2017 China Machine Tool Market and Industry Development Situation Analysis

[Editor's note] This article is the report of Mao Jufeng, executive vice president of China Machine Tool Industry Association, held on January 7th at the 7th meeting of the 7th China Machine Tool Industry Association (this article is a brief version).
In 2016, China's machine tool market and industry can be described as “like a spring breeze”. Although it is still chilly, we feel more or less warm under the influence of macroeconomic recovery. Whether this warmth will continue in 2017, or whether it will experience “warm and cold”, it needs to be comprehensively analyzed according to the information of economy, industry and import and export. The following is mainly from the perspective of industrial strategy development. References from colleagues in the industry.

I. Industrial environment and operation status
China's macro-economy has some trend characteristics. For example, the economic growth rate slows down. The GDP growth rate has dropped from the high-speed growth of 14.2% in 2007 to the medium-speed growth of 6.7% in the first three quarters of 2016. The inflation pressure continues to increase, the first three of 2016. The quarterly money supply (M2) was 4.3 times that of the full year of 2006, reaching 152 trillion yuan; the marginal effect of investment on GDP is weakening. The ratio of money supply to GDP in 2006 was 1.6:1, before 2016. This ratio has surged to 2.9:1 in the third quarter, and so on.
As the potential risks of economic operation still exist, the marginal effect of investment on GDP is greatly weakened. In the future, the key tasks of supply-side structural reform will be further promoted, especially the “de-capacity” and “de-leverage” key tasks. It indicates that the future macro economy will be in a big cycle of tightening and adjustment. As the investment-driven machine tool industry, the operation and development of the industry will continue to face the downward pressure on the market.
In recent years, the growth rate of final consumption, capital formation and net exports has generally shown a downward trend. Among them, the composition of final consumption shows that urban residents and the government are the main consumers of consumption. In 2015, the proportion of the two reached 57.2% and 26.4% respectively. In terms of investment, special attention is needed. Although the growth rate of fixed asset investment in the whole society slowed down from January to November this year, the growth rate of investment in the two sub-sectors of manufacturing and equipment purchases still showed a significant downward trend, only 3.6 respectively. % and 1.4%. The above data indicates that the market procurement of machine tool products is still greatly weakened.
Recently, the industrial operation trend has also experienced three distinct stages of change. which is,
In the slow down phase (2014), the growth rate of industrial added value in major segments other than steel is higher than the industrial average (about 8.3-8.8%), showing a slow decline trend;
During the steep down phase (January to September 2015), the growth rate of industrial added value in the country fell to about 6.3%, and the growth rate of the general equipment manufacturing industry in the machine tool industry was about 10% from 2014. Fall below 4%;
In the stage of state differentiation (October 2015 to November 2016), although the growth rate of industrial added value in the country is stable at around 6.0%, the growth rate of major sub-sectors is clearly differentiated. With the support of the purchase tax preferential policy, the automobile has gone against the trend; steel and railways have continued to decline due to the investment cycle; general equipment, electrical machinery and metal products have rebounded slightly due to the growth of real estate; the early booming communication electronics manufacturing industry Production capacity tends to be saturated and shows a significant decline.
Based on the above situation, the current economic kinetic energy is fading, the new kinetic energy is not large and unstable, and the conversion of old and new kinetic energy has not been completed.
In the international market, according to the survey and forecast data of the Oxford Economic Research Institute, the international machine tool consumption and investment in major international industries will rebound moderately after reaching a recent low in 2016.
In the domestic market, the distribution of investment amount and growth rate can be seen. First, the traditional field is still the mainstay of investment. The investment in emerging manufacturing industry is still far from the traditional one. Second, the growth rate of traditional investment is common. Decline, even negative growth.
In 2016, the trend of consumption in the main segments of China's machine tool market is still down, but the decline has narrowed. The consumption of metal cutting machine tools is expected to decline slightly, about US$16.2 billion, down 5.3% year-on-year; the consumption of metal forming machine tools is expected to decline slightly, about US$10.1 billion, down 2.9% year-on-year; the consumption of tools is still expected to drop significantly. It was US$4.1 billion, down 8.9% year-on-year.
In terms of industrial operation, the prosperity index of China's machine tool industry in 2016 was 53.9%, up 19.4% from the same period of the previous year. It was above the line of honor and dryness, reflecting the recent upswing in the industry. From the perspective of the factors of prosperity, the company expects to rebound with the recovery of orders and operations, which is above the glory line, 56.5%, 60.6% and 55.1% respectively; but the environment and cost are still below the line of glory, respectively, 48% and 43%, and there is no good sign from the trend of the past three years. From the operational data, we can still feel the downward pressure. In 2016, the total output and export of the main segments of the machine tool industry will show a slight decline.

Second, the industry's positive and negative factors
In recent years, in order to “stabilize growth and adjust structure”, the state has implemented structural reforms on the supply side and promoted the transformation of the economy from factor-driven to innovation-driven, and has introduced a series of economic and industrial policies. These policies have a positive effect on the development of machine tools. In addition, according to the prediction of the Oxford Economic Research Institute, the international machine tool consumption market will be stable in 2016-2020, and it will show a moderate recovery, which will help us to go out and implement the strategy. There are also some positive factors in the domestic market. For example, China's industrialization process is accelerating, there is a huge upside for the integration of the two industries and industrial upgrading, and China's rigid demand after becoming the world's second largest economy.
While seeing many favorable factors for industrial development, we should also calmly pay attention to the outstanding problems in the current and future industrial development. For example, the market demand is sluggish. According to the analysis model of the supply and demand of machine tools, in the context of increasing the capacity of the user industry in the next few years, the total demand for machine tools and tools is likely to decline; the quality of operation is declining, the whole industry is the main The growth rate of revenue and total profit of the business has been on a downward trend. The growth rate of liabilities and accounts receivable has continued to increase significantly. The debt risk is high, and the operating leverage ratio has surged from 69.1% in 2011 to 130% in 2015. , profit margin and accounts receivable turnover rate decreased significantly; bottlenecks and development shortcomings, and so on.

Third, the response
At present, enterprises in the industry have taken the initiative and transformation and upgrading to varying degrees to cope with market changes. The association will take the initiative to unite industry demands, strengthen industry development strategy research, and serve the government and member companies. The association has carried out the research on industrial tax preferential policies and the planning of the establishment of industrial technology innovation centers.

Fourth, the outlook
Based on the above situation and analysis, in 2017, China's machine tool consumption market and industry operation trend is expected to remain in the downside range, and the decline will be narrowed, but there is the possibility of repeated challenges.

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