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Last year marked a real milestone in the global plastics machinery market, with China overtaking Germany to become the leading manufacturer of production equipment. According to figures from the German machinery manufacturers association VDMA, China secured 23.5% of an estimated global market of around €16bn, compared to Germany's share of 22.5% (see our full report on page 13).

It is not, perhaps, a milestone the German machinery sector would wish to mark as it moves closer to the autumn K fair in Düsseldorf, traditionally its global showcase. The question, however, is whether China will be able to hold onto that leading position.

Few will be surprised to hear that the Chinese economy fared well during the economic downturn. China's stimulus measures ensured its GDP growth remained above 8% for every quarter through 2008 and 2009. Chinese manufacturing has continued to invest in new equipment and its plastics machinery producers have benefited accordingly.

Figures from the country's CPMA trade association show that domestic sales of plastics machinery were down by 14% in 2009 to around €3.5bn. However, those figures mask a shift to local producers - sales of domestically-manufactured equipment were up by 20% to around €2.5bn. It seems that, squeezed by recession, Chinese processors cut costs by buying locally.

However, while German machinery makers are export-oriented, China's machine producers are, with only a few exceptions, focused locally. As the global economy improves, the country's machine suppliers may struggle to deliver the high levels of productivity and support that customers in China and beyond will need to compete internationally.

To be a world leader you have to have world leading production capabilities - even in China. Last year, Chinese companies imported German plastics and rubber machinery to the value of €357m - equivalent to around 10% of the total Chinese market.

After seeing a value decline of 30% in 2009, the German plastics machinery sector is reporting some recovery this year - it predicts an 11% improvement for 2010. And as global markets continue to strengthen, plastics processors in China and the rest of the world will want to invest in equipment that gives them the highest levels of productivity. That is likely to mean they will be buying from Germany for some time to come.

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