China's equipment industry is developing towards intelligence, and instruments and meters are expected to continue to grow

In 2016, there were both opportunities and challenges for the development of China's equipment industry. There were both positive factors such as the implementation of various new policies during the 13th Five Year Plan period and the continuous expansion of industrial development space, as well as unfavorable factors such as sustained low domestic and international demand and unexpected difficulties faced by enterprises. At present, the mechanical industry continues its trend of differentiation, and the added value of manufacturing industries such as instruments and meters is on the rise. The main general machinery products are showing varying degrees of decline, but overall opportunities outweigh challenges. China's equipment industry will present new development forms and trends, with new energy vehicles, high-end equipment, intelligent manufacturing, and other areas becoming growth highlights.

The downward pressure on the equipment industry has been reduced, and the production and export growth rates have steadily rebounded

Since 2015, the economic recovery of developed countries has remained slow, the expansion of emerging economies has been weak, and the impact of non economic factors such as geopolitics still exists. Our country's economy is in a difficult process of transitioning from old to new driving forces. Although the overall trend of stable economic operation has not changed, the growth rate of added value in China's equipment industry has remained low in the first eight months due to the downward fluctuations and sluggish demand in major industries such as automobiles. In September and October, industries such as automobiles quickly rebounded, and the growth rate of the equipment industry also stabilized and rebounded. From January to October, the industrial added value of equipment manufacturing enterprises above designated size increased by 5.2% year-on-year, lower than the national industrial level of the same period and less than half of the same period in 2014. It is expected that the growth rate of China's equipment industry will continue to rebound throughout the year, but under the pressure of shrinking investment demand and foreign trade situation, the rebound is limited. The growth rate for the whole year of 2015 was around 5.5%. In terms of exports, the growth rate of export value from January to October showed a monthly decline, with a cumulative year-on-year decrease of 2.15%. The downward trend in October slightly decreased, with a year-on-year decrease of 4.32%. It is expected that the export situation will remain severe throughout the year, with a cumulative year-on-year decrease of around 2.5% in the value of exports.

In 2016, under a series of policy stimuli at the beginning of the 13th Five Year Plan, the downward pressure on China's equipment industry will be reduced. Although the international economic situation remains severe, with the gradual implementation and acceleration of China's three major regional development strategies, medium - and long-term manufacturing power construction strategy, and the acceleration of international production capacity and equipment manufacturing cooperation, new growth points, growth poles, and growth belts are gradually forming, and the domestic economy will maintain a medium to high speed of growth. Driven by this, China's equipment industry will accelerate its development throughout 2016, with the growth rate of industrial added value accelerating year-on-year and expected to remain around 7% for the whole year. In terms of exports, during the 13th Five Year Plan period, China will cultivate and develop the equipment industry as a new leading export industry. At the same time, due to the decline in the export base in 2015, the growth rate of China's equipment product exports is expected to accelerate and recover in 2016. The value of exports will achieve year-on-year growth, and the cumulative growth rate for the whole year is expected to be around 5%.

The trend of continued differentiation in the mechanical industry

The mechanical industry continues its trend of differentiation. Since 2015, China's machinery industry has faced significant difficulties in operation, with the growth rate of major indicators hitting a new low and showing an overall sluggish trend, with some industries showing differentiation in performance. From January to October, the added value of general equipment manufacturing increased by 3.2% year-on-year, specialized equipment manufacturing increased by 3.5%, electrical machinery and equipment manufacturing increased by 7.3%, and instrument manufacturing increased by 5.7%. The production of major general mechanical products such as pumps, gears, gas compressors, fans, etc. has shown varying degrees of decline; The output of metal cutting machine tools decreased by 8.2% year-on-year, among which the output of CNC metal cutting machine tools decreased by 9.8% year-on-year, and the output of metal forming machine tools decreased by 6%; The overall production of construction machinery has declined, with excavator and loader production decreasing by 24.5% and 28.9% respectively year-on-year; The production of traditional power generation equipment such as thermal power and wind power has decreased significantly, but the production of wind turbines has increased by 15.8% year-on-year; The production of large tractors increased significantly by 32.3% year-on-year, while the production of medium-sized tractors increased by 7.2%, but the production of small tractors decreased by 15.5% year-on-year.

In 2016, uncertain factors affecting the economic operation of the industry still exist, and the machinery industry will continue to face severe tests. But with the gradual implementation of national macroeconomic policies and the gradual improvement of the macroeconomic situation, the downward trend of the machinery industry will also gradually stabilize. In addition, positive factors for industry development are constantly accumulating, and some enterprises, industries, and regions that started early in structural adjustment will accelerate their recovery. At the same time, some mechanical industries will continue their growth and differentiation trend: traditional investment products such as engineering machinery, heavy machinery, mining machinery, petrochemical equipment, and conventional power generation equipment, as well as industries with relatively surplus production capacity such as machine tools, AC motors, low-voltage electrical appliances, wires and cables, and small and medium-sized ordinary agricultural machinery products, will continue to decline. New agricultural machinery, energy-saving and environmental protection equipment, cultural relics protection equipment, modern logistics equipment supported by the state will accelerate their growth.

Intelligent manufacturing continues to accelerate the innovative development of high-end equipment

Intelligent manufacturing continues to accelerate its development. Since 2015, intelligent manufacturing has received significant policy attention. Made in China 2025 and "Internet" Action * deploy intelligent manufacturing, propose to vigorously develop intelligent manufacturing, carry out pilot demonstration of intelligent manufacturing, implement major projects of intelligent manufacturing, * promote intelligent manufacturing process. The cooperation between China and Germany in intelligent manufacturing and Industry 4.0 has entered a practical stage, and a regular working mechanism has been officially established. The new business models represented by intelligent factories, digital workshops, additive manufacturing technology applications, large-scale personalized customization, network collaborative development, online monitoring, remote diagnosis, and cloud services are rapidly developing. The application of intelligent equipment and products such as industrial robots, service robots, new sensors, intelligent instruments and control systems, wearable devices, smart home appliances, and smart grids is constantly expanding, and the demand scale is showing a rapid expansion trend.

In 2016, with the advancement of intelligent manufacturing to new heights in the 13th Five Year Plan, the promotion routes of intelligent manufacturing in various fields have been further clarified, and Sino German cooperation has deepened. The country will build an open, shared, and collaborative intelligent manufacturing industry ecosystem, promote the intelligent upgrading of production equipment, optimization and transformation of process flow, all-round sharing of basic data, and continuous breakthroughs in key intelligent equipment and products, core components, and promote the continuous development and growth of industries such as new generation information and communication technology, high-end equipment, energy-saving and new energy vehicles, power equipment, agricultural machinery equipment, new materials, biomedicine, and high-performance medical devices, gradually forming a new manufacturing system. And further rely on innovative industrial formats and development models of intelligent manufacturing to cultivate new growth points in the industry.

New progress has emerged in the innovative development of high-end equipment. In 2015, in response to changes in domestic and international market demand, the equipment manufacturing industry continued to transform and upgrade, and significant progress was made in the development of high-end equipment. The proportion of output value of high-end equipment manufacturing industry in the equipment manufacturing industry gradually increased. The "Made in China 2025" plan specifies that the high-end equipment innovation project is one of the five projects guided and promoted by the government. It proposes to organize and implement a number of innovation and industrialization projects and major projects, including large aircraft, aviation engines and gas turbines, civil aerospace, intelligent green trains, energy-saving and new energy vehicles, marine engineering equipment and high-tech ships, complete sets of smart grid equipment, CNC machine tools, nuclear power equipment, high-end diagnostic and treatment equipment, etc. The purpose is to concentrate resources, coordinate progress, break through bottlenecks, enhance innovation and development capabilities and international competitiveness, and seize the high ground of competition.

In 2016, the innovation and development of high-end equipment became increasingly evident as the main trend for the future development of the manufacturing industry. China will deeply implement the innovation driven development strategy, focus on building new engines and supporting platforms for development, and accelerate the cultivation of new drivers of economic growth. With technological innovation as the core, public service platforms as the support, major projects as the starting point, and industrial applications as the goal, the innovation and development of high-end equipment will be accelerated. A number of iconic and highly driving products and major equipment will be laid out at an accelerated pace, and the level of independent design, system integration, and core component research and development technology will gradually improve. The industrial innovation capability will continue to enhance. A batch of first high-end equipment will be piloted and demonstrated in the fields of national economic construction, social production and life, and national defense construction. The industrial development path and mode will make breakthroughs, driving the adjustment and transformation of traditional industrial structure, and laying a more solid foundation for building new competitive advantages in China's manufacturing industry and building a manufacturing powerhouse.

Domestic effective demand continues to be sluggish, and enterprises still face difficulties in production and operation

Domestic effective demand continues to be sluggish. Affected by weak domestic and international demand, equipment product orders have generally decreased, and market competition has become more intense. The overall price level has continued the downward trend of recent years. From January to September 2015, the cumulative price of equipment products decreased by 1.2% year-on-year, and the decline further expanded. The overall social environment is not conducive to the development of the real economy, and the willingness of enterprises to invest is relatively weak. From January to October, the national fixed assets investment (excluding farmers) was 44742.5 billion yuan, up 10.2% year on year, and the growth rate continued to decline. Among them, the investment in the manufacturing industry was 1.48458 trillion yuan, a year-on-year increase of 8.3%; The investment in the equipment manufacturing industry was 5948 billion yuan, a year-on-year increase of 10.4% and a growth rate 0.3 percentage points higher than that from January to September. However, the total planned investment in new industrial projects nationwide only increased by 4.1% year-on-year. At the same time, the PMI index of China's manufacturing industry in August, September, and October was 49.7%, 49.8%, and 49.8% respectively, which remained below 50% for three consecutive months. Therefore, in 2016, we still need to pay attention to the issue of low domestic effective demand in China's equipment manufacturing industry.

Exports still face certain pressure. The current path of international economic recovery is still tortuous, and the overall demand in the international market is still weak. From the perspective of manufacturing PMI, the United States and other countries are still hovering at the bottom. Although Europe and Japan have a relatively stable recovery momentum in recent times, their expansion efforts are weak and their foundation is not solid. The competition between industries in various countries is still fierce, and China still faces significant trade protection pressure in the international market. The impact of non economic factors such as geography still exists, and the negative factors that inhibit the growth rate of China's foreign trade continue. The tendency of equipment manufacturing enterprises to encounter trade barriers such as technical, green and environmental protection, and standards in their exports is increasing. Meanwhile, from the perspective of manufacturing export orders, the export order index has been below 50% since October 2014 and has shown a downward trend. In October 2015, it was 47.4%, a decrease of 2.5 percentage points year-on-year. Although domestic policies are expected to accelerate the growth rate of China's equipment product exports, the environmental situation abroad will still exert significant pressure on exports.

The production and operation of enterprises are still difficult. One is the increase in cost pressure and the decrease in profit margin. From January to September 2015, the main business revenue of equipment industry enterprises increased by 3.22% year-on-year, but the main business cost increased by 3.78% year-on-year, the management expenses increased by 6.69%, and the accounts receivable increased by 6.5% year-on-year, resulting in a decrease of 0.03% in the total profit of the enterprise. Moreover, the factor costs, environmental costs, and social burdens faced by the enterprise are constantly increasing. Secondly, the inventory of finished products has been increasing month by month, with a year-on-year growth of 6.83% from January to September, making it difficult for enterprises to sell their products. Thirdly, the financing pressure continues to increase. Although the central bank has lowered the reserve requirement ratio and interest rates multiple times this year, banks are reluctant to lend and some enterprises are unwilling to lend. The financing difficulties, high loan costs, and heavy burden of manufacturer guarantee financing commonly reflected in industries such as engineering machinery and shipbuilding are more prominent. Currently, the financing costs of many private shipbuilding enterprises have reached 8% to 12%, and the financing difficulties of enterprises have led to the loss of new ship orders in many industries. In 2016, China's equipment industry enterprises will still face significant difficulties in production and operation.

Some industries urgently need to accelerate structural adjustment. Since 2015, some industries in China's equipment manufacturing industry have achieved rapid growth through structural adjustment, but there are still some industries with excess low-end production capacity and intensified vicious competition. In the context of promoting the development of intelligent manufacturing and high-end equipment during the 13th Five Year Plan period, these industries urgently need to accelerate structural adjustment and transformation and upgrading. In China, as one of the main industries in the field of intelligent manufacturing, industrial robots are mainly used for mid to low end products such as handling and loading/unloading robots, mostly three-axis and four axis robots. The high-end industrial robot market with six or more axes applied in automotive manufacturing, welding and other fields is mainly occupied by Japanese and European and American companies. Due to the low entry threshold of the industry, many enterprises blindly invest, assemble land everywhere, and repeat low-level construction, resulting in a tendency of overcapacity in emerging industries. Among the more than 40 parks and 800 enterprises in China, there are enterprises that can truly achieve independent high-end manufacturing and profitability.

Optimize industrial layout and enhance the level of intelligent manufacturing

Strengthen independent innovation and enhance industry competitiveness. Firstly, in accordance with the deployment and requirements of "Made in China 2025", we will accelerate the organization and implementation of national manufacturing innovation construction projects, high-end equipment innovation projects, industrial strong foundation projects, green manufacturing projects, etc. We will initiate the construction of a number of national innovation and national laboratories in the field of equipment manufacturing, focus on key core technologies, basic common technologies, integrated innovation capabilities, etc., and promote pilot demonstration applications. Secondly, we will continue to organize and implement major scientific and technological projects in the field of equipment, as well as scientific research or industrialization projects, and demonstrate the launch of a number of emerging growth industries such as robotics and 3D printing to support special projects, guiding enterprises to increase research and development investment and overcome bottlenecks. The third is to accelerate the formulation and promotion of innovative application policies such as the insurance compensation mechanism for the first set of major technological equipment, encourage manufacturing enterprises and user departments to jointly carry out research and development, and promote the application of research and development results. The fourth is to encourage the strengthening of cooperation between industry, academia, research and application, promote the construction of industrial technology innovation alliances, accelerate the establishment of industrial common technology platforms and industry testing and testing service platforms, and strengthen the cultivation of innovative and applied talents.

Accelerate the development level of intelligent manufacturing. One is to accelerate the pilot demonstration of intelligent manufacturing, promote the widespread application of intelligent manufacturing in production processes, enterprise management and services, energy management, logistics and other aspects, accelerate the development of a batch of intelligent equipment and products, and promote the integrated application of intelligent manufacturing production modes. The second is to accelerate the organization and implementation of intelligent manufacturing projects, develop intelligent products and independently controllable intelligent devices and achieve industrialization, build intelligent factories and digital workshops in various fields, establish intelligent manufacturing standard systems and information security guarantee systems, and build an intelligent manufacturing network system platform. Third, in combination with the "Internet" plan, accelerate the integrated innovation and engineering application of industrial cloud, Internet and other new generation information technology and manufacturing equipment integration, build a cooperation platform, and accelerate the intelligent and service-oriented transformation of the manufacturing industry. The fourth is to accelerate the cooperation between China and Germany in intelligent manufacturing and promote the development of intelligent manufacturing in various fields.

Actively promote enterprises to explore domestic and international markets. One is to implement various measures to stabilize growth, take multiple measures, and create a favorable domestic market demand environment for equipment manufacturing enterprises. Secondly, we will accelerate the implementation of the Guiding Opinions on Promoting International Cooperation in Production Capacity and Equipment Manufacturing, strengthen policy exchanges and cooperation among departments, jointly promote the construction of overseas economic and trade zones, improve the platform for government enterprise bank cooperation, and continue to promote the equipment manufacturing industry to go global. Third, support and guide domestic advantageous equipment enterprises to promote project cooperation in the fields of rail transit equipment, electric power equipment, petrochemical and metallurgical equipment, automobiles, engineering machinery, agricultural machinery, aviation equipment, ships and marine engineering equipment with the countries and regions along the "the Belt and Road" as the *.

  Promote structural adjustment and optimize industrial layout. One is to optimize the product structure. Encourage the adoption of high-tech transformation to enhance the traditional equipment manufacturing industry, accelerate the cultivation and development of strategic emerging advanced equipment manufacturing industries such as high-end equipment, intelligent manufacturing, and new energy vehicles. The second is to optimize the organizational structure. Focusing on industries such as automobiles and ships, vigorously promote enterprise mergers and resource integration, improve the industrial concentration of these industries, and build large enterprise groups with strong core competitiveness and international business capabilities; Strengthen the formulation of standards and industry access policies around emerging industries such as industrial robots, civilian drones, and additive manufacturing, to regulate industry development and market competition. The third is to optimize the spatial layout, create a number of industrialized demonstration bases with good project growth potential, high-end industrial level, prominent leading enterprises, and complete cluster supporting facilities, and build an internationally renowned equipment manufacturing industry cluster.