Prospects for China's equipment manufacturing industry are not optimistic

Recently, the Operational Monitoring and Coordination Bureau of China's Ministry of Industry and Information Technology and the Institute of Industrial Economics of the Chinese Academy of Social Sciences jointly issued the "Report on the Operation of China's Industrial Economy in 2012". The "Report" shows that in 2012, China's economic operation showed a slowdown in industrial economic operation, a marked increase in the demand for domestic demand, a steady progress in the adjustment of industrial structure, an improvement in the operating conditions of enterprises, an improvement in the operation of the eastern region, and a strengthening of the role of the central and western regions. The effects of steady growth policies have gradually revealed six characteristics.

According to statistics from the National Bureau of Statistics, during the period from January to November 2012, the value-added of China's equipment manufacturing industry increased by 8.2% year-on-year, which was significantly lower than that of all industries above designated size, and the growth rate dropped by 7.2% compared with the same period of last year. Among them, the first, second and third quarters increased by 9.1%, 9.1%, and 7.6% year-on-year, respectively, and increased by 6.5% and 7.4% respectively in October and November. Due to the slowdown in the growth rate of investment in fixed assets and the continued decline in exports, the overall operation of China's equipment industry has not yet lifted downward pressure.

From the perspective of the Machinery Federation’s focus on linking enterprise orders, the cumulative number of newly signed orders for China's equipment manufacturing industry increased by only 6% year-on-year in 2011, while the cumulative growth in 2012 has shown a negative growth situation, including construction machinery, ships, machine tools, trucks, power generation equipment orders The decline is most obvious. According to statistics, from January to October 2012, China's equipment industry realized a profit of 905.3 billion yuan, a year-on-year increase of 2.1% (up from a 20.8% increase in 2011). The automobile industry grew by 8% year-on-year. Excluding auto industry profits, profits of other industries fell by a total of 1.4%. The main business income profit margin was 6.31%, down 0.4% year-on-year; the company suffered a loss of 14.7%, and loss-making enterprises suffered a loss of 7.75 billion. Yuan, a year-on-year increase of 71.7%.

According to expert analysis, 2013 is a crucial year for China to thoroughly implement the industrial transformation and upgrading plan and strategic emerging industry development plan. High-end equipment manufacturing industry will usher in an important period of development opportunities. At the same time, the acceleration of investments in infrastructure such as railways and water conservancy will stimulate the growth of construction machinery and other industries. There will be room for growth in UHV power transmission and transformation equipment in hydropower equipment and power transmission and transformation equipment in power generation equipment. However, on the whole, the improvement in demand is not yet obvious, and it is difficult to achieve a fundamental improvement in the export situation. At the same time, the overcapacity of low-end and middle-end products in China's equipment manufacturing industry and the weak capabilities of high-end product R&D and industrialization will lead to further intensification of industry homogenization competition; quantitative economic easing (QE) in Europe and the United States and other advanced economies will be implemented. The industrialization strategy will also form a certain pressure on the export of Chinese mechanical and electrical products. It is expected that the overall operation of China's equipment industry and the growth rate of added value will be better in 2012 than in 2012. However, opportunities and challenges of China's equipment manufacturing industry coexist and the outlook is still not optimistic.