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After more than 10 years of rapid development, China's machinery industry has gradually entered the "Red Sea," with overcapacity and weak demand, once affecting the performance of related companies. In predicting the economic operation of the machinery industry in 2014, the China Machinery Industry Federation believes that the basic stabilization of the macroeconomic environment and the stable policy environment will be conducive to the development of the machinery industry.
The China Machinery Industry Federation issued a report card on the economic operation of the machinery industry in 2013 on the 17th. Last year, the industry’s total realized main business income was 20.4 trillion yuan, an increase of 13.8 percent over the previous year, and the growth rate was 4 percentage points higher than that of the previous year; the machinery industry’s added value was up 10.9 percent from the previous year, higher than the average national industrial growth rate over the same period. (9.7%) 1.2 percentage points, the momentum of recovery is stronger than the national industry.
“Last year, the whole industry achieved a slow recovery and moderate growth. The major economic indicators such as production and sales and benefits have all achieved modest growth.†Cai Weici, executive vice president of the China Federation of Machinery Industry, said that in 2013, the industry’s cumulative total profit was 1.41 trillion yuan. , an increase of 15.6% over the previous year. The total tax revenue for the year reached 781.7 billion yuan, an increase of 19.5% over the previous year.
According to reports, the production of most products in the machinery industry increased last year, and the profit growth of the entire industry rebounded. However, it is worth noting that in 2013, the company’s loss was 10.9%, up by 0.47 percentage points over the previous year; loss-making enterprises’ loss was up by 15.2%.
Cai Weici pointed out that this shows that the structural adjustment of the machinery industry has been stepped up. On the one hand, the product structure has been accelerated in transformation and upgrading. On the other hand, the industry differentiation has further increased, and the survival of the fittest has gradually been achieved by relying on market competition.
Taken together, the machinery industry will face four major challenges this year: First, export growth will be very difficult. It is understood that although the trade surplus of the machinery industry in 2013 reached a record high of 73.6 billion U.S. dollars. However, the rapid growth in exports that has lasted for many years has triggered increasingly severe trade frictions. In addition, the exchange rate of the RMB has continued to climb. As a result, the difficulty of further expanding exports of China's machinery products has increased.
The second is the increase in financial pressure. In 2013, the phenomenon that mechanical enterprises were in arrears did not significantly improve, and the company’s liquidity was used in large quantities; at the same time, the withdrawal of the US quantitative easing policy led to the tightening of international liquidity funds, which will be transmitted to domestic markets through channels such as trade and capital flows. Increase pressure on liquidity tightening of domestic companies.
Third, the rapid rise in the cost of human and environmental resources has squeezed profit margins. In 2013, although the prices of upstream products such as raw materials and fuels were still relatively low, the upward pressure on the costs of the machinery industry continued to increase, and the main activities were difficult to achieve. The profit rate of main activities last year was only 6.57%, down by 0.41 percentage point from 2012. With the rapid rise in the cost of human and environmental resources, the profits of domestic companies will be further squeezed.
Fourth, the demand is weak and prices are still low. In 2013, the accumulative orders of the key enterprises of the machinery industry were based on the low base of the previous year, and the year-on-year growth rate picked up slightly from month to month. The trend improved compared with the previous year. The cumulative order volume from January to December increased by 10.2% over the previous year. But overall, order growth is still weak. Under the pressure of insufficient orders and oversupply, product prices continued to slump. In 2013, the price index of the machinery industry continued the downward trend of the previous year. By the end of the year, the price index for the month had been below 100% for 25 consecutive months.
“Overall, the mechanical industry must really make a long-term effort to enter a sound development track.†Cai Weici pointed out that enterprises still have to work hard to accelerate their transformation and upgrading, increase the added value of their products, actively go abroad and participate in global competition. In 2014, the external environment of the machinery industry was unlikely to improve significantly, but overall it is expected to remain basically stable.
The China Machinery Industry Federation issued a report card on the economic operation of the machinery industry in 2013 on the 17th. Last year, the industry’s total realized main business income was 20.4 trillion yuan, an increase of 13.8 percent over the previous year, and the growth rate was 4 percentage points higher than that of the previous year; the machinery industry’s added value was up 10.9 percent from the previous year, higher than the average national industrial growth rate over the same period. (9.7%) 1.2 percentage points, the momentum of recovery is stronger than the national industry.
“Last year, the whole industry achieved a slow recovery and moderate growth. The major economic indicators such as production and sales and benefits have all achieved modest growth.†Cai Weici, executive vice president of the China Federation of Machinery Industry, said that in 2013, the industry’s cumulative total profit was 1.41 trillion yuan. , an increase of 15.6% over the previous year. The total tax revenue for the year reached 781.7 billion yuan, an increase of 19.5% over the previous year.
According to reports, the production of most products in the machinery industry increased last year, and the profit growth of the entire industry rebounded. However, it is worth noting that in 2013, the company’s loss was 10.9%, up by 0.47 percentage points over the previous year; loss-making enterprises’ loss was up by 15.2%.
Cai Weici pointed out that this shows that the structural adjustment of the machinery industry has been stepped up. On the one hand, the product structure has been accelerated in transformation and upgrading. On the other hand, the industry differentiation has further increased, and the survival of the fittest has gradually been achieved by relying on market competition.
Taken together, the machinery industry will face four major challenges this year: First, export growth will be very difficult. It is understood that although the trade surplus of the machinery industry in 2013 reached a record high of 73.6 billion U.S. dollars. However, the rapid growth in exports that has lasted for many years has triggered increasingly severe trade frictions. In addition, the exchange rate of the RMB has continued to climb. As a result, the difficulty of further expanding exports of China's machinery products has increased.
The second is the increase in financial pressure. In 2013, the phenomenon that mechanical enterprises were in arrears did not significantly improve, and the company’s liquidity was used in large quantities; at the same time, the withdrawal of the US quantitative easing policy led to the tightening of international liquidity funds, which will be transmitted to domestic markets through channels such as trade and capital flows. Increase pressure on liquidity tightening of domestic companies.
Third, the rapid rise in the cost of human and environmental resources has squeezed profit margins. In 2013, although the prices of upstream products such as raw materials and fuels were still relatively low, the upward pressure on the costs of the machinery industry continued to increase, and the main activities were difficult to achieve. The profit rate of main activities last year was only 6.57%, down by 0.41 percentage point from 2012. With the rapid rise in the cost of human and environmental resources, the profits of domestic companies will be further squeezed.
Fourth, the demand is weak and prices are still low. In 2013, the accumulative orders of the key enterprises of the machinery industry were based on the low base of the previous year, and the year-on-year growth rate picked up slightly from month to month. The trend improved compared with the previous year. The cumulative order volume from January to December increased by 10.2% over the previous year. But overall, order growth is still weak. Under the pressure of insufficient orders and oversupply, product prices continued to slump. In 2013, the price index of the machinery industry continued the downward trend of the previous year. By the end of the year, the price index for the month had been below 100% for 25 consecutive months.
“Overall, the mechanical industry must really make a long-term effort to enter a sound development track.†Cai Weici pointed out that enterprises still have to work hard to accelerate their transformation and upgrading, increase the added value of their products, actively go abroad and participate in global competition. In 2014, the external environment of the machinery industry was unlikely to improve significantly, but overall it is expected to remain basically stable.
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