High-end equipment imports to replace the hot and basic parts business opportunities
The decrease in economic and investment growth means that the growth rate of capital-intensive industries and labor-intensive industries, which are more relevant to fixed-asset investment, will slow down, while the growth of technology-intensive high-end equipment manufacturing will accelerate. Starting from the “Twelfth Five-Year Plan†period, China’s high-end equipment import substitution is expected to enter a rapid phase. High-tech high-end equipment at this stage includes construction machinery, heavy mining machinery, railway equipment, new energy equipment, high-end CNC machine tools, and petrochemicals. Mechanical, mechanical parts and other sub-sectors.
Economic growth rate will slow down Premier Wen Jiabao said earlier this year that the "Twelfth Five-Year Plan" determines that China's economic development rate is 7%. We must focus our efforts on improving the quality and efficiency of economic growth. It is foreseeable that the economic growth during the 12th Five-Year Plan period will slow down significantly, and the GDP growth rate next year may be reduced from about 9.7% this year to less than 9%.
After the economic growth rate is lowered, the country will calmly adjust the fixed asset investment with real estate control and infrastructure investment control. The objective of the adjustment is to convert the extensive economic growth driven by investment and exports into major ones. Economic growth driven by consumption-led industrial upgrading is the main feature. It is foreseeable that investment growth during the 12th Five-Year Plan period will slow down significantly, and the growth rate of fixed asset investment in 2012 will remain basically the same as this year, remaining at around 23.0%.
With the investment growth rate flat and the export growth rate slowing down, consumption growth will increase significantly. The contribution of investment and exports will continue to decrease, and the contribution of consumption will continue to increase. This trend has already shown significant performance in the first three quarters of this year. In September, China’s export growth rate was 17.1%, which was 7.4 percentage points lower than the growth rate in August. Fixed-asset investment increased by 24.9% in the first three quarters, down 0.1% from August. The total retail sales of consumer goods in the first three quarters increased by 17% year-on-year, and contributed 47.9% to GDP, up 0.4% from the first half of the year. It is expected that this trend will continue during the 12th Five-Year Plan period.
High-end equipment entering the import substitution acceleration phase The high-end equipment manufacturing industry will face greater import substitution opportunities during the 12th Five-Year Plan. The main driving forces are as follows:
First, China's machinery products still have a high degree of import dependence. In general, the import dependency of internal combustion engines, instrumentation, office supplies, and food machinery is relatively high. However, the high-end products in almost every sub-industry rely on imports. For example, over 70% of high-power tractors and high-end rice and corn harvesters in Agricultural Machinery need to be imported or rely on foreign-funded enterprises, and more than 80% of high-speed high-speed engines in internal combustion engines need to be imported. More than 60% of high-power pump valves and reactors in machinery need to be imported. More than 95% of high-end CNC machine tools in machine tools need to be imported, and more than 90% of the high-pressure hydraulic pumps in the basic parts need to be imported. Higher import dependence provides a huge space for import substitution.
Second, the competitiveness of high-end equipment manufacturing has greatly improved. Over the past 30 years of reform and opening up, China’s basic manufacturing industry has made remarkable progress in its technological level and management level. This has provided conditions for the advancement of China’s high-end equipment manufacturing industry. At present, China has already established wind power nuclear power equipment, large-scale petrochemical equipment, and engineering machinery. Major breakthroughs have been made in import substitution in heavy mining machinery and other fields, and many products have begun to enter the stage of rapid growth in import substitution. As shown in the chart below, the future international competition potential and import dependency will determine the progress of future import substitution in the industry. In the next five years, China will have a great potential for competition in the fields of construction machinery, heavy mining machinery, petrochemical general machinery and basic components, and it is expected to achieve substantial growth in import substitution.
Third, the high-end equipment manufacturing industry is the high-end part of the equipment manufacturing industry, with outstanding characteristics such as technology intensiveness, high added value, and large growth space; it is a symbol of the rise of a country’s strategic industries and industries; it is the basis of a country’s manufacturing industry. And where the core competitiveness lies. During the "Eleventh Five-Year Plan" period, the state successively promulgated the "Several Opinions of the State Council on Accelerating the Revitalization of the Equipment Manufacturing Industry" and the "Equipment Manufacturing Industry Adjustment and Revitalization Plan", and began the revitalization of China's high-end equipment manufacturing industry. In the “Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries†issued in October 2010, the high-end equipment manufacturing industry was identified as the seven strategic emerging industries that China’s key cultivation and development at this stage will develop into by 2020 The pillar industry of the national economy. The “Twelfth Five-Year Plan†of the “High-end Equipment Manufacturing†led by the Ministry of Industry and Information Technology has been basically completed and is expected to be introduced in the near future. According to the objectives set by the plan, by 2015, the sales value of high-end equipment will account for more than 20% of the equipment manufacturing industry, and the annual sales value will reach 6 trillion yuan. In the next ten years, the high-end equipment manufacturing industry will shoulder the heavy responsibility of “Made in China†to “China's Smart Manufacturing†and will usher in a period of gold growth.
The opportunities for general machinery and basic parts will be the largest. As the contribution rate of investment in the next five years will be reduced and the contribution rate of consumption will increase, we believe that investment opportunities in mechanical manufacturing industries closely related to investment in fixed assets, such as construction machinery, will decrease, and Industries in the manufacturing industry that are closely related to investment in fixed assets, import substitution, and industrial upgrading will have more investment opportunities. General machinery and basic parts will generate more investment opportunities due to the structure of the downstream industry and the rapid import substitution upgrade.
General machinery is an important component of the equipment manufacturing industry and plays a very important role in the national economic construction. It is responsible for providing complete sets of technical equipment for the petroleum, chemical and petrochemical industries, as well as auxiliary equipment for the power, metallurgy, shipbuilding, military, light industry, textile, and pharmaceutical industries. General machinery involves compressors, fans, pumps, valves, air separation devices, separation machines, drying equipment, gas purification equipment, vacuum equipment, variable speed gears, and various special equipment. Its technical level determines chemical, petrochemical, electric power, and metallurgy. The operational level of production facilities in the ship, military, light industry, textile, and pharmaceutical industries.
There are various types of basic mechanical parts and specifications, and they are widely used. They mainly refer to bearings, gears, molds, hydraulic parts, pneumatic components, seals, fasteners, etc., and are aerospace, weapons, machinery manufacturing, transportation, and construction projects. , Metallurgical and mining, petrochemical, power energy, electronic communications, light industrial textiles and other equipment to provide support, is an indispensable part of the equipment manufacturing industry, directly determines the performance, level, quality and reliability of major equipment and host products . It is a vital part of revitalizing the equipment manufacturing industry.
The downstream industries of general machinery and basic components are mainly concentrated in the productive demand of the manufacturing industry, and have less direct correlation with investment in fixed assets. While investment in fixed assets with infrastructure and real estate as the main content will be decelerated in the future, and fixed assets investment in the manufacturing industry is expected to maintain a relatively high growth rate, general machinery and basic components will have more robust downstream demand.
From the perspective of output value, the 2010 sub-industries of the machinery industry accounted for more than 1.20 trillion yuan in the sub-sectors of general machinery and basic parts, and all other sub-sectors were below 0.9 trillion yuan. At the same time, due to the low localization rate of general machinery and basic parts, there is a huge import substitution space. The output value of general machinery in 2010 will be 1.22 trillion yuan, the localization rate will be around 80%, and the import substitution space will exceed 240 billion yuan; the base component industry's 2010 production value will reach 1.28 trillion yuan, and its localization rate will be about 79%. The import substitution space About 268.8 billion yuan.
Economic growth rate will slow down Premier Wen Jiabao said earlier this year that the "Twelfth Five-Year Plan" determines that China's economic development rate is 7%. We must focus our efforts on improving the quality and efficiency of economic growth. It is foreseeable that the economic growth during the 12th Five-Year Plan period will slow down significantly, and the GDP growth rate next year may be reduced from about 9.7% this year to less than 9%.
After the economic growth rate is lowered, the country will calmly adjust the fixed asset investment with real estate control and infrastructure investment control. The objective of the adjustment is to convert the extensive economic growth driven by investment and exports into major ones. Economic growth driven by consumption-led industrial upgrading is the main feature. It is foreseeable that investment growth during the 12th Five-Year Plan period will slow down significantly, and the growth rate of fixed asset investment in 2012 will remain basically the same as this year, remaining at around 23.0%.
With the investment growth rate flat and the export growth rate slowing down, consumption growth will increase significantly. The contribution of investment and exports will continue to decrease, and the contribution of consumption will continue to increase. This trend has already shown significant performance in the first three quarters of this year. In September, China’s export growth rate was 17.1%, which was 7.4 percentage points lower than the growth rate in August. Fixed-asset investment increased by 24.9% in the first three quarters, down 0.1% from August. The total retail sales of consumer goods in the first three quarters increased by 17% year-on-year, and contributed 47.9% to GDP, up 0.4% from the first half of the year. It is expected that this trend will continue during the 12th Five-Year Plan period.
High-end equipment entering the import substitution acceleration phase The high-end equipment manufacturing industry will face greater import substitution opportunities during the 12th Five-Year Plan. The main driving forces are as follows:
First, China's machinery products still have a high degree of import dependence. In general, the import dependency of internal combustion engines, instrumentation, office supplies, and food machinery is relatively high. However, the high-end products in almost every sub-industry rely on imports. For example, over 70% of high-power tractors and high-end rice and corn harvesters in Agricultural Machinery need to be imported or rely on foreign-funded enterprises, and more than 80% of high-speed high-speed engines in internal combustion engines need to be imported. More than 60% of high-power pump valves and reactors in machinery need to be imported. More than 95% of high-end CNC machine tools in machine tools need to be imported, and more than 90% of the high-pressure hydraulic pumps in the basic parts need to be imported. Higher import dependence provides a huge space for import substitution.
Second, the competitiveness of high-end equipment manufacturing has greatly improved. Over the past 30 years of reform and opening up, China’s basic manufacturing industry has made remarkable progress in its technological level and management level. This has provided conditions for the advancement of China’s high-end equipment manufacturing industry. At present, China has already established wind power nuclear power equipment, large-scale petrochemical equipment, and engineering machinery. Major breakthroughs have been made in import substitution in heavy mining machinery and other fields, and many products have begun to enter the stage of rapid growth in import substitution. As shown in the chart below, the future international competition potential and import dependency will determine the progress of future import substitution in the industry. In the next five years, China will have a great potential for competition in the fields of construction machinery, heavy mining machinery, petrochemical general machinery and basic components, and it is expected to achieve substantial growth in import substitution.
Third, the high-end equipment manufacturing industry is the high-end part of the equipment manufacturing industry, with outstanding characteristics such as technology intensiveness, high added value, and large growth space; it is a symbol of the rise of a country’s strategic industries and industries; it is the basis of a country’s manufacturing industry. And where the core competitiveness lies. During the "Eleventh Five-Year Plan" period, the state successively promulgated the "Several Opinions of the State Council on Accelerating the Revitalization of the Equipment Manufacturing Industry" and the "Equipment Manufacturing Industry Adjustment and Revitalization Plan", and began the revitalization of China's high-end equipment manufacturing industry. In the “Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries†issued in October 2010, the high-end equipment manufacturing industry was identified as the seven strategic emerging industries that China’s key cultivation and development at this stage will develop into by 2020 The pillar industry of the national economy. The “Twelfth Five-Year Plan†of the “High-end Equipment Manufacturing†led by the Ministry of Industry and Information Technology has been basically completed and is expected to be introduced in the near future. According to the objectives set by the plan, by 2015, the sales value of high-end equipment will account for more than 20% of the equipment manufacturing industry, and the annual sales value will reach 6 trillion yuan. In the next ten years, the high-end equipment manufacturing industry will shoulder the heavy responsibility of “Made in China†to “China's Smart Manufacturing†and will usher in a period of gold growth.
The opportunities for general machinery and basic parts will be the largest. As the contribution rate of investment in the next five years will be reduced and the contribution rate of consumption will increase, we believe that investment opportunities in mechanical manufacturing industries closely related to investment in fixed assets, such as construction machinery, will decrease, and Industries in the manufacturing industry that are closely related to investment in fixed assets, import substitution, and industrial upgrading will have more investment opportunities. General machinery and basic parts will generate more investment opportunities due to the structure of the downstream industry and the rapid import substitution upgrade.
General machinery is an important component of the equipment manufacturing industry and plays a very important role in the national economic construction. It is responsible for providing complete sets of technical equipment for the petroleum, chemical and petrochemical industries, as well as auxiliary equipment for the power, metallurgy, shipbuilding, military, light industry, textile, and pharmaceutical industries. General machinery involves compressors, fans, pumps, valves, air separation devices, separation machines, drying equipment, gas purification equipment, vacuum equipment, variable speed gears, and various special equipment. Its technical level determines chemical, petrochemical, electric power, and metallurgy. The operational level of production facilities in the ship, military, light industry, textile, and pharmaceutical industries.
There are various types of basic mechanical parts and specifications, and they are widely used. They mainly refer to bearings, gears, molds, hydraulic parts, pneumatic components, seals, fasteners, etc., and are aerospace, weapons, machinery manufacturing, transportation, and construction projects. , Metallurgical and mining, petrochemical, power energy, electronic communications, light industrial textiles and other equipment to provide support, is an indispensable part of the equipment manufacturing industry, directly determines the performance, level, quality and reliability of major equipment and host products . It is a vital part of revitalizing the equipment manufacturing industry.
The downstream industries of general machinery and basic components are mainly concentrated in the productive demand of the manufacturing industry, and have less direct correlation with investment in fixed assets. While investment in fixed assets with infrastructure and real estate as the main content will be decelerated in the future, and fixed assets investment in the manufacturing industry is expected to maintain a relatively high growth rate, general machinery and basic components will have more robust downstream demand.
From the perspective of output value, the 2010 sub-industries of the machinery industry accounted for more than 1.20 trillion yuan in the sub-sectors of general machinery and basic parts, and all other sub-sectors were below 0.9 trillion yuan. At the same time, due to the low localization rate of general machinery and basic parts, there is a huge import substitution space. The output value of general machinery in 2010 will be 1.22 trillion yuan, the localization rate will be around 80%, and the import substitution space will exceed 240 billion yuan; the base component industry's 2010 production value will reach 1.28 trillion yuan, and its localization rate will be about 79%. The import substitution space About 268.8 billion yuan.
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