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Machinery industry to stay on healthy growth track

By ZHONG NAN | CHINA DAILY | Updated: 2023-02-16 07:19
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Employees work on an auto assembly line in Changshu, Jiangsu province, on Feb 2. [PHOTO by HUA XUEGEN/FOR CHINA DAILY]

Optimized COVID measures, green push in nation to brighten 2023 performance

Both the sales revenue and profit of China's machinery industry are expected to grow 5 percent year-on-year in 2023, while its exports will maintain steady development momentum, market insiders said on Wednesday.

Although confronting uncertainties caused by high prices of materials such as nickel, lithium and graphite, and geopolitical tensions, the foreign trade of China's machinery industry — a key economic indicator — rose 3 percent on a yearly basis to $1.07 trillion in 2022, maintaining $1 trillion of foreign trade value for the second consecutive year, said the Beijing-based China Machinery Industry Federation (CMIF) during a news conference.

In the meantime, the country saw its exports amount to $740 billion and achieve a trade surplus of $410.4 billion in machinery manufacturing, from numerical control machines and offshore wind turbines to excavators and trains.

Driven by fast-growing business sectors, including new energy vehicles, electrical appliances, petrochemical equipment and construction machinery, China is likely to see stable growth in the machinery industry this year, said Luo Junjie, CMIF's executive vice-president.

For instance, the country exported 3.11 million vehicles in 2022, up 54.4 percent year-on-year, ranking China second only to Japan. Among them, a total of 679,000 new energy vehicles, which consist of electric cars and plug-in hybrids, were shipped overseas from China last year, up 120 percent year-on-year, said the China Association of Automobile Manufacturers (CAAM).

A total of 301,000 vehicles were exported in January, jumping 30.1 percent from the same period last year. Meanwhile, NEV exports jumped 48.2 percent year-on-year to 83,000 units, according to the CAAM.

Given China's swift policy shift in COVID-19 management and efforts to pursue its dual-carbon goals, Chen Bin, deputy director of CMIF's expert committee, predicted that the electrical sector will see notable growth this year, as the construction pace of wind, photovoltaic and nuclear power and other clean energy generation projects will accelerate both at home and in a number of overseas markets this year.

"In addition to many big-ticket energy storage projects, more investment will flow into the development of digital, high-end new transmission and distribution systems in China," said Chen, adding the country's optimized COVID-19 response and further opening-up measures will push manufacturers in the machinery industry to travel abroad to seize more orders and make new business connections this year, especially in the area of "new infrastructure".

Unlike traditional infrastructure, such as railways, roads and water conservancy, new infrastructure refers to critical facilities based on information technologies like 5G, AI, the industrial internet and the internet of things. IoT describes networks of devices that can connect and exchange data.

"Moreover, expanding domestic demand is fairly critical to bolstering China's economy amid continuously softening overseas demand, with infrastructure investment to continue to drive stable economic growth," he noted.

Chen Shihua, deputy secretary-general of Beijing-based CAAM, warned that domestic carmakers will confront stiff competition from foreign companies since the exports of German and Japanese automakers grew fast in the fourth quarter of 2022.

Together with Tesla's price reduction moves, high lithium carbonate prices and growing demand for high-end chips, Chinese carmakers need to take effective measures to lower operational costs and speed up innovation activities this year, he said, noting that NEV sales may fall during the first two months of this year compared with the same period last year because of the withdrawal of subsidies that were first introduced in 2009.

"But sales will maintain rapid growth in 2023, as both the macroeconomy and consumer confidence continue to recover," said Chen with the CAAM.

Benefiting from technological advances and product structure upgrading, China's machinery industry saw sales revenue surge 9.6 percent year-on-year to 28.9 trillion yuan ($4.22 trillion) in 2022, while the industry's total profit soared 12.1 percent on a yearly basis to 1.8 trillion yuan, data from the CMIF showed.

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