Despite the overall machine tool industry has been mired in a slump, the export growth of machine tool products has quickened significantly. According to data, in the first 11 months of 2014, the export of machine tool goods reached USD 10.5 billion, an increase of 22.5 percent. Among them, the export of metal processing machine tool reached USD 3.06 billion, up 18.6 percent.

"In 2015, China's machine tool industry is expected to get out of the downward interval and the development situation of the whole industry is expected to be flat or slightly increased compared with that of last year." Chen Huiren, standing vice chairman and secretary general of China Machine Tool & Tool Builders' Association (CMTBA), said that as market demand shifts to higher level continuously, machine tool industry must speed up to move to the medium- and high-end market to get rid of the declining trend of development.

Impressive growth of machine tool exports

As of November 2014, new orders of main enterprises contacted with CMTBA fell 1.7 percent year-on-year, machine tool production fell 2.1 percent year-on-year, sales revenue fell 1.5 percent, and inventory increased 4.3 percent year-on-year. The percentage of loss-incurring machine tool enterprises has reached 36 percent.

In the adverse situation of performance downturn in machine tool industry as a whole, the growth of machine tool products export quickened, becoming a highlight of the machine tool industry development. According to data, in the first 11 months of 2014, the export of machine tool goods reached USD 10.5 billion, an increase of 22.5 percent. Among them, the export of metal processing machine tool reached USD 3.06 billion, up 18.6 percent.

"The key reason of dramatic growth of machine tool export is the objective demand for machine tool products in overseas markets." Chen Huiren analyzed that the manufacturing industry development in emerging economies has pushed up the demand for machine tool products.

For a long time, there has been considerable demand for China's machine tool products in overseas market, but as many machine tool enterprises were engaging in the robust domestic market, the market abroad was left behind. In recent couple of years, due to the slowdown of domestic market demand, machine tool enterprises began to put more energy to develop overseas market, thus drove the machine tool products export grows quickly.

It is noteworthy that accompany with the accelerated growth of the machine tool products export, the export product structure has been improved significantly as well. In the first 11 months of 2014, the proportion of metal processing machine tool products export in all machine tool products export reached 29 percent. Among them, the numerical control machine tool products which represent the medium- and high-end machine tool development trend accounted for 43 percent, an increase of 3.3 percentage points over the previous year.

Gradually deepening restructuring

Viewing from the differentiation inside the machine tool industry, despite lackluster development achievements of China's machine tool industry in 2014, the structure adjustment of the whole industry is gradually deepening. The trend of the industry shifting from medium- and low-end market to medium- and high-end market has further revealed.

In 2014, the production and sales volume of general non numerical control machine tools saw a significant decline, which only equals to 20 to 30 percent of that in peak period of 2011. It showed that the total demand in low-end machine tool products market has decreased obviously.

The rapid decline of heavy duty machine tool production and sales is another major change in machine tool industry in 2014. In 2010, China's heavy duty machine tool production and sales volume reached highest record since 2000, but then began to decline year by year. In 2014, the heavy duty machine tool production and sales volume was only 20 to 30 percent of that in 2010.

In addition, in the first 11 months of 2014, the new orders of metal cutting machine tools closely related to the fixed assets investment and heavy industry investment fell 4 percent year-on-year with production falling 2.3 percent year-on-year, sales falling 2 percent year-on-year, and inventories raising 4.6 percent year-on-year. The percentage of loss-incurring enterprises reached 41 percent. In contrast, the new orders of metal forming machine tools related to consumer products production and processing increased 8.6 percent year-on-year with production volume growing 1.5 percent year-on-year, sales growing 1.1 percent year-on-year, and inventories growing 2.3 percent year-on-year. The percentage of loss-incurring enterprises was only 13 percent.

"The changes of China's economic structure, especially the slowing down of investment growth and the contribution rise of consumption to GDP, have affected the internal structure change of the machine tool industry." Chen Huiren analyzed that since 2000, China's rapid development in fields like heavy industry, chemical industry and infrastructure construction has greatly lifted the market demand for heavy duty machine tools. With the development of China's economy enters the new normal, the investment growth in fields of heavy industry and chemical industry will slow down markedly, low level and repeated investment will be effectively curbed, thus will cause lower heavy duty machine tools demand.

Decline to be ended

The machine tool product import saw a restorative growth last year. From January to November 2014, the import of machine tool goods was USD 16.2 billion, up 8.8 percent year-on-year. Among them, the import of metal processing machine tools was USD 10 billion, up 5.5 percent, a share accounted for 35.3 percent in import products market, expanding by 3.6 percentage points over the whole year 2013.

"The further expansion of market share of imported machine tools suggests that foreign competitors adjust faster than domestic companies facing the same change of market conditions." Chen Huiren said that more important fact is that most of China's high-end machine tool products still rely on imports.

"Although many domestic high-end machines basically possess the characters required by functions of high-end products such as five-axis linkage, turning and milling compound, large size gantry, etc., they are often described as just similar in form rather than in performance. There are big differences compared with foreign counterparts in terms of accuracy, speed, static characteristic, dynamic characteristic and reliability," said Chen Huiren.

In 2015, China's macro economy will still face downward pressure. However, needs for medium- and high-end machine tool products will be released coupled with the accelerated development of new industry and new format and the continuous optimization of fixed asset investment structure. As a result, CMTBA believes that in 2015, China's machine tool industry is expected to be out of the downward interval, even show a small growth.

"Overall, the demand for machine tool products has shifted to medium- and high-end market with ordinary machine tool products occupying smaller and smaller market space. It is urgent for domestic machine tools to speed up its pace towards medium- and high-end market, in order to compete with imported high-end machine tool products to avoid being extruded," said Chen Huiren.