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Output value of the country's farm machinery industry totaled 150 billion yuan (about 20.7 billion U.S. dollars), up 18 percent year on year, said China Association of Agricultural Machinery Manufacturers Chairman Gao Yuanen.

Net profit for the industry hit 7 billion yuan in 2007, an increase of 38 percent year on year, he said.

China's huge farm machinery market attracted machinery giants from Italy, the Republic of Korea and the United States, among others.

With government subsidies for purchasing, the country's agricultural machinery industry has developed at an annual rate of30 percent between 2004 to 2006.

According to the Ministry of Agriculture, the amount of subsidies by the central government rose from 300 million yuan in 2005 to 600 million yuan in 2006. Funds arranged by localities reached 1.06 billion yuan.

A survey also revealed that only 35.9 percent of farm work, such as ploughing, sowing and harvesting, nationwide is done by machine at present.

Industry output is expected to hit 170 billion yuan this year, Gao forecast.