Two-tier polarization in Foshan's mechanical equipment manufacturing industry

　Some companies are experiencing a shortage of orders, while others are experiencing counter-cyclical growth.
　　
　　As the "mother machine" of industry, the mechanical equipment industry was the first to feel the changes in the macroeconomic trend of 2012. In the first three quarters of last year, large-scale equipment enterprises in Foshan still maintained a strong growth trend, completing a total industrial output value of 282.375 billion yuan, a year-on-year increase of 22.83%. However, starting from the third quarter, with the "downward trend" of the macroeconomic environment, orders for mechanical equipment enterprises in the region have fallen sharply.
　　
　　A person in charge of a mechanical equipment enterprise in Chencun told reporters that the overall order environment was acceptable in the first half of the year, but starting from August and September, orders began to decline significantly, at least by 30%, and some enterprises even stopped taking orders and switched to retail. A person in charge of the Guangdong Provincial Mechanical Industry Association noticed the phenomenon of reduced orders for mechanical equipment enterprises as early as mid-June. "Enterprises are unwilling to invest in equipment upgrades, putting considerable pressure on the entire pressure machinery industry, causing orders to decrease. It is estimated that orders for the entire industry have decreased by more than 50%." said Su Qingsen, director and vice general manager of Guangdong Lianxing Forging Press Machine Co., Ltd.
　　
　　Su Qingsen analyzed that the decrease in orders in the machinery industry is mainly due to the dual impact of domestic macroeconomic regulation and control and the European and American debt crisis. Many clients in the Chencun pressure machinery industry are mainly export-oriented. The appreciation of the RMB and international financial problems have led to a decline in exports, gradually affecting the upstream of the industrial chain. In addition, the home appliance and furniture industries in Shunde are closely related to real estate. When houses are not selling well, the demand for many products is also declining.
　　
　　Despite this, many mechanical equipment enterprises have experienced counter-cyclical growth. For example, Ezoom last year maintained a 30% increase, with an annual output value reaching 900 million yuan. He Peiliu, chairman of the Luniao Woodworking Machinery Association, also revealed that his own company maintained a 40% growth last year.
　　
　　A likely trend of low in the beginning and high at the end of the year
　　
　　"The situation at the beginning of 2012 is still unclear, and the overall situation is not optimistic." said Su Qingsen. Another person in charge of a mechanical equipment enterprise in Chencun also predicted that the entire "winter" will last for a relatively long time.
　　
　　Industry insiders generally believe that the rapid growth of the mechanical equipment industry in 2010 mainly benefited from the macroeconomic policies of the state to stimulate domestic demand and increase infrastructure construction. With the fading impact of the international financial crisis and the completion of the state's 4 trillion yuan investment plan, the market demand for domestic infrastructure construction is showing a downward trend. "From the perspective of the international situation, the economic recovery of European and American countries is slow, and overseas purchases are difficult to increase. Coupled with the appreciation of the RMB and continued domestic inflation, the competitiveness of domestic mechanical equipment has declined." said Wang Changhua, general manager of 365 Electrical Mall.
　　
　　Industry predictions indicate that with the change in the overall macroeconomic environment of the country, the growth rate of the mechanical equipment manufacturing industry may slow down in the next five years. A person in charge of the Guangdong Provincial Mechanical Industry Association stated that in the past 10 years, China's GDP has grown at an average annual rate of more than 13%, while the "Twelfth Five-Year Plan" will mark the beginning of a new cycle. In the next 5 years, there will be less emphasis on GDP growth, and the national economic growth rate will drop to around 7% or 8%, making it difficult to maintain double-digit growth. Against this backdrop, how the mechanical equipment industry should respond to this change and complete its transformation is a greater challenge for the industry.
　　
　　Bian Cheng predicts that the growth of the machinery industry mainly relies on the country's expansion of domestic demand. Therefore, the overall trend of the industry this year must depend on the adjustment of national macroeconomic policies and how to tilt towards the development of the real economy. He Peiliu believes that the machinery industry this year will show a trend of low in the beginning and high at the end, and the advantages of leading enterprises will become more obvious, and the "polarization" of enterprises will become more pronounced.
　　
　　"Going Global" will become a trend
　　
　　Low labor value-added is another weakness of Shunde's machinery industry.
　　
　　Bian Cheng said that although Shunde's total economic output ranks among the top three in the national county-level economy, once the resident population is excluded, Shunde's foundation is not abundant. The new generation of migrant workers born in the 1980s and 1990s are increasingly unable to tolerate the work model of returning home only once a year. They hope to live where they work, but the cost of settling in Shunde is currently high, which means rising production costs. Therefore, moving the machinery industry out of the affluent Pearl River Delta is the main direction of future development.
　　
　　The lack of industry supporting facilities will also force the mechanical equipment industry to continue to relocate. It is understood that the Shunde mechanical equipment manufacturing industry is mainly based on assembly, and the amount of spare parts procurement accounts for more than 80% of the sales of complete machines. However, due to environmental protection and rising production factors, local spare parts in Shunde are difficult to keep up with the growth rate of the entire industry. Difficulty in procurement and high procurement costs are becoming a "shortcoming" that restricts the continued development of mechanical equipment manufacturing enterprises.
　　
　　"In addition, the mechanical equipment industry has a huge transportation volume, and the supply and sales generate a large amount of logistics costs. By advancing from Anhui to the national market, Ma'anshan will have a greater advantage than Shunde." Bian Cheng said that the company wants to stay in Shunde to develop research and development, sales, assembly, and service systems, which is the headquarters economy. Keda Electric, where Bian Cheng works, has set up a branch factory in Ma'anshan City, Anhui Province, directly supplying the East China market through on-site production of complete machines. At the same time, the investment promotion department of Ma'anshan City also hopes that leading enterprises in Shunde's mechanical equipment manufacturing industry will move in. At the annual meeting of the Shunde Mechanical Equipment Manufacturing Industry Association this year, Ma'anshan City also specially sent representatives to attend.