China is facing a tough task in upgrading its industries, a senior executive from U.S.-based construction equipment maker Caterpillar said Monday.
"Industrial upgrading is at the top of the agenda for China's further economic reforms. China needs a strong industrial and manufacturing system to support its goal of evolving from a large industrial country to a strong one," said Chen Qihua, vice president of Caterpillar Inc.
China's manufacturing industry, which has slowed amid slack external demand, is being challenged by poor innovation, excessive competition for low-end products and insufficient core components and key technologies, Chen said.
The overcapacity of low-end products has been a problem for China's construction equipment industry, Chen said.
China's economic growth fell under 8 percent for the first time since 1999 last year, mainly due to cooled manufacturing production and property investment.
A new wave of industrialization will require technologically advanced products, better efficiency, lower resource consumption and less impact on the environment, Chen said.
"Urbanization, technological innovation, new energy development, energy-saving efforts and emission reduction will become a driving force for China's growth over the next decade," he said, adding that Caterpillar has full confidence in the sustainable growth of the economy.
A full-year economic growth target of 7.5 percent was specified in a government work report delivered to the first session of the 12th National People's Congress last week.
Caterpillar's global revenues in 2012 increased 10 percent year on year to 65.88 billion U.S. dollars, down from 41 percent in 2011 amid global economic uncertainties.