As the integration of the Chinese economy with the global economy continues to deepen, more and more “made in China†products are entering companies and homes around the world. However, most of these products merely rely on labor cost advantages to be produced and assembled in China, and it is difficult to leave the support of advanced foreign technologies and equipment. This shows that many of our products are still at the “Chinese production†stage rather than the “Made in China†stage. One of the important reasons for this problem is that China’s equipment manufacturing industry still needs to be developed. We believe that in order to achieve the transition from "Chinese production" to "Made in China," equipment manufacturing is facing a breakthrough, and related listed companies have investment opportunities. It can be seen that these measures are similar to Japan's industrial policies implemented in the 1960s and 1970s, and are suitable for China's current industrial development stage. They are expected to promote the accelerated development of the equipment industry and lay the foundation for achieving the upgrade from "Chinese production" to "Made in China." . MSB Breaker Chisels MSB Breaker Chisels Handan Hanbing Machinery Manufacturing Co.,Ltd , https://www.handanhanbing.com
Equipment manufacturing industry urgently needs to be developed
Equipment manufacturing industry is an important symbol of national industrialization, modernization level and comprehensive national strength. The level of manufacturing in a country depends to a large extent on the level of development of equipment manufacturing industry. Although after more than 50 years of development, China's equipment manufacturing industry has achieved a series of major achievements, and it has formed an equipment manufacturing system with complete categories and considerable scale. However, compared with the international advanced level, China's equipment manufacturing industry is still in urgent need of development. .
The most fundamental gap in China's equipment manufacturing industry is the lack of independent innovation capabilities. The equipment industry is still weak in the research and development capabilities of new technologies and new products, and lacks independent intellectual property rights. The industry's main technology depends on foreign countries, and a large number of advanced equipment still mainly rely on imports. For example, 100% of optical fiber manufacturing equipment, 85% of integrated circuit chip manufacturing equipment, 80% of petrochemical equipment, and 70% of car industrial equipment, CNC machine tools, textile machinery, and offset printing equipment are all imported products.
In addition, the scale of domestic enterprises is generally small, and there are currently more than 30,000 equipment manufacturing companies, and no one can rank among the top 500 in the world. The lack of large-scale backbone enterprises leads to low industrial concentration and related industrial clusters have not been formed. In terms of industrial structure, labor-intensive industries are still dominant, and technology-intensive industries are significantly behind. The proportion of equipment manufacturing in the manufacturing industry is less than 30%, which is far lower than the 41.9% in the United States, 43.6% in Japan, and 46.4% in Germany.
The weak status of the equipment industry has seriously affected the current process of upgrading our industrial structure. Without the development of the equipment industry, it will be difficult to move from "Chinese production" to "Made in China."
Increased policy support
Looking at the history of the world economy, in the process of rapid economic growth, the developed countries have not supported the equipment industry through reasonable industrial policies and achieved industrial upgrading. Take Japan as an example. In the 1960s and 1970s, the Japanese government’s supporting policies for the shipbuilding, automobile, and electromechanical equipment industries included the following: the adoption of relevant laws and regulations to provide favorable conditions for the development of the industry; and the provision of multiple financing for the financing of key industries. Policies to assist; to protect and support emerging industries through taxation and tariffs; and to supplement the economic policies with semi-compulsory means such as “administrative guidanceâ€. As a result, Japan’s equipment industry has rapidly achieved scale expansion, avoided premature mergers by foreign companies, and “Made in Japan†has gradually become synonymous with cost-effectiveness.
After decades of twists and turns, China's equipment industry has now embraced industrial policy. The State has successively promulgated the "State Council's Circular on Several Implementation Policies for the Implementation of the National Medium- and Long-Term Scientific and Technological Development Plan Outline (2006-2020)" and the "State Council's Opinions on Accelerating the Revitalization of the Equipment Manufacturing Industry," and other documents to promote major technologies. Equipment autonomy. On the basis of learning from foreign practices, we will study and formulate relevant laws and regulations for the revitalization of equipment manufacturing; increase financial support for major technology equipment companies; encourage qualified equipment manufacturers to raise funds through listing financing, issuing corporate bonds, etc. Establish a reasonable tax policy to encourage enterprises to increase R&D investment; At the same time as importing equipment, introduce advanced design and manufacturing technologies, and support domestic companies to participate in subcontracting and realizing local manufacturing as much as possible.
Focus on stocks with long-term opportunities
Specifically, the following sub-sectors are expected to achieve breakthroughs within a short period of time due to the fact that they are in line with global industrial transfer trends, or meet the needs of domestic bottleneck industry development, or have a narrow gap with international advanced technologies. Companies are expected to benefit from this, and related listed companies are also expected to provide investors with long-term investment opportunities.
CNC equipment manufacturing China's current production capacity of CNC machine tools ranks fifth in the world, and CNC machine tools and high-precision machine tools grow faster. The major listed companies have G Shen Machine (000410). The company's research and development capabilities and output of CNC machine tools ranks first in China.
The core technology of the information industry, represented by the application of computer technology, communication technology and network technology, is the high-speed micro-chips of integrated circuits. The listed company has G Shengyi (600183), and the company is the leading company in China's CCL industry.
Railway transport equipment manufacturing China plans to invest 2 trillion yuan during the "Eleventh Five-Year Plan" period for the construction of railway transportation. The key company is G Jinxi (600,495). The hollow shaft of the high-speed train used by the company for high-speed trains is leading in China. In the G era (600458), the core market share of the elastic components of the railway reaches approximately 40%.
The development of high-efficiency, clean engine development for engine equipment is the main direction of development. The key company is G Weifu (000581). The company is the largest manufacturer of automotive engine fuel injection systems in China; G Heavy Machinery (600150). The company is the largest domestic production and research and development base for marine high-power diesel engines with the highest technological development capability. .
The focus of shipbuilding development is on large-scale ore and crude oil transport ships, container ships, LNG ships, high value-added ships and ancillary equipment. The major listed companies are G Jiangnan (600072). The company has the advantage of the CSSC Group's shareholders to produce high value-added marine equipment and large-scale liquefied gas tanks.