Chinas machinery manufacturing is nearly 30 years behind Europe and America

Though corporate brands such as haier, TCL has been completely localization, but to buy air conditioning, shoppers will tell you the compressor from Japan, to buy a refrigerator, shoppers will tell you the compressor is from Japan. Industry insiders believe that China's machinery manufacturing is nearly 30 years behind Europe and America.
Joint venture sorrow

In April 2006, xugong group co., LTD., which is the industry of engineering machinery in China, was basically sealed with Carlyle's merger plan. Carlyle Asia bought 85 per cent of xugong engineering machinery group, a subsidiary of xugong group, for $375m. Although June due to the intervention of the sany holding process of twists and turns, but it put an end to the our country many economists fear "caterpillar winner-take-all mechanical engineering industry in China" plan temporarily come to an end.

In March 2005, the world's largest equipment manufacturers - the United States caterpillar to lower the price of the "surprise" acquired a 40% stake in shandong heavy industry, since in the engineering machinery, tougher than carter has made the acquisition of a large, purpose is "eating into engineering machinery in our country. The xugong group, which has been stable in the engineering machinery industry for many years, is certainly one of its stated goals.

If the Carlyle deal succeeds, it would be the equivalent of a blow to caterpillar. But for Carlyle, the ultimate aim is to sell xugong at a better price, so the development of xugong will remain an unknown.

Since the 1990 s, large multinational companies to tap into the domestic machinery industry market, mainly in the automotive, electrical appliances, cultural and office equipment, instruments and meters, general machinery and engineering machinery and other fields, this a few industry accounted for about 80% of the foreign direct investment amount of mechanical industry.

Association of machinery industry Yu Zhen such statements of foreign investment changes: "the basic premise is in investment activities in China must maintain its control, particularly notable is particularly keen on the current multinational enterprise m&a in our country the advantage of high growth industry enterprises." Now we can see that in pump industry of nozzle, the German Bosch company purchase the market leaders in nozzle pump industry in China - jiangsu weifu co., LTD., almost all the nozzle of the pump industry in our country is multinational company merger and acquisition, holding, after years of building technology center is revoked, merge; In bearing industry, the national bearing industry's first listed company four years ago - northwest bearing co., LTD., has been with the world's third largest Germany FAG bearing company joint venture, the joint venture company after two years into a Germany solely invested enterprise. ...

Technology black hole
China's machinery manufacturing industry has many problems besides its "foreign enemy".
Once upon a time, corporate import machinery became a publicity stunt. A food company in guangdong boasts of itself: "the company has brought in many Japanese and Taiwan automatic production equipment, exquisite workmanship and excellent product quality, which has won the favor of consumers."

Examples of this are everywhere. The Chinese have also embraced the fact that only foreign production lines and production equipment are reliable and guarantee products.

After the rise of the slogan "rejuvenating the nation" industry, some famous brands have been gradually forged in China, such as haier, TCL, etc. Though the brand has been completely "localization", but when it comes to the core of the product components, but mostly from abroad, buy air conditioning, shoppers will tell you the compressor from Japan, to buy a refrigerator, shoppers will tell you the compressor is from Japan.

Industry insiders believe that there is a huge technology "black hole" in China's machinery industry. The most outstanding performance is the high degree of dependence of foreign technology. In recent years, China has introduced more than 60 percent of the trillions of yuan of equipment invested in fixed assets annually. Even as the window's national high-tech industrial development zone, 57% of the technology comes from abroad.

Engaged in metallurgy mechanical design engineer Liu Yanren told "well-off" : "in metallurgical machinery, plate and strip production line of the our country in recent years, three or four of article 10, lines more, total is staggering, but all these devices and systems are from Germany, Japan and Italy." For example, he saw in a large steel plant in hebei province that the cold rolling mill came from the German company ximark, and that the equipment came from the Italian company danieli.

According to the federation of mechanical industry, the contribution rate of new products in industrialized countries is 52 percent, and China is only 5.9 percent. There are few products with the core technology of independent intellectual property rights, and more clone products. In addition to the erosion of independent innovation, such results are vulnerable to infringement charges. Even with the advent of self-developed technology, it is easy to be accused of plagiarism. China's recently developed "CM1 dolphin" maglev train, which has not yet been tested, has been accused by some German media and companies of "copying German magnetic levitation technology".

Zhong jun, director of the center for economic observation and research at the Beijing army, said that the backbone of all industrial manufacturing equipment was foreign products, exposing the weakness of China's industrialization. The machinery manufacturing industry is a country's spine and spine, and China's future if it doesn't harden and straighten up, the whole economy and defense are weak.

30 years behind
There has been a discussion online of "how many years behind China's machinery industry lags behind Europe and the us", and many believe that "at least 30 years is a difference". This gap is especially true in engines.
The engine as a mechanical "heart", how to evaluate its importance in machinery is not excessive, especially for the automobile industry that China is advocating.

China's auto industry has been developing for years, failing to use the "heart" designed by itself, which has left many people in the auto industry to be injured. But now several car companies are starting to focus on designing their own engines. Chery is one of them, and its successful ACTECO engine has made Chinese cars start making technology money. Not long ago, the chery ACTECO engine won the 2005 China creation award.

But focus on engine industry Liu Yanren engineers to "well-off" said: "although the engine rating the prize, but the message also indicate that the production ACTECO engine chery engine plant using the latest technology, has imported from Germany and Italy, on behalf of the nation's highest level of industrial product, USES the space truss structure, closed the whole air conditioning, so as to guarantee the high precision equipment under the condition of stable, clean production." Mr Liu said he was frustrated by the news.

The power of large engineering machinery - diesel engines are not optimistic. The ship dealer Lao zhu said of the hull that he had been distributing for many years: "the first thing that comes to mind is that domestic diesel engines think of it as a dull, unsophisticated, drip-drip. Two more ships later, its host is weichai WD615 series, and it feels good.
Industry insider zheng luo (not his real name) told off that WD615 was the driving force behind the introduction of the steyer products in the late 1970s. When the ministry of mechanical industry introduced the products from Austria, the engine was handed over to the shandong weifang engine plant. After nearly 20 years of digestion and absorption, the WD615 series production capacity reached 200,000. The product, which was introduced from Austria, was not the latest product in Austria, and the product is still a mainstream product in China, says Mr Zheng.

The market did not buy technology
An increasing number of insiders admit that China's car companies have not formed core technologies after 20 years of joint ventures. Other industries are doing the same. Statistics show that China is introducing foreign complete equipment and production line, patent and proprietary technology are not introduced. In 2004, China's total technology import contracts totaled us $13.86 billion, with a total of 52.3 percent of equipment and production lines, accounting for only 29.8 percent of the total technology.

Why is the market not getting the necessary technology? , chief economist at the development of Chinese auto industry consulting company jia xinguang has, for instance, at the beginning of the Beijing jeep co., LTD., joint venture, the Chinese side to open farewell party a will return American engineers, farewell meeting, the americans put forward such a question: "why you want to learn technology, not to say that no one came to ask me?" Jia xinguang believes that not to bring the model is equal to the transfer of technology, some key places still need to learn, and need some people to dial. But quite a few companies focus on the form of joint ventures, introductions, etc.

Imitation and indigestible absorption are also helping the mechanical industry go astray. The ratio of the total amount of technology introduced by China's large and medium-sized state-owned industrial enterprises and the cost of absorbing and absorbing them is 1:0.06. And the proportion of south Korean and Japanese companies importing technology and digestible has reached 1:5 to 1:8.

In addition to indigestion, technical barriers are becoming a huge barrier to China's introduction. Intellectual property has become a weapon in the gap between developed countries, including the United States, and developing countries. More than one western media has suggested that the west can effectively cope with China's rise only if it continues to lead in innovation. "The United States and Europe are careful to maintain a decades-long gap with Chinese technology," said song yu, an engineer at a beijing-based research institute.

The result is a list of embargoes, especially high-precision working machines that have been jointly banned by United States and other developed countries for selling to China. "We have to have NATO approval to buy a large gear grinder in Germany, to assure them for civilian use," dundu told the well-off.

Even within the joint venture, multinationals are struggling to keep up the gap, in the form of a blockage of core technology. After a few months of working in a joint venture, Mr Liu has a deep sense of it: "it is not easy for a technician to go to a factory." The reason is that some core components are monopolized by foreign countries, and Chinese technicians are not allowed to see them.

Through a variety of controls to ensure that the national power lead, in addition to "contain" China's political attempt, it also conforms to the requirement of western companies, because only keep leading technology, they can earn more profits from China.

What is the support of the state?
It is widely believed in the industry that the formation and attention of technology black holes are closely related. "The country has neglected the development machinery sector over the past two decades," sighs one insider. "it can be proven in policy, capital and so on. From the mechanical industry department to the mechanical and electrical department to the mechanical department, the first level of health, the first level is ignored.

The "constant battle" of the machinery industry determines the obstacles it faces in development. "Mechanical equipment works, requires huge investment and requires great patience to wait for the fruits of flowering," zheng said to "a well-off life".

Because this process is time-consuming, but also faced with research and development, feeding, production, marketing, brain drain, foreign enterprise competition, low end the market hard, such as multiple pressure, therefore many experts think should give policy tilt, should be given preferential research institutions and companies of a certain industry, given the opportunity of free development.

Zhejiang wanxiang group chairman, Mr Lu had told media that China should make machinery manufacturing as one of the special industry to support the development, to give preferential treatment, such as can reasonably reduce VAT and lower income-tax rates. If such a micro-profit situation persists, China's machinery manufacturing industry is indeed very dangerous. "In our group, for example, the current situation is to support manufacturing by making money from other industries."

Property right incentive system is one aspect that many experts emphasize. "In the beginning, a large engine plant was a large number of research and development, either by the state, or by other enterprises," zheng said. Some scholars say, "the property rights incentives of state-owned enterprises to innovative people are basically not implemented." On the one hand, the intellectual property of innovation achievements has not been effectively protected; On the other hand, innovators' contributions are not recognized by property rights.

Recently, the state council issued a policy to accelerate the revitalization of the equipment manufacturing industry, and made clear the key development of 16 major technical equipment. Quite a few experts are looking forward to the prospect of Chinese machinery.

Many experts also warn that it is a good time for the machinery industry to develop, and the time has come to die.
According to Jane, the machinery industry has entered a period of sustained and rapid growth since 2002. The accelerated development of China's heavy chemical industry is a phenomenon of a certain period. If we can't solve this mechanical problem well at this stage, it will be more difficult for the domestic equipment manufacturing industry to develop once the demand comes down. At the same time, foreign multinationals are trying to compete for control in China through the economic globalization and the opportunity of entering the world. If we slacken off a bit, the future of domestic enterprises can only be under the control of people.