Manufacturing Bubble: The Real Economy of China's Economy is More Huge and Lasting

Forbes website in the United States published a report on July 23 entitled: The end of China's manufacturing industry and the rebirth of US industry.

This article believes that Chinese people are currently extremely concerned about China's real estate and infrastructure bubbles. However, this is a short-term challenge that China can solve through spending. The real threat to the Chinese economy is even greater and lasting: the manufacturing bubble.

The author of the article, Vivek Waldwa, believes that by providing subsidies, cheap labor, easing policies, and manipulating the renminbi, China has successfully attracted many US companies to relocate their factories to China. However, due to rising labor costs, concerns about government support for intellectual property theft and production time lag, Dow Chemical, Caterpillar, Volkswagen and Ford have decided to relocate some of their production units to the United States.

In addition, a series of rapid development and integration of technologies will also break the status quo, such as robotics, artificial intelligence (AI), 3D printing and nanotechnology. These technologies have been slow to develop before, but now they are developing rapidly. In the next decade, these technologies will usher in further development. By then, the materials and production technologies used in the manufacturing industry will be completely different from the current production processes based on production lines in China and the United States.

Vivek Wardwa firmly believes that even if Chinese factories are equipped with robots and 3D printers with artificial intelligence, they can realize automated production. It will not be wise to ship raw materials to China in a week, and then ship them back to the United States after assembling finished products in China. Act of. Therefore, there is no doubt that manufacturing industry will return to the United States. It is not this decade or the next decade. However, similar jobs lost by the United States will not return and these positions will no longer exist in the future.

Although we do not agree with the assertion that only part of US companies will relocate the production sector, we should assert that the change in manufacturing patterns caused by major technological advances is indeed worthy of caution.

The slow transition may not have a consensus in the manufacturing industry this year. That is: The era of high dividends in China's economy has already begun. In 2012, the focus of China's economic transformation was the transformation of the manufacturing industry.

As the machine tool industry's machine tool, the machine tool industry's urgency for transformation and upgrading is even more obvious. The current situation is that although China has the largest number of machine tool manufacturers in the world, it lacks the famous multinational machine tool group and the world-class “fine, special, and special” small giants. For a long time, the high-grade bed required for China's economic construction and key projects mainly relies on imports. The domestic market share of domestically-made mid-range CNC systems is only 5%, and 95% of the numerical control systems required for high-grade beds come from overseas. The domestic market share of functional components is only It is 30%.

Some analysts believe that the proportion of high-, medium-, and low-end machine tool consumption in China's CNC machine tool market has the following characteristics: consumption is about 5:5:4.5, and consumption is about 15:7:15. Therefore, domestic demand for high-end and mid-range machine tools exceeds that of low-end machine tools both in terms of consumption and consumption.

Correspondingly, the pace of adjustment of domestic machine tool products is still not fast enough and timely. The product composition of domestic machine tools is mostly dominated by low-grade products. The medium and low-grade machine tools account for more than half of the output of China's machine tools.

The high import value of China's machine tool products, on the one hand, is due to the accelerated transformation and upgrading of the national economic structure, and the rapid increase in the demand for machine tool products in the domestic market; on the other hand, technological innovation and product structure adjustment in the machine tool industry cannot To keep up with the pace of market demand upgrading, the market competitiveness of domestic high-end machine tool products needs to be improved.

Chen Guilin, chief technologist of Xi'an Aeronautical Power Company once pointed out that the current machine tool design and innovation ability can not meet the needs of aviation manufacturing industry, making users have to seek foreign manufacturers, such as the overall blade processing, blade processing, professional broach grinding, compounding Processing equipment and special processing equipment. Domestic machine tools also do not have a mature and reliable CNC system. The domestic CNC system only maintains a corresponding market share in general electric processing equipment. Therefore, the transformation and upgrading of the machine tool industry is imminent.

Chen Huiren, Chairman of the China Machine Tool Industry Association and Chairman of Dalian Machine Tool Group, said that “transition and upgrading” is an inevitable choice for China's machine tool companies to become bigger and stronger. He believes that it is not enough to satisfy the transformation and upgrading only if it can be done. It is necessary to achieve the upgrading and leapfrogging from “can do” to “do a good job”; it is not enough to only make certain products, and it is necessary to provide users with complete solutions. Capacity; only technical means is not enough, and the overall quality of the enterprise needs to be fully upgraded; only the adjustment of products and markets is not enough, and the adjustment of the internal specialization structure of the industry is required; it is not enough to consider only the technical and economic elements, and it needs the enterprise. Institutional and cultural innovations and upgrades.

Especially now, China's manufacturing industry has a complex external ecological environment: the fiercely competitive first-line market; the huge second-tier and third-tier markets; the rising labor costs; the lack of financing channels, the flow of operational talent to the executive authorities, foreign multinational corporations, and monopolistic industries. Market credit is low and transaction costs are high. In such an external environment, it is not easy for companies to survive. Especially in the machine tool industry, talent and technology need long-term accumulation. Now is an era of speed. If companies lack acceleration, they may only become followers.

However, the characteristics of the industry itself also require companies to be “quiet” and distracted. Regardless of the international market, in China's huge second- and third-tier markets, it does not mean that companies can rely on quality, innovation ability, brand competitiveness, but only need low-cost impact on the market; do not consider brand strategy, development strategy, impetuous, blindly The psychology of seeking is not an entrepreneur with ambition and ideals. After all, there is no steady and long-lasting development strategy that cannot be achieved by China.

Lai Weimin, an economist with two legs walking, believes that in the era of rampant mountain spirit, China's manufacturing in the rapids must be well-prepared. The so-called two legs walk, he agreed that Chinese companies go first to go internationalization, and then go back to localization.

Why Japan, South Korea, and Taiwan in China have a large number of internationally-known manufacturing brands? The reason is that they do not have to digest their products in such a large domestic market. They must first go out, and they must take the initiative to dance with international brands.

Lai Weimin believes that Chinese companies do not have such a compelling environment because Chinese manufacturers have exported large quantities of high-quality products by relying on large and inexpensive labor laborers. At the same time, they have dumped a large number of cottage products with their huge domestic consumer markets. However, in the long run, China's manufacturing industry is suicidal.

He believes that going out first, and then coming back, China's manufacturing industry upgrading China's creation, establishing an international brand, fostering internationally recognized first-rate brands, and gaining recognition in the domestic market is a breeze.

In fact, with regard to machine tool companies, China's machine tool companies already have a number of companies that have gone out, such as Shenyang Machine Tools, Qinchuan Machine Tools, Shanghai Machine Tools, Spark Machine Tools, etc., but going out does not mean that they have obtained world-class manufacturing standards or Standards, how to operate, how to graft is the focus of consideration.

However, it is undeniable that these industry leaders are unwilling to stay in the low-end market and are unwilling to bow to the bottom of the food chain. "Immediately take it on the list." If you want to flow better in the river, you must first flow better in the sea. If you want to lead the Chinese market, you must target the world market. In this sense, the reporter agrees that only by allowing Chinese brands to go out and dance with wolves can they truly develop a strong and competitive perspective.