Electrical Equipment / Components & Telecoms

The Japan Work Machinery Industry Association recently released data on the confirmed value of machine tool orders for April. Orders from mainland China were 37.8 billion yen, which was 3.3 times the same month of the previous year. This amount is second only to November 2017, reaching the second highest level in history. In addition, investment in equipment such as semiconductors and personal computers remains strong, and demand for machine tools in the fields of automobiles and construction machinery is also expanding.

Experts believe that this shows that China's automobile, electronic information and other industries are recovering well, which in turn drives rapid growth in demand. In addition, after the RCEP takes effect, China and Japan will open their markets to each other, reduce tariffs and non-tariff barriers, and the manufacturing industry chain will further benefit.

China's imports of Japanese mechanical and electrical products surge

In the past year, China was the main overseas market for Japanese machine tools.

According to data released by the Japan Work Machinery Industry Association a few days ago, Japan's machine tool orders in 2020 amounted to 900.7 billion yen or approximately 56.28 billion yuan, a year-on-year decrease of 26.8%. However, the demand in the economically recovering China region continued to grow. The cumulative order value from January to November increased by 12.7% year-on-year to 172 billion yen, accounting for 1/3 of Japan's overseas orders. The latest data released by the Japan Machine Tool Manufacturers Association shows that in the first quarter of 2021, the order size and growth rate of Japanese machine tool companies reached 36.8%.

Japanese machine tool maker Okuma said: "In China, negotiations for infrastructure-related construction machinery, trucks and wind power generation are active."

Gao Shiwang, director of the industry development department of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, said in an interview with a reporter from the International Business Daily that the data of the Japan Machine Tool Industry Association is regarded as one of the important weather vanes of the global manufacturing industry. From the fourth quarter of last year to the present, Japanese machine tool export orders It has turned positive year-on-year, and the growth rate has gradually expanded since the beginning of this year, showing that global manufacturing investment is picking up. Asia is one of its important sources of orders, of which China's amount and proportion are at a relatively high level.

A person in charge of a machine tool company in Changsha revealed to a reporter from the International Business Daily that last year, the company’s business was affected by the new crown pneumonia epidemic, and import orders dropped sharply. This year, it has rebounded significantly. Orders were filled before the Spring Festival and entered the rush period immediately after the Spring Festival. , Orders for imported Japanese machine tool parts surged. This is also the recent market status of China's CNC machine tool and its core component industry chain.

"In general, China's automobile and industrial imports have increased significantly. The rapid development of the terminal industry naturally drives the growth of machine tool imports, which is closely related to the obvious recovery of the industry." Gao Shiwang said.

Data released by the General Administration of Customs of China on June 7 showed that China imported 2.87 trillion yuan in mechanical and electrical products in the first five months, an increase of 21.8%. Among them, integrated circuits were 260.35 billion, an increase of 30%, valued at 1.04 trillion yuan, an increase of 18.2%; automobiles (including chassis) were 429,000, an increase of 54.2%, and their value was 149.7 billion yuan, an increase of 61.2%.

In the first five months, from the perspective of importing countries, Japan was China's fourth largest trading partner. The total trade value between China and Japan was 969.79 billion yuan, an increase of 14.9%, accounting for 6.6%. Among them, China's exports to Japan were 431.36 billion yuan, an increase of 8.9%; imports from Japan were 538.43 billion yuan, an increase of 20.1%; the trade deficit was 107.07 billion yuan, an increase of 105.1%.

Imports are expected to continue to increase in the future

With the rapid development of the manufacturing industry, domestic and international double-cycle drives, industrial automation and digitization, China has a higher demand for the reliability, accuracy and production time of machine tools.

The signing of RCEP is not only the first free trade agreement between China and Japan, but also the first bilateral tariff reduction arrangement between China and Japan. After the RCEP takes effect, the economic and trade exchanges between China and Japan will continue to increase.

Wei Hao, a professor at the School of Economics and Business Administration of Beijing Normal University and director of the National Import Research Center, told a reporter from the International Business Daily that from an import perspective, after the RCEP takes effect, China and Japan will open their markets to each other, which is expected to reduce manufacturing costs and expand market space. , The manufacturing industry chain may benefit. Japan has relatively abundant capital and cutting-edge technology, while China is a large manufacturing country. There is room for complementarity between the economies and industries of the two countries, and the industrial chain is highly integrated. A win-win situation can be achieved under the RCEP framework.

At the same time, the epidemic has accelerated the online migration of various industries. The rapid development of remote office and distance education has injected new momentum into the development of electronic information industries such as mobile phones, notebook computers, and integrated circuits.

Yukio Iimura, president of the Japan Machine Tool Industry Association, said that Japan's machine tool orders are expected to reach 1.2 trillion yen in 2021, and the increase in demand for semiconductor manufacturing equipment and automobiles will become a new driving force.

Gao Shiwang predicts that, combined with the general trend of China's mechanical and electrical product trade in recent years, in the long run, the proportion of imported products in complete machines will decline, the proportion of parts and components will rise, and the processing and assembly links will accelerate the adjustment of the regional layout, but in the short term The global epidemic is still severe, and the pace of change will not be obvious.