Analysis of China's Machine Tool Market and Industry Operation in 2016

2016 is the first year of entering the "Thirteenth Five-Year Plan". In order to adapt to the "new normal" of China's economy and cope with the problems and difficulties in economic development, the Chinese government adopts the development idea of ​​supply-side structural reform as the main line, and At present, China's economic characteristics and actualities, put forward the key tasks of the supply-side structural reform of "three to one, one reduction and one supplement". In the coming period, "reform is the main line, stability is the bottom line" or it will become the main theme of China's economic operation. In 2016, under the combined effect of China's stable economic growth policy, especially the sound monetary policy and proactive fiscal policy, the operations in the real estate, automobile, service industry and new technology-based business formats have experienced explosive growth, driving economic operations. Gradually stabilized. Affected by this, China's machine tool market and industry also showed a steady decline for the first time in six years (since 2011). In the following, according to the information and data of the national statistical bureau, customs and association industry statistical key contact network, comprehensive analysis of the current operating state and trend of China's machine tool market and industry.

First, the market and industry operations are stabilizing in the short term
1. The machine tool market has generally stabilized. In 2016, China's total machine tool consumption was about 27.5 billion US dollars, which was flat year-on-year. Among them, the consumption of metal cutting machine tools was about 16.4 billion US dollars, down 4.1% year-on-year; the consumption of metal forming machine tools was about 11.1 billion US dollars, an increase of 6.7%. In 2016, the total consumption of Chinese tools was about US$4 billion, down 11.1% year-on-year. Compared with the growth rate of the above indicators in the same period of 2015, they rose by 13.5, 10.3, 19.0 and 1.0 percentage points respectively. Therefore, in 2016, China's machine tool consumption market showed signs of stabilization.
2. The machine tool industry rebounded slightly. In 2016, the total output of China's machine tool industry was about 22.9 billion US dollars, up 3.6% year-on-year. Among them, the output of metal cutting machine tools was about 12.2 billion US dollars, which was flat year-on-year; the output of metal forming machine tools was about 10.7 billion US dollars, an increase of 8.1%. Machine tool production was about 810,000 units, down 1.1% year-on-year. Among them, the output of metal cutting machine tools was about 610,000 units, down 1.9% year-on-year; the output of metal forming machine tools was about 200,000 units, up 1.5% year-on-year. In 2016, China's tool output was approximately US$5.1 billion, down 8.9% year-on-year. Compared with the growth rate of the above indicators in the same period of 2015, they rose by 13.0, 9.0, 18.1, 11.7, 11.3, 11.9 and 2.4 percentage points respectively. Therefore, in 2016, China's machine tool industry generally showed a slight rebound.
3. The activity of foreign trade in machine tool products decreased significantly. The total import and export value of machine tools and tools in 2016 was approximately US$23.26 billion, down 8.8% year-on-year. Among them, exports were 10.29 billion US dollars, down 4.9% year-on-year; imports were 12.97 billion US dollars, down 11.7% year-on-year; the trade deficit was 2.68 billion US dollars, down 30.7% year-on-year.

(1) Exports: Continue to show a downward trend In 2016, the export dependence of China's machine tools and tools was 12.7% and 51.0%, respectively, which was -1.8 and 4.6 percentage points respectively compared with the same period in 2015.
In 2016, China's total machine tool exports totaled approximately US$2.9 billion, down 9.4% year-on-year. Among them, the export of metal cutting machine tools was about 1.9 billion US dollars, down 9.5% year-on-year; the export of metal forming machine tools was about 1 billion US dollars, down 9.1% year-on-year. In 2016, China's total tool exports totaled approximately US$2.6 billion, which was flat year-on-year. Compared with the growth rate of the above indicators in the same period of 2015, the changes were -3.5, -2.0, -6.4 and 7.1 percentage points respectively. Although the rapid depreciation of the RMB exchange rate and stable export measures in 2016 have a certain role in promoting exports, the decline in exports reflects the recent downturn in the international economy and major international consumer markets.

(2) Imports: Still significantly decreasing In 2016, the import dependence of China's machine tools and tools was 27.3% and 37.5%, respectively, which was -2.7 and 4.2 percentage points respectively compared with the same period in 2015.
In 2016, China's total import of machine tools was about 7.5 billion US dollars, down 12.8% year-on-year. Among them, the import of metal cutting machine tools was about 6.1 billion US dollars, down 12.9% year-on-year; the import of metal forming machine tools was about 1.4 billion US dollars, down 12.5% ​​year-on-year. In 2016, the total import of Chinese tools was approximately US$1.5 billion, which was flat year-on-year. Compared with the growth rate of the above indicators in the same period of 2015, they rebounded by 7.6, 7.9, 3.7 and 6.8 percentage points respectively. Since the imported products of machine tools are mostly high-end machine tool main machines, cutting tools and machine tool core functional components, the import continues to drop significantly, reflecting that the machine tool consumption market is still in the process of power conversion, lacking long-term stable demand support.

Second, the market and industry operating pressures still exist
In-depth analysis of the main economic indicators of China's machine tool market and industrial operation in 2016 is not difficult to find. In 2016, the market stabilized and the industry rebounded mainly due to the pull of domestic demand. The export to the international market and the import of foreign investment activities are still lacking. The domestic demand is mainly driven by government investment (up 8.1%). In 2016, the growth rate of private investment was only 3.2% (down to 2.1% in the middle of the year), down 6.9 percentage points from 2015. Therefore, it is necessary to calmly judge the situation of the machine tool market and industrial operation in 2016, and pay more attention to and analyze the potential problems and risks appearing in the operation.

1. Low demand: traditional users have overcapacity, and old and new kinetic energy conversion lags on the output data of 91 major products of China's industry from 2000 to 2015. Considering its impact on machine tool consumption, the weighted summary is respectively obtained from China's machine tool and tool consumption demand index. It can be seen from the index that in the past 15 years, the demand for metal processing machine tools has shown a unilateral downward trend after peaking in 2010. Although there is a short-term rebound in 2013, the overall trend is still declining; the demand for cutting tools is in 2011. Before the year, it showed a rapid growth trend. From 2011 onwards, it showed the state of top operation, and it began to decline in 2014.
Since the consumption of machine tools is affected by the relationship between money supply and supply and demand, after the rapid growth of machine tool products in the field of more than 10 years, the number of machine tools in the traditional user field is huge and the machine tools are in short service. Under the general environment of the overcapacity of traditional users and the positive shift of the money supply to neutral, the demand for machine tools will continue to increase downward pressure.
The cutting tool consumption demand is directly proportional to the user's operating rate. With the transformation and upgrading of the user industry, the production efficiency brought by the new technology application will increase, the consumption level (performance or unit price) of the cutting tool will continue to increase, and the consumption scale (quantity or total amount) ) will decline.

2. The operation quality is declining and the operation risk is still not resolved. According to the relevant data of the National Bureau of Statistics, the profit margin of the main business of metal processing machine tools in 2016 was about 4.9%, which was 1.6 percentage points lower than that in 2011. The profit margin of the main business of the tool is about 7.5%, which is flat compared with 2011. In 2016, the inventory of finished metal products in the metalworking machine tools and tools industry increased by 162.2% and 24.4% respectively compared with 2011. In 2016, the accounts receivable of the metalworking machine tools and tools industry increased by 64.3% and 71.7% respectively compared with 2011.
From the situation reflected by the industry statistics key contact network data of China Machine Tool Industry Association, the trend of declining operation quality is more obvious. In 2016, the growth rate and profit margin of the main business of metal processing machine tools were -3.4% and -0.6%, respectively, down 18.3 and 6.5 percentage points respectively compared with the same period in 2011. In 2016, the main business revenue growth rate and profit margin of the tools were -2.4% and 5.4%, respectively, down 21.3 and 2.4 percentage points respectively compared with the same period in 2011.

Analysis of the influencing factors in 2017
Judging from the recently announced macroeconomic policies and measures, 2017 will continue to promote supply-side structural reforms, increase the implementation of key tasks of “three to one, one reduction and one supplement”; maintain a sound monetary policy, but will be neutral. Tightly, the growth of money supply has slowed down; the international environmental uncertainty has increased, the foreign trade environment has tightened; the renminbi still bears a large depreciation pressure, and the pressure on foreign exchange reserves has increased; deepening the reform of the statistical management system, focusing on improving the authenticity of statistical data. ,and many more. The above macro factors will have a corresponding impact on the Chinese machine tool market. For example, the demand in the traditional user sector will continue to be sluggish, and the capacity will be gradually implemented. The new requirements in the emerging and traditional fields will further upgrade the requirements for machine tools; the external competition brought by imports and The trade friction caused by export will show an increasing trend at the same time; the business operation will further differentiate, and some enterprises will face the exit situation as the market clears.
Based on the above factors, in 2017, China's machine tool consumption market and industry will maintain a low-level operation, and there is the possibility of repeatedly challenging the bottom.
(China Machine Tool Industry Association Information and Statistics Department)

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