With five joint ventures in China, Caterpillar is building on a partnership tradition it has pursued in other parts of Asia, including a recent expansion of another joint venture with Mitsubishi Heavy Industries in Japan. It is also looking to at once help fill China's aching infrastructure needs and fill new orders. But they are not alone among machine makers.
      Fellow heavy equipment manufacturer CNH Global N.V., maker of such brands as Case, Link-Belt and New Holland, announced in December that it had received a license for its second joint venture in China -- with Shanghai New Holland Agricultural Machinery Corp., Ltd., which will make up to 18,000 tractors and 16,000 engines a year by 2007.
      "Together, we expect to improve the mechanization of agriculture in China," said CNH president and CEO Paolo Monferino of the partnership with Shanghai Tractor and Internal Combustion Engine Corporation. "
      "We expect the joint venture to participate in the process of globalization of the Chinese economy and ultimately be a world-class supplier of agricultural machinery," said Li Ji Rong, general manager of STEC at the time the alliance was announced.
      Amid the dour economic signs, even AMT has managed to open a new office in China, backed in part by U.S. Commerce Department funds.
      "Their economy is continuing to grow, and that nation has huge unmet needs in infrastructure," says AMT's Robert Gardner, pointing out the importance of producing heavy machinery near its end user. "China has a viable domestic machine tool industry -- they build machines of quite good quality, and they are able to obtain motors, parts and materials just as readily as anyone else in the world."
      In the Fleet Capital survey of middle manufacturers, nearly half (47 percent) expect an increase in foreign sales in 2002, with 47 percent of those citing Asia as the next-most-likely opportunity for increased foreign sales behind Europe, and just ahead of Central America.
      "We have been shipping machines to China for seven years," says Denis Dupuis of Haas. While Haas plans to continue marketing there, there are no plans for a joint venture or technology transfer to manufacture in China.
      But the same cannot be said for that innovative Canadian screw manufacturer, Robertson, which just broke ground on a 39,000-sq.-ft. (3,600-sq.-m.) factory in Jiashan, Zhejiang Province, and expects production to begin by the end of the first quarter of 2002.
      In a sector that includes earthmovers and giant turbines, it may be the small tools and machines that enable companies and countries to gain purchase on the future.