At the beginning of 2026, China's construction machinery industry welcomed a 'good start to the year.' According to data from the China Construction Machinery Association, in January this year, China's excavator sales reached 18,700 units, a year-on-year increase of 49.5%; among them, exports reached 9,985 units, soaring 40.5% year-on-year. This means that on average, more than 600 excavators were shipped from Chinese factories to destinations around the world every day. More importantly, export volumes have exceeded domestic sales for several consecutive months, becoming the absolute driving force for industry growth.
After more than 20 years of technological advancement and capacity accumulation, China's construction machinery sector is now standing on the threshold of globalization 2.0. However, the real test has never been about piling up capacity, but about how to transform scale advantages into sustainable competitive advantages in the face of rising reverse globalization currents and trade protectionism. The year 2026 may become a watershed moment for this expedition to shift from quantitative change to qualitative transformation.
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Macroeconomic cycle: Upward trend in domestic and foreign demand
In the grand narrative of the global cyclical rotation, the prosperity of the construction machinery industry depends not only on the release of geopolitical economic dividends but is more deeply embedded in the physical cycle of capacity and inventory. If the recovery of overseas demand is regarded as the 'spatial axis' for industry growth, then the inventory cycle (Kitchin cycle) serves as the 'time axis' that determines the intensity and rhythm of industry recovery. Currently, China's construction machinery industry stands at the golden intersection of internal and external cycle resonance—externally benefiting from the surging global infrastructure investment wave, and internally undergoing the initiation of a new round of inventory replenishment. These two factors reinforce each other, jointly establishing a solid foundation for industry prosperity.
From a macro-cyclical perspective, the improvement of global liquidity conditions and the surge in regional infrastructure investment provide a broad stage for the industry. However, when zooming in to the micro level of industry operations, the inventory cycle, spanning 3-4 years, is playing a more direct role. Since 2025, with the marginal improvement in fund arrival rates in downstream real estate and infrastructure, as well as the continuous expansion of 'new infrastructure' scenarios such as mining and rural construction, upstream machinery manufacturing enterprises in the industrial chain have generally experienced a transition from 'active destocking' to 'passive destocking.'
Entering 2026, this trend has become increasingly evident. The essence of the inventory cycle is the enterprise’s adjustment to market demand expectations, and current data indicates that the industry has clearly entered the active replenishment stage. This is first reflected in the purchasing and stocking rhythm of core raw materials like steel and copper. As the 'skeleton' of construction machinery, the demand for medium-thick plates and hot-rolled coils is steadily recovering alongside the production plans of OEMs. After the Spring Festival, with the progress of major projects across regions accelerating, downstream companies are no longer satisfied with just-in-time procurement. Instead, they begin to secure supplies in advance for the upcoming peak construction season, promoting the accelerated clearing of steel social inventory. Taking medium-thick plates as an example, although social inventory remains high after the holiday, with the full resumption of infrastructure and construction machinery projects, concentrated demand release has become evident, and the inventory inflection point has clearly emerged, with the rate of destocking accelerating.
More importantly, this round of inventory replenishment is not simply a quantitative expansion but accompanies a profound structural upgrade, which forms a virtuous interaction with the enhanced competitiveness of Chinese enterprises in overseas markets. Domestically, electric products have become a key component of the replenishment structure. By January 2026, sales of electric loaders accounted for as much as 51% of domestic sales. This is not only a result of the green transition but also indicates that enterprises, facing a new cycle, are establishing a new balance between inventory and profits through high value-added products.
Overseas, this product competitiveness driven by technological iteration allows 'Made in China' to better capture the replacement demand released by mature European and American markets due to stringent carbon emission regulations. Behind the leap in China’s market share of construction machinery in Europe from 16.59% in 2025 to 35.61% is the advantage gained by domestic enterprises through their first-mover edge in electrification, seizing value heights in the global industrial chain reshaping.
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Micro Evolution: The 'Localization' Deep Cultivation of Leading Enterprises
Macro demand is only an external factor; it is the evolution of enterprise competitiveness that truly underpins going global. After years of deep cultivation, Chinese construction machinery companies have upgraded from simply exporting products to localized operations covering the full chain of R&D, production, sales, and service.
Sany Heavy Industry is a typical example of this transformation. In the first three quarters of 2025, Sany’s overseas revenue accounted for over 60%, and its overseas business gross profit margin was about 9 percentage points higher than that of domestic operations. In the European market, its excavator market share exceeded 12%; in the field of electrification, products such as electric mixer trucks, electric excavators, and electric cranes all hold the top market share in the industry. Even more noteworthy is its “localization” strategy—Phase II of the Indonesian 'Lighthouse Factory' uses digital twin technology, improving production efficiency by 30%; the Dubai supply center covers 72 countries and regions in the Middle East and Africa, reducing parts delivery cycles by 35%.
XCMG highlights the balanced advantage of being a 'full-category giant.' In the first three quarters of 2025, XCMG’s operating revenue reached 78.157 billion yuan, with 48.1% coming from exports. Its three major product groups—the earthmoving group led by excavators, the traditional advantage group led by cranes, and the strategic emerging group led by mining machinery—cover the diverse needs of overseas markets. In 2025, XCMG’s orders for medium and large excavators and loaders exceeded 100 million yuan, being deployed in bulk to the front lines of overseas mining operations.
Shantui’s path to going global reflects a differentiated 'specialized and innovative' strategy. As the domestic leader in bulldozers, Shantui’s overseas revenue reached 8.74 billion yuan in 2025, up 17.94% year-on-year, accounting for 59.79% of total revenue. Its domestic market share for bulldozers has remained above 60% for many years, solidly ranking first in the industry. In 2025, Shantui globally launched its AI strategy, introducing the world’s first 'AI intelligent bulldozer,' and established 13 overseas subsidiaries in countries including Indonesia and Australia, moving from 'going out' to 'going in.'
Liugong’s globalization layout is also remarkable. In 2025, Liugong added six overseas subsidiaries, including in Nigeria, Italy, and Peru; the second phase of its India manufacturing plant progressed steadily; and the full-value-chain layout in Indonesia gradually took shape. 'The proportion of overseas business has risen to approximately 47%, becoming a “ballast stone” for performance growth,' said a relevant Liugong official.
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Conclusion: A New Starting Point Under Cyclical Resonance
Looking ahead to 2026, Chinese construction machinery going overseas is standing at a new starting point. From a macro perspective, with the global interest rate cut cycle beginning, accelerated urbanization in emerging markets, and continuous advancement of Belt and Road projects, overseas demand is expected to maintain double-digit growth. CITIC Securities predicts that in 2026, the export growth rate of construction machinery may exceed 15%.
From a micro perspective, the competitiveness of Chinese enterprises is upgrading from 'cost-performance' to 'technological leadership.' Breakthroughs in electrification, intelligence, and AI technology have given Chinese brands the confidence to compete head-to-head with Caterpillar and Komatsu in the high-end market. At the same time, the deepening of overseas production layouts and the improvement of service networks are turning 'Made in China' into a 'global brand.'
Of course, challenges still exist. Tariff barriers in the North American market, anti-dumping investigations in the European market, and geopolitical uncertainties are all 'hidden reefs' on the way overseas. But as an industry veteran said: 'Going overseas has never been a smooth journey; it is the growth forged through storms.' For the Chinese construction machinery industry, 2026 may very well be a key year to navigate through storms and transform successfully.
(Source: Securities Star)
