Distinguished guests, ladies and gentlemen,

Good afternoon everyone!

First of all , please allow me, on behalf of China Machine Tool and Tool Builders’ Association, to express our warm welcome and heartfelt thanks to you all present at today’s press conference.

I feel so nice to see so many old friends here.

Today we shall cover three parts, i.e., the current status of China’s economy and machine tool and tools industry, China’s machine tool demand and the preparation of CIMT 2011.

1. Current status of China’s economy and machine tool and tools industry

The effects of global financial crisis expanded over the past almost two years, governments of countries in the world, one after another, have adopted measures to answer it, but the seriousness of the impact on economy by the crisis and the complicacy of economic recovery are still beyond people’s anticipation. Under such complicated world economic environment, the Chinese government insisted on implementing the package plan to respond the global financial crisis to maintain China’s economy at smooth and faster growth. In 2009 China’s GDP grew by 8.7%. The machine tool and tools industry completed over 400 billion Yuan in total industrial output value, registering a year-on-year increase of 16.1%, of which metal cutting machine tools represented an increase of 3.5%, and forming machine tools with an increase of 14.2%. The consumption of metal-working machine tools in 2009 reached 19.79 billion US dollars, with a year-on-year increase of 0.5%.

China’s economy expanded by 11.2 % year-on-year in the first half of 2010, of which the industrial added value of the industrial enterprises above designated scale up by 17.6%. In January-June period of 2010, China’s machinery industry completed 6.59 trillion Yuan (approximately 969.1 billion US dollars) in total output value and 6.44 trillion Yuan (approximately 947 billion US dollars) in sales value respectively, registering a year-on-year increase of 36.94% and 37.94%. As for the growth rate, the automotive industry was 48.9%, construction machinery industry was 54.42%, machinery components industry was 37.14% and internal combustion engine industry was 37%. According to the statistics by CMTBA, in January-June period of 2010, China’s machine tool and tools industry completed 242.42 billion Yuan in total output value, registering a year-on-year increase of 41.4% and the product sales revenue reached 235.87 billion Yuan (34.7 billion US dollars), up by 42.0%, both recorded rapid increase. Metal cutting machine tools sector completed 57.21 billion Yuan (8.41 billion US dollars) in total output value, with an increase of 31.7% on year-on-year basis and forming machine tools sector 17.91 billion Yuan (2.7 billion US dollars) in total output value, up by 42.9%. In January-June period of 2010, imports of machine tool and tools were 6.68 billion US dollars, representing a year-on-year increase of 38.3%, of which metal-working machines accounted for 3.92 billion US dollars, with an increase of 24.2%, both exceeded the historical high in 2008. In January-June period of 2010, exports of machine tool and tools were 3.11 billion US dollars, registering a year-on-year increase of 45.7%, of which metal-working machines accounted for 810 million US dollars, up by 20.0%.

China endeavors for a long-term sustained and rapid economic growth. The Chinese government maintains the continuity and stability of macro–economic policy and values the policy’s pertinence and flexibility. We strive for stable and relatively fast economic development in case of the possible inflation. Meanwhile we readjust economic structure, push forward the reform and opening-up drive, and work harder to improve the quality and efficiency of economic growth while emphasize on energy conservation, emission reduction and independent innovation. 2-digit percentage increase of the investment by the machine tool and tools industry’s key clients will contribute to our industry’s steady growth.

2. China’s machine tool market demand

The year 2010 is an important transition year between the “Eleventh Five-Year (2006-2010)” and the “Twelfth Five-Year (2011-2015)”. Each industry takes relevant measures to readjust economic structure and to transform the economic development pattern. The industries relate closely with machine tool and tools industry like automotive, energy, shipbuilding, aviation and railway will carry out readjustment and reformation, which have a strong demand for more high-efficiency and applicable machines, and medium and high-end CNC machine tools will be the market mainstream.

a. Automotive industry

In 2009 the State Council released Auto Industry Restructuring and Revitalization Plan which drove rapid recovery of the domestic automobile market, and both production and sales of the industry exceeded 13 million units. In the first half of 2010, the production of China’s automotive industry hit over 8 million units, registering a year-on-year increase of 48.84%, and the sales reached over 9 million units, up by 47.67%, which confirmed China’s status as the world's biggest car market.

Automobile industry has become the pillar industry of economic development and industrial structure upgrading, and the fixed assets investment of which maintains a rapid growth. According to Auto Industry Restructuring and Revitalization Plan, the central government will invest 10 billion Yuan (1.5 billion US dollars) in the following 3 years, focusing on technical progress and reform of automobile manufacturing enterprises, which will promote about 100 to 200 billion Yuan (15-30 billion US dollars) investment from auto and parts & components enterprises. According to incomplete statistics, under-construction and newly completed projects will add another million engines and another million cars annual production capacity. If we refer to historical statistics, an estimated annual investment of 100 billion Yuan (15 billion US dollars) distributes 70% on equipment, of which machine tools accounts for 50%. That is to say, the automobile industry attributes an annual amount of 35 billion Yuan (5.2 billion US dollars) for the potential market of machine tools.

Machine tools for the production of auto parts and components like engines, transmission, steering, brake, drive train and suspension compose most of machine tools for the automobile industry.

b. Power industry

The development guideline for power industry during the Eleventh Five-Year Plan Period (2006-2010) aims “to optimize the development of thermal power; to develop hydropower orderly; to push forward the nuclear power actively; to develop the natural gas generation properly; to encourage the wind power generation.” Currently, China’s installed capacity of power plants in operation reaches 800 million kilowatts, ranking the second in the world. By the end of June 2010, there are 23 nuclear power generating units under construction in China, accounting for 40% of the world’s 57 units under construction. During the years of the Twelfth Five- Year, it will be the peak period for nuclear power and also be crucial for the sea wind power project. It is estimated that by the year of 2015 the total installed generating capacity will reach 1.26 billion kilowatts, ranking the first in the world.

To adapt to the economic growth trend, it is expected that the power industry needs to increase steadily. The Chinese government has promised to reduce the intensity of carbon dioxide emissions per unit of GDP in 2020 by 40 to 45 percent than in 2005, and the share of non-fossil energy consumption target is around 15%. The above objects require structural reform of energy with higher proportion of new-energy and renewable energy. China plans that by 2020 the nuclear power capacity will account for more than 5 percent of the total anticipated capacity, from 1 million kilowatts to 1.7 million kilowatts. And the invested capital will be far more than the scheduled 700 to 750 billion Yuan (102-110 billion US dollars). China also focuses on the wind power, aiming for an annual 10 million kilowatts capacity with six or seven wind farms, each shall equivalent to the installed capacity of the Three Gorges Power Station. The installed capacity of hydropower and wind power is expecting 300 million kilowatts by 2020. China will expand the scale of West-East electricity transmission project, optimize the deployment of the power resources, and promote the utilization efficiency of energy hydropower. As for the thermal power, we’ll adopt to eliminate backward production capacity, to encourage low energy consumption, high-capacity and high-efficiency environmentally friendly power generating units and to push forward the integration process of coal and electricity.

The structural adjustment of energy brought about fresh opportunity for machine tool and tools industry as well as the energy equipment industry.

With the growing investment on clean energy such as nuclear power and wind power, machining process of large-size casting and forging parts, circular-shape bodies (like casings of stream turbines), large-size complex parts, parts with large-size plain surfaces and semi-cylinder parts, blades and blade roots, pump bodies and pump valves, all of these machining have developed new requirements for the machine tools. Machine tool products like heavy-duty vertical lathes, large-size floor type milling and boring machines, super heavy-duty gantry milling and boring machines, five-axis simultaneous control machines, CNC broaching machines, vertical machining centers, horizontal machining centers, and CNC cutting tools and measuring instruments all have to satisfied with the up-dated technological requirements.

c. Shipbuilding industry

In January-June period of this year, the fulfilled, fulfilling and new orders (in terms of loading capacity) of China’s shipbuilding industry accounted for 41.1%, 46.2% and 37.7% respectively of the world’s total market share, i.e., the industry fulfilled building ships of 29.63 million dead weight tons, registering a year-on-year increase of 86.7%, the received new orders hit 23.78 million dead weight tons of ships, four-fold of that of the first half of 2009, and the holding order reached 184.27 million dead weight tons of ships, with a slight decline compared to the end of 2009. In the first half of 2010, the gross industrial output of the shipbuilding enterprises above designated scale reached 320.1 billion Yuan (approximately 47.1 billion US dollars), an increase of 25% on a year-on-year basis, of which shipbuilding accounted for 245 billion Yuan, up by 24.2%.

It is estimated that in the late half of this year the main economic index of shipbuilding industry will maintain a 2-digit increase. For the whole year of 2010 the industry’s completed building will add up to 55 million dead weight tons of ships and the new order volume is expected to reach 35 to 40 million dead weight tons of ships.

Rapid development of China’s shipbuilding industry has brought new opportunities for the associated equipments, like high power low speed diesel engines, crankshafts, and large-size ship propellers. The investments for these projects have been allocated and over the following few years there will be an increasing demand for large and medium-sized and general purpose CNC machine tools.

d. Aviation industry

In 2009 the sales revenue of aviation industry of China reached 191 billion Yuan, up by 14.4% on year-on-year basis. The following few years will be the golden development period for China’s aviation industry. According to China’s Large Civil Aircraft Program, in the following 3 to 5 years there will be 60 billion Yuan (8.83 billion US dollars) investment, of which 30 billion Yuan for prior research and development and the other half for expanding of manufacturing capacity. In total about 200 billion Yuan (30 billion US dollars) will be invested to the industry, equal to the total investment of the Three Gorges Project.

Airplane is the most sophisticated and latest technology contained human-made aircraft. A large airplane consists of 3 to 5 million pieces of parts and sophisticated components. The aviation industry will need more high-tech and high-performance equipment.

Along with the implementation of the Large Civil Aircraft Program, there are new requirements for not only the associated components but also the application of new materials and high tech composite materials. Currently aviation industry’s need for machine tools almost covers all the latest new technologies of the modern machine tools, including varied special purpose machines, and large-size and high-precision ones. The key machine tools and high-end machine tools for aviation industry are in great demand.

e. Railway construction

In accordance with the Eleventh Five-Year Plan for transport industry, by the end of 2010, China’s railway operating mileage will reach over 90,000 km. However by the end of 2008 the length of national railways has reached the amount of 80,000 km (an investment of about 350 billion Yuan, approximately 51.5 billion US dollars). Accordingly the latest railway construction investment plan issued by the Ministry of Railways aims to invest 700 billion Yuan in 2010 for the total operating mileage of 92,000 km, to invest 750 billion Yuan in 2011 for 100,000 km operating mileage, and to invest 700 billion Yuan to reach 110,000 km operating mileage in 2012.

High speed, speed-up, large capacity, high power traction and electrification are the key points of the railway construction. Along with the expanding construction and investment scale, railway equipments especially those relating closely with machine tools industry are in greater need.

The Chinese government pays attention to the economic development mode transforming and economic structures readjustment. Hence there will be more specific requirements for machine tools to be required by textile machinery, mining machinery, construction machinery and agricultural machinery industries. On the whole medium and high-end CNC machine tools are the mainstream of the market demand, high-end CNC heavy-duty and super heavy-duty machine tools are of large potential demand and there is a larger market for high-efficiency special purpose CNC machine tools.

3. The preparation of CIMT 2011

The 12th China International Machine Tool Show ( CIMT, a biennial show) sponsored by China Machine Tool and Tool Builders’ Association and co-organized by CMTBA and China International Exhibition Center Group Corporation will be held in April 11-16, 2011 at the China International Exhibition Center (New Venue) in Beijing.

CIMT 2009 attracted more than 1,200 exhibitors from 28 countries and regions, 264,000 trade visitors and 246 end-user delegations. The success of CIMT 2009 had defied the widespread financial crisis.

CIMT 2011 is to be held in the post-financial crisis era. Show activities like international forums, technical seminars, user symposiums and so on will be held during the show.

CIMT 2011 will cover 120,000 square meters with an additional hall compared to the last show, and the foreign and domestic exhibitors will share 50% of the total show space each. Currently both national pavilions and individual exhibitors respond positively. By the end of August this year, the total space that the exhibitors applied for has already exceeded the maximum space available in the exhibition center. It is estimate that only around 60% of the demanded show space may be satisfied. We are seeking the exhibitors’ understanding and cooperation to exhibit the state-of-the-art machine tools and to make the best use of the available space. CIMT 2011 will be the comprehensive showcase for the latest new technology, the most functional product and the best service.

As stated by Beijing’s traffic management authority, by the end of 2010, Metro Line 15, which runs through the downtown area to CIEC (New Venue), will start trial operation. And by the time of opening of CIMT2011, this subway line will have been put into operation, which will benefit the exhibitors and visitors a lot.

As the sponsor of CIMT 2011, China Machine Tool & Tool Builders’ Association will endeavor to create a sound trading environment and build a platform of cooperation and exchange for machine tool associations and counterparts from all over the world, trade specialists and media friends. CMTBA will also work hard to create new business opportunities for participants and play its role of a bridge.

China Machine Tool and Tool Builders’ Association is your trustworthy partner. We appreciate your consistent support for CCMT and mostly CIMT. We’re looking forward to the successful and promising future with long-term cooperation.

The holding of CIMT 2011 will make the China International Exhibition Center (New Venue) in Beijing a focal point of the world’s machine tool industry and a venue for the gathering of elites of the industry. We warmly welcome friends from all over the world!

I’d like to take this opportunity to wish IMTS 2010 a complete success!

And wish all of you all the best!

Thank you.