Caterpillar Inc said it remained upbeat about the outlook for China, even as concerns about the world's second-largest economy and other developing countries triggered another sharp selloff in global financial markets. The comments came as Caterpillar, the world's largest maker of earth-moving equipment, reported better-than-expected earnings, lifted in part by another strong quarter of construction equipment sales in China. Caterpillar, which also makes diesel engines, turbines and railroad locomotives, said it expected China to continue to be a source of strength in the coming year, despite a report last week showing a slowdown in the country's huge manufacturing sector. Caterpillar said its 2014 outlook assumed the Chinese economy would grow at a rate slightly above 7.5 percent in 2014, enough to support additional sales of its machinery as well as increased demand for industrial commodities. Last week's report out of China, which showed the country's manufacturing sector contracting for the first time in six months, has raised concerns that resource-rich emerging markets could be headed for trouble after benefiting from China's outsized growth over the past decade. The worries triggered a three-day selloff in stock indexes across the globe, and was especially pronounced in emerging markets. During a conference call with analysts on Monday, Doug Oberhelman, Caterpillar's chairman and chief executive officer, said the company was watching the Chinese situation "very, very closely" but, so far, was not worried. In an interview with Reuters, Brad Halverson, the chief finance officer, said: "At this point, we don't see a meltdown in China." Indeed, in a 34-page presentation Caterpillar released on Monday on its fourth-quarter results and its 2014 outlook, the company seemed far more concerned about continued weakness in key parts of the developed world, like Europe, than a slowdown in China or a slump in emerging markets. Peoria, Illinois-based Caterpillar predicted the overall world economy would grow about 3 percent in 2014. Emerging economies should grow by 5 percent, on average, more than twice as fast 2 percent for the developed world, it said. The big drag on the developed economies is Europe, where growth was being retarded by central bank inaction and austerity measures enacted by national governments in the wake of the recent recession. "The Eurozone economy is recovering," Caterpillar said on Monday, "but is far from healthy ... The unwillingness of the European Central Bank to take more aggressive actions risks leaving the economy struggling for years. Continued weak growth would make it difficult for businesses to maintain existing operations, let alone make new investments." (Reuters)