On August 6, 2021, the China Machinery Industry Federation held an information conference on the economic operation of the machinery industry in the first half of 2021 in Beijing. At the meeting, Chen Bin, Executive Vice President of China Machinery Industry Federation, released the economic operation of the machinery industry in the first half of 2021.

The pressure of stable operation gradually shows that the confidence of growth throughout the year remains

——Economic operation of machinery industry in the first half of 2021

2021 is the first year of the "Fourteenth Five Year Plan", and the national economy is generally in a stable recovery and sustainable development trend. Thanks to the effective control of the domestic epidemic situation and the continuous release of the macro policy effect, the market demand of the machinery industry gradually recovered in the first half of the year, the operating environment continued to improve, the foreign trade export situation was better than expected, the confidence of enterprises in development continued to increase, and the trend of industry production to remain stable became clearer. However, the sharp rise in the price of raw materials has begun to have an impact on the efficiency of machinery enterprises. The continuous evolution of overseas epidemics has aggravated the complexity of the foreign trade situation. At the same time, the increase in the comparison base has put pressure on the growth of indicators in the second half of this year. The task of stable operation and high-quality development of the machinery industry throughout the year remains arduous.

1、 Operation overview of machinery industry in the first half of the year

Influenced by the low base factor of the previous year, the main economic indicators of the machinery industry showed a rapid growth at the beginning of the year, and since then, the growth rate has declined month by month. For half a year, the year-on-year growth rate of major economic indicators of the machinery industry is still at a high level

（1） High regression of growth rate of added value

According to the data of the National Bureau of Statistics, the added value of the machinery industry in the first half of the year increased by 22.3% year on year, 6.4 and 5.2 percentage points higher than that of the national industry and manufacturing industry in the same period, and 21.2 percentage points lower than that of the first quarter; The average growth rate in the two years was 9.8%. The machinery industry mainly involves five major sectors of the national economy. The added value of general equipment manufacturing, special equipment manufacturing, automobile manufacturing, electrical machinery and equipment manufacturing, and instrument and meter manufacturing in the first half of the year increased by 24.3%, 20.1%, 21.8%, 29.4%, and 19.2% respectively year on year, and the average growth rate in both years exceeded 8%.

（2） Stable production

In the first half of this year, the production of the machinery industry continued the upward trend of the previous year. The cumulative output of 121 major products monitored remained above 94% year-on-year. At the end of June, the cumulative output of 114 products increased, accounting for 94.2%; There were 7 kinds of products whose output decreased year on year, accounting for 5.8%. From the data of that month, the proportion of products whose output increased in May and June remained at about two-thirds.

The main products of the machinery industry in the first half of the year showed the following characteristics: First, the production of packaging machinery was vigorous, and the output of special packaging equipment, metal containers and other products doubled. Second, after years of rapid growth, the growth rate of production and sales of construction machinery products has gradually returned, and the growth rate of excavators, loaders, special cement equipment, forklifts and other products has slowed to about 30%. Third, the production of agricultural machinery products became more stable and the growth rate slowed down. The output of large, medium and small tractors increased by 57.4%, 18.5% and 27.6% respectively. Fourth, the machine tool products showed a recovery growth. The output of metal cutting machine tools, machine tool numerical control devices, metal cutting tools and other products grew by more than 30%, and industrial robots grew by nearly 70%. Fifthly, the production and sales of automobiles were 12.569 million and 12.891 million, respectively, with a year-on-year growth of 24.2% and 25.6%. Affected by the shortage of chips, the production and sales of automobiles fell in May and June on a year-on-year basis, hindering the momentum of restorative growth. Sixth, the production of some power transmission and transformation equipment was weak, and the output of transformers, power capacitors and other products decreased year on year

（3） High capacity utilization

Driven by stable production, the utilization level of production capacity of major industries in the machinery industry in the first half of the year was at a high level, significantly higher than the same period last year. The capacity utilization rates of general equipment manufacturing, special equipment manufacturing, automobile manufacturing and electrical machinery and equipment manufacturing were 80.9%, 81.3%, 76.2% and 81.4% respectively. Except for automobile manufacturing, the capacity utilization rates of other industries were higher than the national average level of industrial capacity utilization in the same period. Compared with the same period last year, the capacity utilization of the above four industries increased by 6.9, 6.6, 9.4 and 7.7 percentage points respectively

（4） The growth rate of benefit indicators is still at a high level

According to the data of the National Bureau of Statistics, in the first half of the year, the machinery industry achieved a cumulative operating income of 12.49 trillion yuan, up 30.85% year on year; The total profit was 801.32 billion yuan, up 41.99% year on year; The growth rate of both indicators is at a high level. In the first half of the year, the operating income profit margin of the machinery industry was 6.42%, 0.51 percentage points higher than the same period of the previous year. Compared with the national industry, the growth rate of operating income of the machinery industry was 2.97 percentage points higher, the growth rate of total profits was 24.95 percentage points lower, and the profit margin of operating income was 0.69 percentage points lower. With the recovery of the comparison base of the previous year, the growth rate of the benefit indicators of the machinery industry continued to slow down. Compared with the first quarter, the growth rate of operating income and total profits fell by 27.8 and 196.18 percentage points respectively.

（5） Better development in all aspects by industry

In the first half of the year, 14 sub industries of the machinery industry showed a positive trend in all aspects, with operating revenue growing by more than 10% year on year, including robot and intelligent manufacturing, other civil machinery, electrical appliances, machine tools and tools industries growing by more than 30%; The total profits have all increased by more than 10%, among which the growth rate of other civil machinery industries has exceeded 90%, the growth rate of machine tool industry has exceeded 85%, ranking the top two, and the profit growth rate of electrical appliances, robots and intelligent manufacturing and automobile industries has also exceeded 40%.

（6） Fixed asset investment is in recovery period

According to the data of the National Bureau of Statistics, in the first half of the year, the fixed asset investment in general equipment manufacturing, special equipment manufacturing, electrical machinery and equipment manufacturing, and instrument and meter manufacturing, which are the main sectors of the national economy involved in the machinery industry, increased by 10.6%, 28.5%, 24.2%, and 25.1% year on year respectively, while the fixed asset investment in automobile manufacturing decreased by 2.3% year on year. Compared with 2019, investment in general equipment manufacturing and automobile manufacturing remained negative, with a decrease of 9.3% and 22.7% respectively; Investment in special equipment manufacturing, electrical machinery and equipment manufacturing and instrument and meter manufacturing increased by 12.2%, 3% and 24.5% respectively. In general, the investment in fixed assets in the machinery industry is still weak, and the lack of funds is the main factor restricting the investment of enterprises in the near future

2、 Highlights in the first half of the year

（1） Innovation driven, fighting new industries to support industry development

In the first half of the year, the relevant industries of strategic emerging industries in the machinery industry achieved an accumulated operating income of 9.49 trillion yuan, an increase of 32.07% year on year, 1.22 percentage points higher than the average level of the machinery industry; The total profit was 596.841 billion yuan, up 45.07% year on year, 3.08 percentage points higher than the average level of the machinery industry. In terms of proportion, in the first half of the year, the proportion of strategic emerging industries in the machinery industry in operating income was 75.98%, 1.58 percentage points higher than that in the same period of last year; The proportion of total profits was 74.48%, 0.88 percentage points higher than that of the same period last year. Strategic emerging industries still lead and drive the recovery and development of the machinery industry.

（2） Seize the opportunity and import and export trade exceeded expectations

Thanks to the effective prevention and control of domestic epidemics and the rapid recovery of production order, machinery enterprises took the initiative to seize the opportunity in the international market. In the first half of the year, China's machinery industry achieved a total import and export volume of 491.72 billion US dollars, up 36% year on year. Among them, the total export volume was USD 311.66 billion, with a year-on-year growth of 40.3%, and the total import volume was USD 1800.6 billion, with a year-on-year growth of 29.2%, achieving a trade surplus of USD 131.6 billion, both hitting a new historical high in the same period. In terms of specific products, the export of traditional competitive products in the machinery industry, such as auto parts and low-voltage electrical equipment, has increased significantly. In the first half of the year, the export amount of auto parts was 23.7 billion US dollars, up 57.35% year on year; The export value of low-voltage switches and control devices was 14.936 billion US dollars, up 39.53%; The export value of batteries was 13.113 billion US dollars, up 71.9%. In addition, the export of finished automobiles was outstanding. In the first half of the year, the export volume exceeded 880000 units, with a year-on-year growth of 108.49%. Some enterprises have taken various ways to actively explore the international market. For example, the new smart mining truck developed by Shanhe Intelligent has successfully opened the Indonesian market, driving the total export of intelligent equipment of enterprises to increase by more than 90%; Zoomlion Heavy Industry Co., Ltd. provides users with "one-stop" services such as product selection, transportation, customs clearance, third-party inspection, and operation training. In the first half of the year, the market share of tower cranes in the Philippines has soared.

（3） "Double carbon" goal leads industrial transformation

Guided by the goal of "reaching the peak of carbon and neutralizing carbon", the machinery industry has actively adjusted to help reform energy consumption. In the first half of the year, the production and sales of new energy vehicles in China reached 1.215 million and 1.201 million respectively, with a year-on-year growth of two times; The cumulative sales volume has been equal to that of 2019; The proportion of new energy vehicle sales increased from 5.4% at the beginning of this year to 9.4% in the half year. The cumulative production of power generation equipment is 61.7233 million kilowatts, of which the combined production of clean energy hydropower and wind turbines is 33.6706 million kilowatts, accounting for 54.55%, more than half of the total, an increase of 5.21 percentage points over the previous year. At the same time, mechanical enterprises are actively exploring opportunities in the "dual carbon" new market to deepen the integration and development with high energy carrying industries. For example, Shanghai Electric Group and Benxi Iron and Steel Group launched all-round strategic cooperation to help build a green, smart and clean steel plant

（4） Independent innovation and new progress in major equipment development

The machinery industry adheres to the development concept of independent innovation, and new progress has been made in the research and development of major equipment. The Baishetan Hydropower Station on Jinsha River, a hydropower project with large scale and high technical difficulty in the world, which Harbin Electric Group and Dongfang Electric Group are participating in, has been put into operation safely and on time for the first million kilowatt hydro generator units, which has achieved a major breakthrough in high-end equipment manufacturing in China. The first F-class 50MW heavy gas turbine independently developed by Dongfang Electric successfully achieved stable operation at full load, marking a major breakthrough in China's independent gas turbine industry. The first set of domestic 30MW gas driven compressor unit for long-distance natural gas transmission pipeline jointly developed by the 703 Research Institute of China Shipbuilding Group, West East Gas Transmission Branch of National Petroleum and Natural Gas Pipeline Network Group, Harbin Turbine Works of Harbin Electric Power Group, Shenyang Blower Group and other units passed the acceptance, which is another significant progress in the field of energy equipment in China.

（5） Digital intelligence gives new impetus to development

Thanks to the enabling of digital and intelligent technologies, the machinery industry has continuously improved its ability to provide equipment for all sectors of the national economy, and has also gained new momentum for its own development. The unmanned cluster road machinery of XCMG has been successfully applied to the large area asphalt paving operation of S21 Awu Expressway, the first desert expressway in Xinjiang, to overcome extreme operating conditions and improve the speed of road construction. The intelligent decontamination robot developed by Xinsong Company has been successfully applied in Gezhouba Hydropower Station, overturning the traditional manual semi mechanized floating mode. The unmanned wheat harvester produced by Weichai Lovol Heavy Industry and the unmanned tractor form an unmanned harvesting system, which realizes the coordinated operation of wheat harvesting and field transportation through mobile phone control, and improves the harvesting efficiency. The first medium volume digital rail line near the new port area Line 1 in China participated by Shanghai Electric Group has been put into operation. The line uses digital magnetic labels as virtual tracks, rubber tyred trams as vehicle carriers, combined with automatic driving technology, and is characterized by small investment, short construction period, high flexibility, large transport capacity, and high reliability.

（6） Integration of production and education to help personnel training

In order to improve the shortage of technical talents and high-end talents facing the industry, industry associations and machinery enterprises actively organize and participate in the integration of industry and education, and promote the deep integration of education chain, talent chain and industry chain. Since this year, the "Fourteenth Five Year Plan" for Personnel Training in the Mechanical Industry has been promulgated, a training class for * * * urgently needed talents has been held, a technical skills competition in the mechanical industry has been jointly held with government departments, a scientific and technological award evaluation for front-line workers in the mechanical industry has been organized, and a vocational skill grade evaluation has been carried out. At present, the industry has established more than 40 industry education integration and school enterprise cooperation groups, which have played a positive role in promoting talent training.

3、 Difficulties and problems in the operation of the industry

（1） The price of raw materials remains high, and the pressure on industry costs rises

In the first half of this year, the prices of domestic steel, non-ferrous metals and other bulk commodities continued to rise sharply. According to the data of the National Bureau of Statistics, the purchasing price index of industrial producers in June increased by 13.1% year on year, including 27.7% for ferrous materials, 26.8% for nonferrous materials and 26.8% for electric wires, which led to a general increase in the purchase price of raw materials for the machinery industry and increased cost pressure on enterprises. According to the special survey of machinery industry related enterprises, 95% of the surveyed enterprises reported that the purchase price of raw materials had risen since this year, and 91% of the surveyed enterprises reported that the purchase price of spare parts had risen since this year.

（2） The product price is at a low level, and the benefit index has declined

According to the data of the National Bureau of Statistics, under the background of continuous, substantial and rapid growth of raw materials, the factory price increase of mechanical industrial products is weak and relatively lagging behind. In the first three months of this year, the ex factory price index of the machinery industry was 99.2, 99.1 and 99.5 respectively, still in a year-on-year decline. It was not until April that the ex factory price index of the machinery industry turned positive from negative to positive year on year. The growth rate in June rose to 1.1%, but it was far lower than the growth rate of raw material purchase price index and ex factory price index of the raw material industry of the same period, which exceeded 26%.

The difference between the purchase price of raw materials and the sales price of products has affected the profits of the machinery industry. Single month data shows that the growth rate of the total profit of the machinery industry fell sharply, 94.1% in March, 3.7% in April, 1.99% in May, and 9.84% YoY from positive to negative in June

（3） Difficulty in collecting accounts and low turnover rate of industry funds

According to the data of the National Bureau of Statistics, the total accounts receivable of the machinery industry at the end of June was 5.52 trillion yuan, up 9.72% year on year, accounting for nearly one-third of the total industrial accounts receivable nationwide. The special survey results show that in the first half of the year, 60% of the surveyed enterprises' accounts receivable increased year on year, and 24% of the enterprises increased by more than 10%; More than 60% of the enterprises surveyed had a year-on-year growth in notes receivable, and 23% had a growth rate of more than 10%. Enterprises reported that the number of customers using bills for settlement increased significantly, resulting in increased pressure on their own capital turnover. At the end of June, the turnover rate of current assets of the machinery industry was 1.45 times, 0.36 times lower than that of the national industry in the same period.

4、 Prediction of annual operation trend of machinery industry

In the first half of the year, China's achievements in coordinating epidemic prevention and control and economic and social development have been consolidated and expanded, and the machinery industry has also shown a steady development trend. Looking forward to the second half of the year, factors favorable to the operation and development of the machinery industry are accumulating and releasing. First, the improvement of the economic environment led to the expansion of market demand. Under the background of stable and sound national economic operation, the willingness of users of the machinery industry to transform, upgrade and expand production has increased significantly. In the first half of the year, the investment in fixed assets of the manufacturing industry increased by 19.2%, which is better than the stable operation of the production end of the machinery industry. Second, a stable policy environment and precise regulatory measures boosted enterprise confidence. The favorable effects of the support policies issued by the state in the early period continued to show. In the first half of the year, a number of precise control policies focused on small and medium-sized enterprises and enterprises in difficulty, increased the efforts of enterprise rescue, built policy synergy, and boosted enterprise development confidence. Third, the development of digital intelligence has accelerated under the background of normalization of epidemic prevention and control. The global epidemic prevention and control situation is complex and changeable, which profoundly affects the development trend of industrial technology. The demand for digital transformation and intelligent manufacturing in the machinery industry user industry has surged. The promotion of external demand is combined with the endogenous power of the transformation and development of the machinery industry to promote the machinery industry to practice the high-quality development strategy.

However, it should be noted that in the second half of the year, the pressure on the machinery industry to achieve stable operation has increased. Unstable and uncertain factors in the recent operation of the industry need close attention. First, the production of some products showed signs of high decline. In June, the output of excavators was 27000, a year-on-year decrease of 25.65%; 1.943 million cars were produced, down 16.5% year on year; The output of large and medium-sized tractors, agricultural products processing machinery, pollution prevention equipment and other products in the same month also declined year on year. Second, there is uncertainty in the foreign trade market. According to the special survey of contact enterprises, there is a great pressure to continue orders in overseas markets. Forty percent of enterprises' orders in hand can meet the production requirements in the third quarter, and twenty percent of enterprises' orders in hand can meet the production requirements in the whole year. In addition, the impact of epidemic fluctuation on project performance and finished product delivery, as well as the impact of rising exchange rate, the foreign trade export situation of machinery industry in the second half of the year is uncertain. Third, the price of raw materials is still high. Although the rapid rising trend of bulk commodity prices such as steel and nonferrous metals has been restrained, the prices are still fluctuating at a high level, and the impact on the efficiency of the machinery industry is continuing. In the second half of the year, machinery enterprises may face the capital pressure caused by the high cost of raw materials and the difficulty in collecting accounts. In addition, the monthly increase in the year-on-year base also exerted significant pressure on the growth of major indicators in the second half of the year.

To sum up, in 2021, the economic operation of the machinery industry will generally show a trend of high in the first half and low in the second half. The growth rate of the main economic indicators in the second half of the year will be significantly slower than that in the first half of the year, but the confidence of the whole machinery industry to achieve the annual goals remains. It is estimated that the growth rate of added value, operating revenue and total profit of the machinery industry will reach about 6% in the whole year, and foreign trade import and export is expected to achieve a new breakthrough.

This year is the starting year of the "Fourteenth Five Year Plan". In the face of the continuous evolution of the global epidemic and the complex and severe internal and external economic environment, the whole machinery industry will be firm in confidence, take the initiative, adhere to the general tone of seeking progress while maintaining stability, actively implement the new development concept, and continue to promote the high-quality development of the machinery industry.