Western manufacturers see drop in Chinese demand

Western industrial firms are seeing a pronounced slowdown in Chinese demand, particularly for capital goods such as earthmoving equipment and automation technology, the Financial Times reported. Comments from many firms’ quarterly reports caution that the short-term outlook for sales to China has slowed considerably. German industrial giant Siemens (SI.NYSE, SI.DB) said last week that Chinese orders had fallen 16% in the company’s first fiscal quarter, though it hopes to return to growth in China by the fourth quarter. US equipment firm Caterpillar (CAT.NYSE) also reported that it had seen sales of new machines fall in China last year, while elevator maker United Technologies (UTX.NYSE) said demand in the fourth quarter fell to 7%, down from a yearly average of 20%. Many analysts say the effects of the slowdown in China’s property market may continue for some time. “China has no choice but to switch from an investment-driven to a consumption-driven economy,” wrote analysts at Societe Generale. “Infrastructure, construction and mining-related industries should see their growth rates wane accordingly.”