Japan's post-disaster reconstruction boosts export opportunities for domestic construction machinery

Earthquakes, tsunami, nuclear leakage, Japan suffered a triple disaster, and Sino-Japanese trade has thus been affected, "danger" and "machine" are now.

According to customs statistics, in 2010 exports to Japan accounted for about 8% of China’s total exports, while 13% of China’s imports came from Japan. However, in terms of incremental growth, Japan’s contribution was only 1.9 percentage points higher than the year-on-year increase of 31.3% of China’s total exports in 2010; of the 38.9% year-on-year increase in total imports, Japan contributed only 4.6 percentage points.

After resolving the nuclear power plant problem, Japan is expected to gradually begin post-disaster reconstruction work around June. According to the analysis of the 1995 Hanshin earthquake reconstruction input, the amount of reconstruction investment is expected to exceed 30 trillion yen (about 2.4 trillion yuan), most of which will be used for infrastructure construction. Japan’s post-disaster reconstruction has huge demand for building materials and steel, and Japan’s power shortage may make it difficult for local companies to meet demand. As the world's largest building materials and steel producer, it ranks among the world's top exporters of construction engineering services, and China’s related industries are expected to gain a certain share.

Zhou Fengwu, an analyst at Orient Securities, believes that earth-rock machinery such as excavators, loaders, and bulldozers are expected to be the biggest beneficiaries of the earthquake disaster in Japan. "Thanks to this tsunami, it is expected that Japan will adopt more concrete steel structures and that concrete machinery will also be the beneficiaries."

It is worth noting that post-disaster reconstruction will be based on the treatment of disaster garbage, earthquake victims, and social and public facilities in the earthquake and tsunami areas. Therefore, from the perspective of demand for construction machinery products, excavators, loaders and bulldozers and other machinery will have a greater demand in 2011.

Liu Qiyuan believes that the earthquake in Japan also highlights the risk of production in Japan, especially since the Pacific plate enters an active seismic period. Many Japanese technology and capital-intensive companies that were not willing to transfer production to China will consider transferring at least part of their production capacity overseas. Related industries may benefit from this.