New Quality Productivity Leads To Improve Quality And Efficiency in The First Half of The Year, The Economic Operation of Machinery Industry Has Made Steady Progress

On August 7, 2024, the information conference of China Machinery Industry Federation on the economic operation situation of machinery industry in the first half of 2024 was held in Beijing. The conference was presided over by Chen Bin, Member of the Standing Committee of the Party Committee and Deputy Director of the Expert Committee of China Machinery Industry Federation. Luo Junjie, executive Vice president of China Machinery Industry Federation, made the information release. Chen Shihua, deputy secretary general of China Association of Automobile Manufacturers, attended the conference as a guest.

The basic characteristics of the industry operation

Data from the National Bureau of Statistics show that the economic operation of the machinery industry got off to a good start in the first quarter of this year, the steady development trend in the second quarter is still solid, and the overall economic operation in the first half of the year is stable and progress is being made.

1. The scale of the industry continues to expand

By the end of June 2024, the number of enterprises above designated size in the machinery industry was 130,000, an increase of 11,000 compared with the end of June last year, accounting for 25.8% of the national industry and 0.8 percentage points higher than the same period last year; Assets totaled 37.6 trillion yuan, up 6.8 percent year on year, accounting for 21.8 percent of the country's industry and 0.2 percentage points higher than the same period last year.

2. The growth rate of value added was generally stable

In the first half of this year, the added value of enterprises above designated size in the machinery industry increased by 6.1% year-on-year, 0.1 percentage points higher than that of the national industry, but 0.4 percentage points lower than that of the manufacturing industry. The added value of the five major categories of national economic industries involved in the machinery industry has achieved year-on-year growth. Among them, the automobile industry played an obvious driving role, with the added value increasing by 9.8% year on year; The added value of general equipment, special equipment, electrical machinery and instrumentation industries grew at a slower pace of 2.8%, 2.1%, 4.7% and 5.2%, respectively.

3. Product production and sales were stable and improved

In the first half of this year, the output of 75 of the 122 mechanical products under key monitoring increased year-on-year, accounting for 61.5%; The output of 47 categories decreased year-on-year, accounting for 38.5%. Since this year, the proportion of products with year-on-year growth in cumulative output has remained above 55%, better than last year's level.

The production and marketing characteristics of key products are mainly shown as follows: first, the production and marketing of automobiles remain prosperous. In the first half of the year, the production and sales of automobiles were 13.891 million and 14.047 million respectively, up 4.9% and 6.1% year-on-year respectively; Among them, new energy vehicles continued to advance, with the production and sales of 4.929 million and 4.944 million units respectively, up 30.1% and 32.0% year-on-year respectively. Second, driven by the construction of clean energy and smart grid, the production of electrical equipment continues to be high. The output of generating units in the first half of the year was 111.09 million kW, representing a year-on-year increase of 14.4%; The output of solar cells was 286.29 million kW, up 17.8% year on year. Third, the acceleration of equipment investment drives the growth of processing equipment. The output of metal cutting machine tools in the first half of the year was 333,000 units, up 5.7% year on year; The output of industrial robots was 283,000 units, up 9.6% year on year. Fourth, the low level of construction machinery production stabilized. The output of excavators in the first half of the year was 149,000 units, up 7.7% YoY, and the output in June increased 22.2% YoY; In May and June, the output of loaders and concrete machinery turned from negative to positive year-on-year successively. Fifth, benefiting from the recovery of the market, the output of products serving the consumer sector continued to pick up, with the output of service robots and packaging equipment increasing by 22.8% and 7.8% respectively.

4. Investment growth slowed from a high level

After three consecutive years of rapid double-digit growth, fixed asset investment in the machinery industry has continued to grow since 2024, but at a slower pace. In the first half of this year, fixed asset investment in the machinery industry grew 9.3% year on year, slowing significantly from the previous year. Among the five categories of national economic industries mainly involved in the machinery industry, the growth rate of investment in general equipment and special equipment is relatively high, which are 14.0% and 12.6% respectively. Investment in automobiles, electrical machinery and instrumentation grew at a slower 6.5 percent, 3.5 percent and 4.5 percent, respectively. The growth rate of investment in the five major industries except electrical machinery was higher than that of fixed asset investment in the whole society (3.9%).

5. Steady progress was made in trade in goods

Since this year, machinery industry foreign trade continued last year better situation. According to the customs data, in the first half of this year, the total import and export volume of goods trade in machinery industry was 557.94 billion US dollars, up 4.1% year on year, accounting for 18.7% of the national goods trade; Among them, the import value was USD 143.39 billion, down 0.1% year on year, accounting for 11.2% of the country's goods trade; The export value reached USD 414.55 billion, up 5.6% year on year, accounting for 24.3% of the country's trade in goods; The trade surplus reached US $271.16 billion, up 8.9% year on year, accounting for 62.3% of the country's goods trade surplus.

In terms of trading partners, in the first half of this year, the import and export of machinery industries to countries jointly building the Belt and Road increased by 5.7% and 7.4% year-on-year respectively, and the import and export of machinery industries to ASEAN countries further improved by 6.7% and 11.5% year-on-year respectively. Imports to EU countries were flat and exports fell 3.5 per cent. Exports to the top three export trading partners -- the United States, Russia and Germany all grew year-on-year, with growth rates of 2.0%, 3.8% and 1.3% respectively. Exports to some Southeast Asian countries such as Vietnam, Laos and Cambodia and some Latin American countries such as Mexico and Brazil grew significantly, with growth rates ranging from 20% to 68%. Imports to Japan, Germany and South Korea, the top three import trading partners, all fell year-on-year, down 0.5%, 13.0% and 0.5% respectively; Imports from some European countries such as the Netherlands, the Czech Republic and Austria and some Southeast Asian countries such as Singapore and Vietnam are increasing significantly.

In terms of products, exports of mainframes and complete machines continued to maintain a good growth trend, while exports of general machinery and parts stabilized and recovered. In the first half of this year, automobile exports reached 2.826 million units, up 25.8% year on year, among which electric vehicle exports reached 1.098 million units, up 35.0% year on year, and automobile instrument exports increased 106.9%; Among electrical products, 507,000 industrial boilers were exported, up 94.1% year on year; Among the construction machinery, excavators were exported 109,000 units, up 5.6% year on year, forklifts 1.546 million units, up 9.8% year on year, among which electric forklifts were exported 354,000 units, up 18.0% year on year; Among the agricultural machinery, 33,000 large and medium-sized tractors were exported, up 10.8% year on year. The export volume of agricultural machinery products such as planting machinery, harvesting machinery, agricultural processing machinery and plant protection machinery all increased by more than 40%. Among heavy machinery, 129,000 cranes were exported, up 19.8% year on year; In addition, the export of cameras in the service consumption sector was 13.924 million units, up 4.2 times year on year, and the export of digital printing equipment was 51,000 units, up 83.8 percent year on year. The export volume of food processing machinery and packaging machinery also increased by more than 20 percent. Among general machinery and parts, the export volume of pumps and compressors increased by 14.7% and 26.4% respectively, while the export volume of bearings, fasteners, springs and seals increased by 8.3%, 16.4%, 25.9% and 14.2% respectively. In terms of imports, the import value of tractors, tractors, excavators, earth-shoveling and transportation machinery, cameras, compressors, generator sets, steam turbines, special purpose vehicles and other products increased significantly.

6. The business index fell and stabilized

The machinery industry prosperity index covers production, investment, foreign trade, economic benefits and other dimensions, comprehensively reflecting the operation of the machinery industry. Affected by the base of last year and other factors, the prosperity index of machinery industry in the first half of this year showed a downward trend and stabilized. In February, the prosperity index was 106.6, and then fell month by month, and the decline amplitude gradually decreased and tended to be stable, reaching 103.0 in June. The prosperity index of each month was in the prosperity range.

Highlights in industry development

In the first half of this year, the machinery industry adhered to innovation-led and green development, accelerated the cultivation of new drivers and advantages, and accelerated transformation and upgrading. A number of major technological equipment and innovation achievements emerged, and the resilience and safety of the industrial and supply chains continued to improve.

1. New-quality productivity leads industries to improve quality and efficiency

Strategic emerging industries are important carriers of new quality productivity. In recent years, the strategic emerging industries of machinery industry have developed rapidly and become an important pillar of the high-quality development of the industry. In the first half of this year, the total operating revenue of strategic emerging industries related to the machinery industry accounted for 81.8% of the machinery industry. Among them, the operating revenue of energy conservation, environmental protection and related industries, new energy vehicles and related industries, and high-end equipment manufacturing and related industries increased by 4.9%, 4.3% and 2.8% year-on-year respectively, and the total profit increased by 10.9%, 20.6% and 0.2% year-on-year respectively, all of which were higher than the overall level of the machinery industry.

2. Green and low-carbon development Accelerated industrial technology upgrading

The green development of machinery industry continues to make great efforts. The rapid development of clean energy equipment has become an important support for the construction of China's new energy system. The output of generating units in the first half of the year increased by 14.4% year-on-year, of which the output of wind turbines accounted for more than 40%; The output of photovoltaic cells increased by 17.8% year-on-year. In the first half of this year, new energy accounted for 85% of new power generation capacity in China; Among them, the new installed capacity of wind power was 25.8 GW, accounting for 16.9%, up 12.4% year on year; The new installed capacity of photovoltaic was 102.5 GW, accounting for 67.1%, up 30.7% year on year. Continued progress was made in the large-scale development of clean energy equipment, and supply capacity was significantly improved. The world's largest 20 MW floating wind turbine "Qihang" developed by CRRC has been released, becoming another breakthrough in the field of new energy equipment in China. The world's first 18 MW offshore wind turbine has been connected to the grid, setting a new world record for the largest single capacity of a grid-connected wind turbine. The world's first 18-20 MW wind storage network unit developed by Shanghai Electric has gone offline, effectively solving the current problems such as difficult wind power consumption, poor stability and low intelligence level. China's first and largest hydrogen production demonstration project of wind ionization network has been put into commercial operation, realizing "zero emission" in the whole process from wind to hydrogen. The trend of electrification of construction machinery is accelerating, promoting green and low-carbon development in the field of engineering construction. The sales volume of electric loaders in the first half of the year reached 5,114 units, exceeding the total of the past two years, accounting for 17.7% of the sales volume of loaders in the domestic market, including nearly 30% in June.

3. Breakthroughs were made in major equipment driven by innovation

The machinery industry kept up with the new round of scientific and technological revolution and the new trend of industrial transformation and development, actively promoted collaborative innovation, carried out joint research, and achieved a number of new breakthroughs in major technology and equipment. After years of joint research, the first prototype of 300 MW F-class heavy gas turbine independently developed by our country has been put off the final assembly line of Shanghai Electric Group, which plays a significant driving role in the progress of basic disciplines and industrial technology development of gas turbine in our country, and is of great significance to ensuring energy security and green development of our country. XCMG's 4,000-ton wheeled crane was released, breaking the world's largest wheeled crane record for the seventh time. The world's first 300 MW pressurized gas energy storage power station (set) -- Hubei Yingcheng 300 MW pressurized gas energy storage power station demonstration project has been connected to the grid for power generation, creating three world records for single unit power, energy storage scale and conversion efficiency. The world's largest single set of propane dehydrogenation project with an annual output of 1 million tons has been put into operation, creating 10 sets of equipment in the world and the first in China, realizing a number of equipment innovations such as reactor special valve, product gas compressor, 50 MW positive pressure explosion-proof motor, 169 MW air heating furnace and axial flow pump, and solving part of the "jammed" problem. Shengu Group has successfully developed the circulating gas maze compressor with the largest capacity in China, filling a number of domestic technology gaps, breaking the foreign monopoly, and ‌ solving the problem of long-term dependence on imports of this kind of products.

4. Improve the resilience and security of industrial and supply chains

In recent years, in the face of new changes and challenges, the machinery industry has focused on the key links and weaknesses of the industrial chain and supply chain, accelerated the independent research and development of key core technologies and equipment, and made great efforts to improve the resilience and safety level of the industrial chain and supply chain. In the first half of this year, a number of independent research and development achievements emerged. Fangchenggang Nuclear Power Station Unit 4 was put into operation, marking the completion of the "Hualong One" demonstration project of CGN, driving thousands of upstream and downstream nuclear power equipment enterprises to realize the independence of more than 400 key equipment, and having the ability of 100% domestic production of nuclear power equipment, which effectively promoted the resilience and strength of China's nuclear power industry chain. The first set of application in China, the out-of-reactor nuclear measurement system "Longmou ® nuclear", has been applied in Unit 3 of Hainan Changjiang Nuclear Power. The self-developed Linglong No.1 core measurement ® system has passed the acceptance inspection, which is of great strategic significance to China's nuclear electrical instrument and control system, core measurement system autonomy and supply chain security. The first CAP nuclear pneumatic stop check valve in China was successfully developed by Shanghai Nuclear Engineering Institute and Dalian Dagao Valve Company, which filled the domestic gap, broke the foreign monopoly, and realized the independence of design and localization of equipment. China Yitou has presided over the completion of four projects of "Key technology and equipment for online detection of continuously variable transmission System", "Key technology and Application of hydraulic-mechanical compound continuously variable transmission System of high-powered tractor", "Heavy automatic power shift technology and industrial application" and "research and application of key technology of horticultural electric lawn mower", all of which have filled the domestic gaps and reached the international advanced level. The technology is autonomous and controllable. The first domestic FB2 medium voltage rotor material for the 660 MW ultra-supercritical unit jointly developed by Shanghai Electric Equipment Group and Erzhong Equipment Company has been successfully developed, realizing the domestic production and import substitution of the FB2 medium voltage rotor, filling the domestic gap and marking a new breakthrough in the field of high-end materials in China. The 500 kW multi-gear construction machinery power shift transmission independently developed by Hangzhi Group has achieved a breakthrough, which is expected to effectively replace imported products. The water electrolysis hydrogen production equipment with the maximum single hydrogen production capacity of 3000 standard cubic meters/hour independently developed by CSSC Perui Hydrogen Energy has been put off the production line, breaking through a number of cutting-edge scientific problems and core key technologies such as high power, high electrical density, wide load and low power consumption. The first single-reactor megawatt proton exchange membrane electrolytic water hydrogen production device in China has been commercialized, which has solved the "bottleneck" problem of localization of key core materials and equipment such as proton exchange membrane and gas diffusion layer.

Half of the machinery industry trend forecast

Looking ahead to the second half of the year, the adverse impact of changes in the external environment is increasing. The world is in flux, with century-old changes accelerating, international political and military conflicts breaking out in many places, and the growth drivers of the world economy and international trade lacking. Developed economies demand more diversified supply chains, trade protectionism prevades, and more and more mechanical products become the target of international trade disputes. Competition between major powers in key areas has intensified. China still faces insufficient effective demand, diverging economic performance, many risks and hidden dangers in key areas, and difficulties in replacing old drivers of growth with new ones.

However, the basic trend of China's overall long-term recovery to a good economy has not changed, and the favorable factors supporting the stable operation and high-quality development of machinery industry continue to gather and increase. First, at a recent meeting of the Political Bureau of the CPC Central Committee to study and plan economic work for the second half of the year, it once again stressed the general principle of seeking progress while maintaining stability, stepping up macro-control, deepening innovation-driven development, tapping the potential of domestic demand, constantly enhancing new drivers and advantages, enhancing the vitality of business entities, stabilizing market expectations, and enhancing public confidence. The superposition of policy effects will continue to improve the development environment of machinery industry, release market potential, enhance development confidence, and provide a solid foundation and power for the stable development of the industry. ‌ Second, the Action Plan to Promote Large-scale equipment Renewal and Consumer Goods Trade-in and its supporting measures have been implemented, deploying four major actions: equipment renewal, consumer goods trade-in, recycling and standard improvement. Recently, several measures have been introduced to support large-scale equipment renewal and consumer goods trade-in, which will strongly promote investment and consumption. Release effective market demand for machinery industry. Third, the Third Plenary Session of the 20th CPC Central Committee proposed that "we should improve the system and mechanism for developing new quality productive forces in light of local conditions, and improve the system for promoting the deep integration of the real economy and the digital economy". It stressed that "we should develop new quality productive forces in light of local conditions, accelerate the cultivation of new drivers of foreign trade, and steadily promote green and low-carbon development". It provides a fundamental follow and development direction for the reform and development of the whole industrial economy, including the machinery industry. With the continuous refinement and implementation of relevant policies and measures, the machinery industry will burst out greater development power and stimulate greater development potential. Fourth, relying on the advantages of the super-large market, the machinery industry has deepened supply-side structural reform, adhered to innovation-driven and integrated development, and accelerated the cultivation of new drivers and advantages. The industrial foundation has been continuously consolidated, the resilience of the industrial chain and supply chain has been continuously improved, and the endogenous driving force for the development of the industry has been continuously strengthened.

In general, opportunities and challenges coexist in the development of machinery industry, but the opportunities outweigh the challenges, and the favorable conditions are stronger than the unfavorable factors. Comprehensive judgment, it is expected that the economic operation of the machinery industry in the second half of the year will continue the overall situation of steady progress, the annual growth rate of the main economic indicators is expected to be more than 5%, foreign trade will remain basically stable.