Chinese billionaire Liang Wengen, who heads the nation’s biggest machinery maker, called on the country’s new leadership to give more space for private enterprises to grow.
Liang, chairman of Sany Heavy Industry Co. (600031) and founder of parent company Sany Group Co., spoke at a briefing yesterday in Beijing as part of the Communist Party congress that opened Nov. 8 to begin a once-a-decade leadership change. Liang is one of 27 delegates from the private sector attending the meeting, according to the official Xinhua news agency.
In his speech at the opening of the congress President Hu Jintao pledged to “deepen economic structural reform” and to “enhance the vitality of the state-owned sector” while encouraging the development of the non-public sector. A February report by the World Bank and Development Research Center of China’s State Council said the new leadership must overcome opponents of change, including state-owned companies and banks.
Liang said it wasn’t clear whether state-owned enterprises were advancing and private companies were retreating. “If state-owned enterprises can keep reducing in numbers this is a good thing for China’s development and this is what I hope for.”
The dominance and expansion of state-owned enterprises has inspired a new four-character Chinese aphorism:’The state advances and private companies retreat,’ ’’ Liang said.
Private entrepreneurs “hope the new generation of leaders will continue to reform and open the market, which means fine- tuning the relationship between the government and the market, deepening reforms so the market’s ability to allocate resources will be stronger, and provide more space for private enterprises to develop,” Liang said.
Liang is worth $5.1 billion as of Friday, according to the Bloomberg Billionaires Index. He is the sixth-richest individual in mainland China. His fortune has dropped 27 percent so far this year, according to data from the index.
Sany Heavy, along with Caterpillar Inc. and Hitachi Construction Machinery Co., has cut production of diggers in China amid an equipment glut and a seven-quarter slowdown in economic growth.
The company’s excavator sales, its second-biggest revenue contributor, fell 27 percent to 2,034 units in the third quarter, according to data compiled by Nomura Holdings Inc.
The Changsha, Hunan-based company posted a 59 percent drop in third-quarter net income to 714 million yuan ($114 million) based on domestic accounting standards, according to a filing to the Shanghai stock exchange on Oct. 29. Sales fell 18 percent to 8.9 billion yuan while accounts receivable jumped 83 percent to 20.7 billion yuan as of Sept. 30 from nine months earlier, according to the statement.
“Sany’s current performance is slightly lower compared with last year, but it’s not a drastic decline,” Liang said yesterday, without specifying whether he was talking about the listed company or the parent. “This is a normal adjustment due to the adjustment in China’s economy. We still have much room to grow.”
Sany Group aims to derive 40 percent to 50 percent of its sales from overseas in five years through expansion of the Putzmeister brand and through other investments, Liang said yesterday. The company currently derives 15 percent of sales from outside the country, he said at the Nov. 10 briefing.
Sany Heavy bought Putzmeister Holding GmbH, Germany’s largest cement-pump maker, for $653 million, including debt, in April 2012.
Liang said Sany “won’t exclude more acquisitions in Europe as there are opportunities due to the European debt crisis.”
The company has no plans to expand in Japan in the next five years, Liang said, describing the market as “very protected and hard to enter.”
To contact Bloomberg News staff for this story: Daryl Loo in Beijing at email@example.com
To contact the editor responsible for this story: Jason Gale at firstname.lastname@example.org