XCMG excavator parts editor believes that as important components of China's manufacturing industry, whether the steel and machinery industries will be greatly affected by the escalating trade conflicts between China and the United States has become a focus of attention from all walks of life. XCMG excavator parts manufacturer has noticed that in the latest 200 billion yuan tariff list targeting Chinese products, a series of electromechanical products and precious metal products such as steel are prominently listed.
Mechanical profession going global
According to the data analysis of Sino US transactions, the transaction volume of mechanical products between China and the United States in 2017 was 109 billion US dollars, accounting for 9.4% of the total transaction volume with the United States. During this period, China exported 72.4 billion US dollars to the United States, accounting for 17.84% of the total export transactions; Imports from the United States amounted to $36.6 billion, accounting for 6.97% of the total import transactions. The trade surplus with the United States is 35.8 billion US dollars.
In detail, in 2017, China exported $72.4 billion worth of mechanical products to the United States. Electrical appliances accounted for 26%, car parts accounted for 18%, petrochemical general equipment accounted for 17%, instruments and meters accounted for 9%, mechanical basic components and civilized office equipment accounted for 6%, construction machinery accounted for 3.5%, machine tools accounted for 2.6%, internal combustion engines accounted for 2.8%, agricultural machinery accounted for 2.2%, and heavy mining machinery accounted for 1.8%. In this $200 billion tariff list, a suitable portion involves mechanical products.
In response to the rapidly escalating trade conflict between China and the United States since the beginning of this year, Wang Ruixiang, President of the China Machinery Industry Federation, analyzed the impact of the incident on China's machinery industry at the 2018 National Machinery Industry Provincial (Regional, Municipal) Vocational Association Work Symposium. He stated that industry experts generally believe that the trade conflict between China and the United States is bound to have an impact on the machinery industry, but the impact is controllable. This impact may be reflected in the decline of transactions with the United States, the relocation of some foreign-funded enterprises, the reduction of job positions, and the suspension of high-tech cooperation channels.
After sorting out the parts manufacturers of XCMG excavators, it was found that the overseas layout of Chinese machinery enterprises, the proportion of overseas operating income has been increasing year by year, and some equipment exports account for as much as 60%. In the development blueprints of various companies in 2018 and even longer, expanding overseas markets has become a key point and consensus for all enterprises.
According to detailed data, as of the first half of 2017, China's machinery and transportation equipment increased by 14.3% year-on-year. During the same period, Sany Heavy Industry's overseas revenue reached 5.799 billion yuan, accounting for 30.19% of its overseas revenue. LiuGong's overseas revenue accounted for 20.59%, XCMG Machinery's overseas revenue accounted for 15.2%, and Zoomlion's overseas revenue accounted for 10.13%. However, this is all reflected in the relatively low sales proportion in US markets.
The US government has proposed a policy of vigorously carrying out infrastructure projects, providing a considerable market for Chinese construction machinery enterprises that are gradually penetrating the American market. However, the Trump administration's tough stance in maintaining local construction machinery manufacturers has resulted in a smooth sales of construction machinery manufacturers, including Chinese enterprises, in the United States. Therefore, the sales volume of Chinese construction machinery enterprises in the United States does not account for a high share of the total operating income. "Relevant personnel from the China Machinery Industry Federation told XCMG excavator parts manufacturer.
XCMG excavator parts manufacturers have noticed that companies such as Sany Heavy Industry, Haomai Technology, Harbin Electric, and Liugong have all established overseas production bases in recent years. In 2017, Harbin Electric Power signed contracts for four 112.5 MW mixed flow water turbine generators in Subaiti, Guinea and two 115 MW air-cooled steam turbine generators in Bengkulu, Indonesia. In 2018, we successively won the EPC renovation projects of Ilia and Zhubia in Brazil, the main equipment contracts for two 104.65 MW impulse hydro generators in San Gabriel III, Peru, and the SK project in Pakistan.
In fact, the harvest of overseas operations of China's mechanical and electrical enterprises is more from countries and regions along the the Belt and Road. Now, the overseas strategy of China's construction machinery manufacturers is highly consistent with that of China's the Belt and Road, with some enterprises meeting up to 80%. The substantial increase in sales in countries along the the Belt and Road contributes to the rapid increase in revenue of China's construction machinery manufacturers.
Xiang Wenbo, the director of Sany Group and president of Sany Heavy Industry, said, "The construction of the 'the Belt and Road' is the 'spring' of construction machinery enterprises. Sany has been deployed in many relevant countries and regions, and now 70% -80% of the sales come from this. In 2017, XCMG machinery export revenue increased significantly, with the main export concentrated in the the Belt and Road region, accounting for about 70% of the company's export volume.
The steel industry has immunity
XCMG excavator parts manufacturer found that since 1996, the United States has been proposing increasingly frequent transaction inquiries for China's steel products. The United States is the country with the most anti-dumping and anti subsidy suggestions for China's steel products. According to data from the US Department of Commerce, as of February 15, 2018, there were 169 anti-dumping and anti subsidy taxes on steel products in the United States, of which 29 were against China. The United States proposes various forms of tariffs to restrict the entry of Chinese steel products into the United States, including 201, 421, 337, 232, and other guarantee measures or special guarantee inquiries.
According to monitoring data from the Lange Steel Research Center, in 2006, China exported 5.4 million tons of steel products to the United States, accounting for 12.56% of China's total steel exports that year; Through years of transaction inquiries, China's steel industry has been subjected to varying degrees of sanctions by the United States, from steel products to steel products, resulting in a significant reduction in China's exports of steel products to the United States. By 2017, China had exported 1.18 million tons of steel products to the United States, accounting for only 1.57% of China's total steel exports. The proportion of steel exports to the United States had decreased by nearly 11 percentage points compared to 2006, while the volume of steel exports to the United States had decreased by 78.15% compared to 2006; And among China's steel export ranking countries, the United States has also dropped from second place in 2006 to 18th place in 2017.
Wang Guoqing, director of the Lange Steel Research Center, told XCMG excavator parts manufacturer that with the continuous tightening of trading policies in the United States, the entire steel industry in China is gradually digesting the impact of this policy tightening. According to the current visit, it has not had a significant impact on steel export enterprises.
The family members of XCMG excavator parts factory are one of the few professions that can compete with the world's leading level. The relative advantage in technology will be powerful for China's steel exports in the regions along the route, achieving a multi-level win-win situation between countries.
At present, the share of China's steel exports to the "the Belt and Road" countries in China's total steel exports has increased year by year, accounting for half of China's exports. During this period, Vietnam is the second largest steel export destination in China, and it also ranks first in China's steel export volume of countries along the "the Belt and Road". XCMG excavator parts manufacturer stated through Wang Guoqing that Vietnam, as a developing country, has had a huge demand for steel in recent years due to its high level of infrastructure and urban construction needs.
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Contact: Mr. Chen
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