Caterpillar Inc. announced Tuesday that it will move its Asia Pacific operations headquarters from Tokyo to Beijing. Vice president for the firm’s Asia Pacific division Rich Lavin, who has just relocated from Japan to Beijing, said the move to China was a clear indication of China’s strategic importance to Caterpillar.

“Operational and sales success in China is a critical success factor for the company’s long-term growth and profitability,” he added.

As part of Caterpillar’s Vision 2020 outlined last year, China has been listed as one of seven critical success factors needed for Caterpillar to achieve its new enterprise strategy and goals.

Lavin said global sales and revenue in 2006 was expected to hit 40 billion U.S. dollars, including one billion dollars in sales of equipment, engines and parts in the Chinese market, this year.

“We believe the share of the Chinese market will rise rapidly in coming years,” said Lavin. Caterpillar would expand its manufacturing base and rapidly deploy its global business model to provide support to customers in this critical market as well as the Asia Pacific market.

It now has 13 China-based facilities — both joint venture and wholly owned businesses — which employ more than 5,000 people.

In contrast to their peers in the US auto industry, Caterpillar has weathered all the excuses used for failure — increased profits 40% while revenues increased 20% — and their labor force has increased 23% in the last two years. Cat shares have tripled in value in the last five years while the S&P declined 6.3%.