinery Company Limited
      • Yanmar Company Limited
      • Zhejiang Sanlian Combine Manufacturing Company Limited
      • Zhejiang Sifang Group Corporation
      • Zhengzhou Sanzhong Harvesting Industrial Company Limited

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