Machine tools are hailed as the “mother of industry and a national treasure.” As the grand China International Machine Tool Fair (CIMT) kicks off, the bustling event sparks a strong desire for the resurgence of Chinese machine tools within us.
Since 2020, the Chinese machine tool industry has been leading the global recovery, with a surge in orders and a scenario where “one machine is hard to seek.” This recovery is not only due to the market’s rebound but also a result of the industry’s continuous self-innovation and improvement in adversity. Facing challenges, the industry has shown tremendous vitality and development potential. So, how can Chinese machine tools achieve a rebirth amidst these challenges and stand at the forefront of the global machine tool industry again?
I. Research and Innovation Capability
With machine tool companies continuously increasing their R&D investments, especially in the fields of numerical control systems, servo technology, and intelligent manufacturing, their independent innovation capabilities have been significantly enhanced. At the same time, through close cooperation with research institutions, companies can not only quickly obtain the latest technological achievements but also accelerate the transformation and application of university research. In addition, some companies are actively developing their own brands and launching high-end products with independent intellectual property rights, thereby enhancing their competitiveness in the market. The promotion of intelligent manufacturing, including the application of robot automation, the Internet of Things, and big data analysis technologies, has greatly improved production efficiency and product quality.
In terms of products, companies have not only met the needs of traditional markets but have also gradually expanded into high-end fields such as aerospace, automotive manufacturing, and medical devices, developing more high-value-added products. At the same time, companies are also actively participating in international technical exchanges and cooperation, introducing advanced foreign technologies while exporting their own independent research and development technologies, thereby enhancing their international competitiveness.
II. Talent Reserve
Facing engineering and manufacturing talents, the national level has introduced relevant policies, such as the “Mechanical Industry Stable Growth Work Plan (2023-2024)” which proposes to strengthen talent training and introduction and improve talent efficiency, while also strengthening industry-university-research cooperation to promote the transformation of university research results to enterprises. At the corporate level, companies are also actively exploring, such as Qinchuan Group, which has built a platform for industry-university-research cooperation, organized specialized training and project cooperation, and established an effective incentive mechanism to cultivate and retain high-end talents.
Demographic Dividend
Compared with Western developed countries, we are latecomers. The Chinese machine tool industry has long had a significant gap in product technology, quality, and enterprise efficiency. China’s machine tool industry gains a primary edge with its affordable prices and services, largely backed by its lower labor costs.
For a considerable period in the past, the number of working-age (15-59 years old) population in China has been increasing, providing a large amount of relatively cheap labor resources for the continuous and rapid development of China’s economy, and the machine tool industry is no exception.
In the late 1990s, the labor productivity per person of state-owned enterprises in China’s machine tool industry was roughly equivalent to 1/35 to 1/30 of the same industry in Japan during the same period, and the labor cost per person of Chinese enterprises was roughly equivalent to 1/30 to 1/25 of Japanese enterprises. That is to say, the cost paid by Japanese companies for one employee was roughly equivalent to the total cost paid by Chinese companies for 25-30 employees, and the gap was very large. The above comparison shows that it is precisely because Chinese companies have outstanding labor cost advantages that they have largely balanced the disadvantages of low labor productivity levels, enabling Chinese companies to barely support themselves in competition at that time.
Since this century, the above situation has begun to change significantly. Through a series of comprehensive measures such as market-oriented reforms, system and mechanism transformation, internal management upgrades, and technical transformations, the labor productivity per person of Chinese companies has increased rapidly, and the rate of increase is significantly higher than the rate of increase in labor costs, making the labor cost advantage of Chinese companies begin to fully emerge.The demographic dividend underpins the machine tool industry’s sustained rapid growth at the century’s start.
Based on the demographic dividend, it has also brought price advantages, allowing for flexible pricing policies.
In addition to the demographic dividend, there is also the dividend of opening up.
After China joined the WTO, the opening up of the machine tool industry entered a new stage (2002 to the present). During this stage, in addition to developed countries’ machine tool manufacturing companies investing and setting up factories in China, another important feature is that Chinese companies “go global.” Many machine tool companies have taken the initiative to go abroad and implement technical mergers and acquisitions in developed countries.
According to incomplete statistics, there have been 18 machine tool companies implementing 25 overseas merger and acquisition projects, including representative projects such as:
Dalian Machine Tool Group’s acquisition of the production system and crankshaft project of the American Ingersoll Company, Shenyang Machine Tool Group’s acquisition of the German Schiess Company project, Beijing First Machine Tool Factory’s acquisition of the German Waldrich-Coburg project, and so on. Overseas mergers and acquisitions have further strengthened the technological integration between the machine tool industry and developed countries, cultivated and trained the international operation capabilities of Chinese companies, and formed a new pattern of the global machine tool industry where “you have me, I have you.” In recent years, a number of machine tool companies have also directly introduced a large number of technical experts from abroad, and a few companies have even set up research and development centers abroad, thus raising the introduction and cooperation of technology to a new level.
Not only technology and market, Chinese machine tools also have good after-sales service, which brings a good reputation.
Companies
Chinese machine tool companies adhere to the service concept of “customer first,” which determines the central idea when providing services. This concept encourages companies to commit to providing customers with fast, high-quality, and efficient services. Under the guidance of this service concept, companies implement a one-stop service model, covering various aspects such as maintenance services, on-site services, and value-added services, in order to meet the comprehensive needs of customers.Our professional technical service team, staffed with experienced experts, provides customers with timely hotline support around the clock.
Furthermore, Chinese machine tool companies emphasize “full life cycle” service, which means that the service is not only limited to the sales stage but extends from the product delivery to the entire usage period until the equipment is scrapped, ensuring that customers can get the necessary services and support at every stage. This comprehensive service commitment also includes a rapid response to customer needs and problems, and companies are committed to providing effective solutions in the first place.
To ensure that customers can make full use of the purchased machine tools, companies also provide technical training and operation guidance, which not only helps customers to use the machine tools more proficiently but also effectively improves production efficiency. In addition, companies have a complete spare parts supply chain to ensure the timely supply of various accessories required by the machine tools, minimizing the downtime caused by equipment failures for customers.
National level
At the national level, policy support also provides a strong guarantee for machine tool companies to improve service quality. Policy documents such as the “Mechanical Industry Stable Growth Work Plan (2023-2024)” clearly mention that by strengthening systematic thinking and problem orientation, adopting a multi-faceted and industry-specific approach, optimizing supply, boosting demand, and stabilizing expectations, machine tool companies are encouraged to further improve service levels and enhance competitiveness. These policy measures provide a solid backing for the improvement of enterprise service levels and also help promote the healthy development of the entire industry.
Brand Awareness
With the improvement of domestic machine tool quality, more and more international customers are beginning to recognize Chinese brands, especially in the Southeast Asian and African markets.
Although the Chinese machine tool industry started relatively late, it has developed rapidly and has occupied a dominant position in the mid-to-low-end machine tool market through continuous technological innovation and improvement. We should look to the future, continue to increase investment in high-end numerical control machine tools, further narrow the gap with foreign cash technology, and then achieve domestic replacement, and then seize the commanding heights of the industry, relying on technological improvements and rebirth from the ashes.
