"The market value of some Western peers have evaporated more than 90 percent compared with their peaks and are only traded at a P/E ratio of 3, which I think is a perfect time for acquisitions," Xiang said.

He suggested that government should work out a package of supportive policies to assist Chinese firms making overseas acquisitions, such as extending credit support.

Xiang said "several" foreign companies have approached Sany for possible acquisition deals but he declined to reveal their names.

Sany "has the financial resources and international operations expertise to acquire foreign rivals", Xiang said.

"But we will move very cautiously in this regard," Xiang said.

"The cost of buying the company is much lower than integrating them and it could lead to disasters if mismanaged," he said.

"Language barrier, cultural differences and management style are all elements that should be fully considered before taking a decision on such deals," Xiang said.

The Hunan-based company, which has recently announced a 100 million Euro investment in Germany to build R&D and manufacturing facilities, is more interested in setting up its own plants overseas than the outright acquisition of foreign players, Xiang said.

"We can manage our risks better by setting up the plants ourselves as we can control the pace and process of our investment," he said.

If the economic downturn worsens, "we could downsize our factory or our investment more easily than if we had bought a foreign company," Xiang said.

The Shanghai-listed company, Xiang said, intends to recruit 1,000 graduates this year and has no plan to slash jobs and cut salaries.

"We have confidence in our company and Chinese economy, so we just want to increase our human resources reserves," Xiang said, adding the company will assign the new recruits to strengthen its R&D capacity.

Sany announced earlier this year that its chairman will only receive 1 yuan annual pay this year while its board members will cut salaries by as much as 90 percent, and senior management by 50 percent, to cope with the economic downturn.

(China Daily March 10, 2009)