As the Chinese economy increases its investment in infrastructure, the country is quickly becoming a key production base and market for power transmission and control products. However, although the development of the industry has attracted many foreign companies to come into the potential market, it provides China with both opportunities and challenges. Domestic industry has the opportunity to gain market insight and learn form most advanced western technologies. The annual four-day Power Transmission Control (PTC ASIA) exhibition serves local and international industry players as an ideal platform to exchange technologies and seek out potential areas for business cooperation. Over 1,300 exhibitors showcased the latest products and technologies. A number of leading foreign companies have joined in the show, including liquid transmission enterprise Bosch Rexroth and mechanical transmission industry giant Simens.
China is now the fourth largest market for hydraulics and pneumatics products in the world, and a huge exporter of machine components worldwide. But according to experts, China still needs to further development in its power transmission and control products industry if it is to succeed in this sector.
Great achievement
According to Liu Yuanjie, president of the China General Machine Components Industry Association, the output value of China’s machine components has increased more than 60 times over the past 30 years since the country started to opening up its economy, including gears, springs, fasteners, couplings, transmission chairs and metallurgy powder. However, there is still a long way to go before China can pride itself on being a strong manufacturer in the industry, said Liu, China needs to import key technologies and high-end products from foreign markets. This means domestic industry will prone to outside risks.
As profits slide because of rising labor and raw material costs, China have to consider the shrinking American and European demand due to global economic slowdown, though Chinese chain and fastener manufacturers already export over half its production.
“It is therefore important to diversify the market structure, turning to both domestic and emerging foreign markets like the Middle East and Southeast Asia for further growth,” said Liu. “Since the majority of Chinese machine component manufacturers are small and medium-sized companies, it is also important for them to be highly professional in a niche market in order to be really competitive in the international market.”
Investment crucial
Sha Baosen, chairman of the China Hydraulics, Pneumatics and Seals Industry Association, also sees the similar challenges. He said long-term investment is crucial now for building competitive edge of the industry and improve technology innovation with the sector’s capital and technology-intensive nature.
According to the association, only 10 percent of the country’s 21 billion yuan production in hydraulics, pneumatics and seals from last year were sold to foreign countries. “This shows the comparative weaknesses of China’s domestic industry,” said Sha. “China has long been lagged behind in key technologies involved in the production of automobile and engineering machinery components. We should work to enlarge the export volume in the sector because it is a technology-based industry and has high add-value.”
Sha also said, optimism remains due to new growth opportunities in the integration of microelectronics and IT technologies and control sector despite industry obstacles. Such kind of products is also in high demand in China. Sha also emphasized the importance of balancing the domestic market and export market in order to seize industry opportunities. To sooner gain real industry benefits, China should also accelerate its cooperation with the West.
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