Component companies increase technological transformation industry will continue to develop in recent years

"Over the past few years, there has been no significant change in the steady development of China's machinery parts and components industry. Industry experts predict that the growth rate will remain around 20% for the next few years. Despite a slight decline in the first two months of this year due to macroeconomic control policies and inflationary pressures, the long-term trend of growth is expected to continue. Wu Hao, Chairman of the China Machinery General Parts & Components Industry Association, emphasized this during an interview with reporters. He believes that the mechanical transmission and component industry, as a fundamental part of the broader machinery sector, plays a key role in enhancing the overall level of host industries such as automotive, construction machinery, and more. The rapid development of these sectors has driven strong growth in the general parts and components industry. China currently leads the world in the production of gears, chains, sprockets, and powder metallurgy products, with some of its goods holding a notable share in international markets. As the global economic structure continues to shift, China has become a major manufacturing hub for labor- and material-intensive products. This has attracted foreign buyers and encouraged multinational companies to invest in local parts manufacturing, further boosting exports. In recent years, Chinese machinery parts have gained greater international exposure. For example, chain products are now sold in over 80 countries, including the U.S., Japan, Germany, and Canada. Export volumes have seen steady growth, reaching $574 million in 2002, $803 million in 2003, and $1.31 billion in 2004. Wu Hao notes that international procurement of mechanical components is becoming a growing trend, and with China’s competitive labor and raw material costs, it is well-positioned to capture a larger share of the global market. However, most of China’s exported parts are low-tech and low-value, which limits the amount of foreign exchange earned despite high volume. Improving product quality and technological content remains a top priority. At the same time, the import of mechanical parts has grown faster than exports. In 2004, for instance, gear exports reached $45.956 million, while imports hit $19.119 million. This is due to China’s reliance on imported high-tech components, such as automatic transmissions for cars, which are still largely imported. To stay competitive, many companies are investing heavily in technology upgrades, new equipment, and process improvements. The gear industry, for example, spends over $100 million annually on processing machinery. Smaller enterprises are also focusing on modernizing their facilities, while larger firms are making strategic investments in innovation and efficiency. Total investment in industrial technological upgrades exceeds 300 million yuan yearly. Additionally, the rise of private and joint-stock enterprises has reshaped the industry landscape. Over 85% of key companies in areas like springs, chains, and couplings are now privately or jointly owned, signaling a shift from state-owned dominance. With continued innovation and structural adjustments, China’s machinery parts and components industry is poised for sustained growth in the coming years." (Word count: 534)

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