China's equipment industry has a long way to go

Power generation equipment, power transmission and transformation equipment, automobiles, motorcycles, large and medium-sized tractors, and internal-combustion engines... Nowadays, the output of these products has made China rank first in the world; the overall scale of the Chinese machinery industry has also surpassed that of the United States, Japan, and Germany. Ranked first in the world.

The Chinese equipment industry is showing itself to the world with ever-changing appearances, and the gap with similar companies in the world is continuously narrowing. China is becoming more and more true as a "world factory."

“The Chinese equipment industry has developed rapidly over the years, and the results are obvious to all. However, the current industry situation is a happy one.” said Cai Weici, executive vice president of the China Federation of Machinery Industry.

With the so-called “hi”, the industry has achieved sustained high-speed development, and its profit growth has been faster than the total industrial output value; the proportion of Chinese machinery products to meet the needs of the domestic market has continuously increased, reaching 85% in 2010; the production conditions in the industry have been greatly improved. A series of new developments have been made in the structural adjustment of the industry's product structure, capital structure, regional structure, and corporate organizational structure.

But what is more noteworthy is the "worry." Cai Weici said that China's equipment industry is weak in innovation and it is difficult to support the development of high-tech equipment. Take the machine tool industry as an example, although China has become the world's three largest machine tool consumption, import value and industrial output value, but due to weak innovation capabilities, high-end products still can not meet user demand, the import value in 2010 up to 157.2 Billion US dollars, an increase of 62% over the previous year, once again set a record high.

"Since 2008, the surplus in the export trade of the machinery industry has continuously narrowed, from US$47.6 billion in 2008 to only US$3.1 billion in 2010. In the first four months of this year, it has turned into a deficit of US$4.7 billion.” Cai Weici believes that although We do not have to pursue too many surpluses, but the surplus turns into a deficit, indicating that the competitiveness of our enterprises and products in the international market still needs improvement.

In terms of the size of the company, none of the top 100 machinery enterprises in China has entered the world's top 500 so far; China’s automobile production and sales volume has ranked first in the world for two consecutive years, but it is among the top 21 global automakers in 2010. Although there are four Chinese companies (Dongfeng, SAIC, FAW, and Changan), their rankings are still relatively low, and none of them have entered the top 10 global auto makers.

What makes us unable to understand is that in the right to speak in the high-end equipment market, in the contest of technological innovation capabilities, in the influence of industrial standards, in the field of “green” development concepts, in terms of international marketing experience, The modern enterprise management level reflects many key areas of the company's core competitiveness. The gap between China's equipment industry and advanced companies in the world is far greater than the gap in the scale of production and sales.

The serious lag in basic development has also constrained the development of high-end equipment in China. “Many of our companies are eager for quick success and instant benefits. They only care about the immediate future, they do not care about the long-term, they are keen on 'taking in' and 'reverse development', they are unwilling to work hard on the basic fields and core technologies, and can only watch foreigners rely on technological monopolies (such as Engine fuel injection system, excavator hydraulic system) to get huge profits." Cai Weici said.

In fact, some leading enterprises in the equipment industry are also clearly aware of these problems. “We invest 5% to 7% of sales revenue each year in research and development, and we have more than 5,000 R&D personnel. Now, our ability to innovate can be said to be leading in the construction machinery industry all over the world,” said Sany Heavy Industry President Xiang Wenbo.

From a big country of equipment to a country with strong equipment, China still has a long way to go, and there is still a long way to go for transformation and upgrading.

“In the future, we will not only attack the high-end, develop high-tech products, and pursue high-quality products; we must also lay a solid foundation and quickly resolve several basic bottlenecks in the development of high-end equipment such as processing machines, measurement and control systems, key components, and high-quality materials.” Cai Weici said.