China's Industrial Economy Increases and Declines

As China's manufacturing economy has undergone rapid growth and has experienced a declining trend, the machine tool industry has been affected.

Since the beginning of this year, the international economic environment has been complex and changeable, and our country’s economy has also witnessed some new changes. In general, the industrial economy has continued its slowing trend since the second half of last year and has shown clear adjustment characteristics. Affected by the tightening market environment, the downward pressure on economic operations has increased and the production and operation of enterprises have become more difficult. According to statistics from the National Bureau of Statistics, from January to July, the industrial added value of industries above designated size increased by 10.3% year-on-year, and the growth rate dropped by 4 percentage points year-on-year; of which, the added value of light and heavy industries increased by 10.8% and 9.9% respectively year-on-year, and the growth rate fell year-on-year respectively. 2.3 and 4.6 percentage points. Judging from the profit situation, from January to July, the national industrial enterprises above designated size achieved a 2.7% year-on-year decrease in profits, and the main operating profit margin decreased from 6.11% in the same period of last year to 5.36%.

At present, what kind of operating conditions the economy is in, how do we view the current economic situation and how it will move next? The Ministry of Industry and Information Technology, the Ministry of Industry and Information Technology, and the Institute of Industrial Economics of the Chinese Academy of Social Sciences, according to the data released by the National Bureau of Statistics and relevant departments, combine The implementation of the "Twelfth Five-Year Plan" industrial transformation and upgrading plan has carried out a careful analysis and study of the current industrial economy. Comprehensive analysis shows that the factors affecting the current slowdown in industrial growth and the decline in corporate profits are manifold. They include both the impact of the sluggish world economy and the persistently low external demand, as well as the lack of effective domestic demand and the impact of overcapacity in some industries. At the same time, economic operations may enter a new adjustment cycle, and all aspects of pressure are relatively large. At present, industrial growth has shown some signs of stabilization, but the foundation is still relatively fragile, and some uncertainties will bring new shocks. This cannot be taken lightly.

In the machine tool industry, there is news that: China's machine tool industry in January-October completed a total industrial output value of 576.67 billion yuan, an increase of 11.1%, the growth rate dropped significantly. According to the industry data provided by the National Bureau of Statistics, the growth rate of production and sales in the entire industry has declined significantly and the profit has grown negatively. The total industrial output value of the association’s key linking companies has experienced double-digit negative growth since the beginning of the year, and both orders and new orders for enterprises have dropped sharply. Inventory has increased significantly.

The data shows a grim situation

Compared with the growth rate of about 30% that has been maintained in 2011, the growth rate of 11.1% is indeed “a significant decline”. The Association’s previously announced growth rate of total industrial output value in the first half of this year was only 11.6%.

Unoptimistic data is also reflected in total profits. According to Wang Liming, from January to September, the entire industry realized profits of 28.35 billion yuan, a year-on-year decrease of 3.6%, and the profit rate of product sales revenue was 5.8%, a year-on-year decrease of 0.7 percentage points. Among them, the profits of the gold-cutting machine tool industry were even more severe, with a year-on-year decrease of 39.0%. The profit margin of product sales revenue was only 3.6%, a year-on-year decrease of 1.8 percentage points. According to statistics, from January to October, the gross industrial output value of the gold-cutting machine tool industry was 115.88 billion yuan, a year-on-year decrease of 2.2%, and the output decreased by 16.8% year-on-year.

Compared with the statistics of the National Bureau of Statistics on the 4785 enterprises above designated size, the statistical data of 217 key contact enterprises of the China Machine Tool Industry Association show a more severe situation and more prominent problems. These enterprises completed a total industrial output value of 79.98 billion yuan, a year-on-year decrease of 18.1%, of which the output value and output of the gold-cutting machine tool decreased by 19.1% and 29.7% year-on-year, respectively, and the gross output value of the two most serious rolling functional components and numerical control systems declined. 35.0% and 35.8%. The 217 key affiliates reduced their new orders and in-hand orders by 34.0% and 24.7% respectively in the same period of the previous year. Wang Liming emphasized that in the past ten months, the economic operation of China's machine tool industry was grim, and the industry was not optimistic for the whole year; the current market changed rapidly, the market demand for middle and low-end products generally shrank, and the demand for products and services from users increased rapidly. Will become the normal market for the future.

At the same time, the import volume of China's machine tool products was still at a high level from January to October, an increase of 2.1% year-on-year, of which imports of gold-cutting machine tools totaled US$9.36 billion, which represented a year-on-year increase of 8.1%, and the highest import volume of processing centers totaled 42,000 units. 4.74 billion yuan; while the export growth rate gradually declined, the highest export value is still cutting tools.

Wang Liming predicts in the report that it is expected that the growth rate of the growth rate of the gross industrial output value of the machine tool industry in the fourth quarter will stabilize, but the growth rate of the metal processing machine tool industry may continue to decline for a long time. He further pointed out: “According to the National Bureau of Nationalities According to statistical standards, the whole industry will show a growth rate of more than 10% throughout the year, among which the metal processing machine tool industry will experience slight positive growth, and according to the association’s key contact enterprise data, the growth rate of the metallurgical machine tool output value of the key contact enterprise should be -20% or less."

Ten years of rapid growth or the end of this period

Chen Huiren, deputy secretary-general of the China Machine Tool & Tooling Industry Association, also stated in the report entitled “Implementation of Strategic Transformation, Transformation and Upgrading, and Promotion of Sustainable Development of the Industry” on the same day: “The major economic indicators of China’s machine tool industry have been reduced, and new orders have been significantly reduced. The level of production and sales has dropped significantly, capital spending has risen sharply, manufacturing resources have been largely idle, and the contradiction between supply and demand has become increasingly prominent as the main feature of the current economic operation of the industry.” He believes that the inherent contradiction in the production capacity structure imbalance is even more pronounced. The qualitative competition is further aggravated, and China's machine tool industry is experiencing a relatively difficult transition period after experiencing high-speed growth for more than a decade.

Chen Huiren emphasized that: “Under the current situation, we must abandon the expectation of the government’s further launch of a powerful stimulus plan and give up the demand for a strong rebound in the low-end and mid-range markets because these are unrealistic and the industry needs a new one. The ideological emancipation and conceptual change of the revolution should consciously get rid of the path dependence on the mode of large-scale development and completely abandon the blind pursuit of rapid growth."

Indeed, the overall decline in major economic indicators and the overall downturn in the industry have also forced industry players to believe that the high-speed growth that has lasted for more than a decade will probably end completely this year.

Moreover, the macroeconomic environment in the short term is not optimistic. Yu Bin, Minister of Macroeconomic Research of the Development Research Center of the State Council pointed out in his report “China's Economic Outlook and Outlook 2013”: “From the perspective of the annual trend, the third quarter should be short-term. At the bottom, the fourth quarter is expected to rebound slightly, and the annual economic growth is expected to be slightly higher than 7.5%, which is due to the repeated deterioration of the debt crisis in Europe, the global economy continues to be sluggish, and the country actively controls the real estate market, resolves investment and financing platform risks and promotes structural adjustment. The speed of growth achieved in the background."

Yu Bin believes that in 2013, the world economy is still in an adjustment period after the financial crisis. Problems such as structural reforms and lack of demand growth are difficult to fundamentally change. The impact of the financial crisis shows a long-term trend, and developed economies may fall into a situation similar to Japan’s loss. "decade" situation. At the same time, developed countries implement the strategy of remanufacturing, the third industrial revolution represented by the Internet and new energy is emerging, and new trends in global industrial restructuring have emerged, namely, industrialization driven by intelligence and automation.