Caterpillar calls China move on yuan encouraging
CHICAGO (Reuters) - Caterpillar Inc (CAT.N), the U.S. machinery giant that sells billions of dollars of earth-moving equipment and other products to China each year, said on Saturday it was heartened by China's move to gradually make the yuan more flexible, saying it would help lift U.S. exports.
"Caterpillar is encouraged by this development," said Rich Lavin, a group president with the company who is responsible for emerging markets, "and we believe over time that a stronger Chinese currency will promote more exports from the U.S. to China."
Lavin is one of six top executives at Caterpillar who report directly to the company's chief executive. When he moves to China later this year, he will be the first member of the company's executive office ever to be based in Asia.
China has become the Peoria, Illinois-based company's No. 1 export market.
Earlier this week, Caterpillar reported an 11 percent rise in global dealer sales of its heavy machinery in the three months ended in May, driven by especially strong growth in the Asia-Pacific region.
The results broke a 19-month streak of declines for dealer sales at the world's largest maker of earth-moving equipment.
Sales in Asia-Pacific alone were 38 percent during the period, where the economies, particularly China and India, have recovered quickest from the worldwide recession.
The announcement by China's central bank, which strongly suggests it was ready to break the currency's 23-month-old dollar peg, was conditioned by an explicit warning ruling out a one-off revaluation or major yuan appreciation.