ARC said China's control valve market was expected to reach 11% compound growth over the next five years. Worth $US212 million in 2003, the market could be worth more than $US350 million in 2008, according to ARC's Control Valve Outlook for China study.
"As new investments continue to pour into China's core process industry sectors, the market offers excellent growth potential for both the near and long-term," the consultant said.
"Local and global manufacturing companies are creating world-class, production facilities across all the vertical industries.
"These facilities provide cheap labour for export requirements and a local facility to take advantage of exploding local demand for a wide range of products, created by growing disposable incomes of China's large population. Both global and homegrown suppliers see tremendous opportunities in China, making the market intensely competitive."
As China continued to make progress towards becoming a global market economy and the country becomes synonymous with low-cost manufacturing, control valve suppliers around the world were increasing efforts to gain access to the country's huge potential, the ARC report said.
"Most control valve suppliers investing in China are thinking beyond the short-term opportunity of obtaining low-cost labour," it said.
"Despite concerns over such issues as intellectual property protection, fair business practices, and regulatory mechanisms, a number of suppliers are pushing ahead to set up technology transfer alliances, joint ventures and wholly owned subsidiaries in China."
Investment in a large number of new power plants, coupled with modernisation of older plants, was driving demand for control valves and other products. Demand for electric power continues to grow as the country's economy and manufacturing industries expand.
Based on its 2000-2012 strategy plan, the Chinese Government has approved 30 new electric power projects that will add 22 gigawatts to the country's generating capacity.
"China's electric power industry has a large number of thermal power plants, accounting for roughly three-quarters of the country's power capacity," ARC said.
"Many of the country's thermal power plants use outdated technology and require improvement."
