Archive for the ‘Uncategorized’ Category

Direct Fuel Injection Engines   Leave a comment

It is interesting to note that in China, customers don’t like fuel injected engines. You find these more often than not in International Brand machines, such as Cat, Hitachi, Komatsu.

Direct Fuel Injection is supposed to increase output of the engine while also reducing fuel use. These engines are designed to take modern low sulfur engines as they run best on these types of fuels which are now mandated in western countries. In previous years, the sulfur content of diesel sold in western countries was 500 parts per million. In recent years, in order to reduce pollutant footprint, governments in the west have mandated that diesel must be reduced to 15 parts per million. In doing so, engines needed to become more sophisticated to pun on these low sulfur content fuels. Likewise, putting high sulfur content desiel in these engines deisgned for 15 parts per million sulfur is bad for the engine.

The problem in China is that the only diesel sold contains 1000 parts per million. Putting this fuel into engines designed for low sulfur content is cuasing the engines to run poorly. The power output suffers, as well as the fuel economy.

This is why in China, people avoid fuel injection engines.

In years past


Posted April 4, 2011 by chinacetrader in Uncategorized

Xushui, Hebei Province   Leave a comment

Just visited the village of Xushui which is in Hebei Province, about 100km South West of Beijing. Since the mid-80’s Xushui has become of used equipment trading hub for North China and for all of China. This was simply a farming village but now has over 240 “yards”. The yards are relatively small and each yard has anywhere from 5 to 20 machines in the yard on offer. Usually in the back of the yard is the repair area. The repair area is just an open air place where the tools are located the customer repairs the machine. There is no workshop.

All the owners of these yards are from the village and they don’t let anyone else set up yards. There are now two streets. The original old street, and in the last few years, they have expanded to make a second street about 300m down the road from the original street.

99% of the machines sold in this village are domestic built machines from either domestic OEMs or foreign invested OEMs. Each broker tends to “specialize” in a product line. Either they do Excavators, Wheel Loaders, Road building equipment (rollers and Motor Graders). There were a few who sold compressors/forklifts/generators. So a guy who does road building will only have compaction and motor graders in his yard. A guy who does wheel loaders will only have wheel loaders in his yard.

There were no cranes to speak of, nor paving equipment, nor bull dozers.

Word in the market is that times are tough. The period from the end of Chinese New Year (Jan/Feb) to June is considered the peak season for equipment trading. Some 60% of all purchases (new and used) are made during this period.

Reports from the UE markets in Shenzhen, Shanghai and Xushui are all indicating that purchases are down 50% compared to years past. This is believed due to the governments attempt to reign in inflation and slow down the economy. The government stated that its GDP target this year is 7% (low by traditional standards) and the banks have been strictly tightening credit, contributing to the slowing demand in equipment and a slow down of the economy overall.

Customers come from all over China to buy used equipment from these yards. As usual, these brokers suffer from serious credibility problems and many people complain about being “cheated” from this market. It is defiantly a buyer beware market.

Posted April 4, 2011 by chinacetrader in Uncategorized

Fake Dynapacs   Leave a comment

I was recently offered two machines from a broker in Shanghai. One was said to be a 2003 Dynapac CA351D Smooth Drum Vib Roller and the other a 2002 Dynapac Pad Foot Compactor. The supplier sent us photos and serial numbers. They included a photo of the serial number place for the roller and a photo of the serial number plate for the engine of the compactor.

It was quite obvious from the photos of the serial number plates that these plates were not authentic. The model and serial numbers etched into them were not straight and was of poor workmanship.

Secondly, we went about trying to independently verify the serial numbers to confirm the models and years. We used a serial number guide which can provide this information. Nothing added up. Firstly, Dynapac stopped making CA251D’s in 1999. The serial numbers are usually 8 digits and all start with the same three numbers. This serial number was 6 digits and the first three did not match the standard first three for this type of model. While the compactor serial number was 8 digits, it did not match with anything in the serial number records.

So we decided to contact Dynapac directly and asked them if they could help and verify the info. We sent them the photos and the descriptions given.

Dynapac confirmed that the information provided by the supplier was false and that by the looks of the photos, they could tell that these machines were made jointly by Dynapac and XCMG of China when when they had a JV back in the 90s.

We went back to the supplier and confronted them with this information. Initially they tried to deny it. Then we said we would no longer buy the machines. They finally admitted to cheating and told us the true pedigree of the machines.

Based in the correct information, we renegotiated the deal and the machines were priced accordingly.

Lesson to be learned? ALWAYS verify the information provided by the supplier yourself. Never rely on the supplier to give you accurate or truthful information. If you are tricked, it is nobody’s fault but your own.

Secondly, never be afraid to contact the manufacturer to garner the correct information. It is in their own interest to cooperate and give you the accurate information and they almost always cooperate.

Posted March 13, 2011 by chinacetrader in Uncategorized

Welcome   Leave a comment

I got the idea to start this blog after a trip to Hefei and Shanghai this week. I have been working in China for the last 7 years and have seen it all (well maybe not all, cause nothing new surprises me anymore, but I have seen a lot).

On this particular trip, I met with a couple of Pakistani Traders who have been living and working in China for more than 10 years. They both speak fluent Chinese and they have been working to export used machines out of China to ME and South Asia.

They are not related, nor do they work with each other. Each runs his own business and affairs. With both of these guys, we got into all the scams and tricks that these Used Equipment export brokers (mostly based in Shanghai) run on unsuspecting foreign clients who try to buy UE from them.

I had heard many of the stories before, but they both told me of some new ones these guys have run. It is simply amazing what these guys will do.

So I thought, as one of the few westerners living and actively working in the construction machinery industry in China, I should set up my own blog to discuss the various aspects of the trade in China. Some will  be good, some will be bad, but I will try to give an honest view, at least from my perspective.

So this is my first post and hope to follow up with many more posts in the future. Please feel free to add you comments or ask questions and I will try my best to give you some answers.

Posted February 18, 2011 by chinacetrader in Uncategorized

Tagged with ,