China's hardware tools should improve the structural grade

In recent years, China's hardware tool industry has experienced remarkable growth, becoming one of the largest in the world. By the end of the 1980s, a core group of over 100 key enterprises and designated manufacturers had established a solid production base, capable of manufacturing more than 300 million high-speed steel cutting tools and over 1,000 measuring instruments annually. The output of 10,000 pieces reached the top globally, while Japan, a major competitor in the tool manufacturing sector, only produced 120 million high-speed steel cutting tools at its peak. As manufacturing industries advanced, demand for standard cutting tools declined, causing production to drop to around 90 million units. Later, many joint ventures began operating independently from their parent companies, and some state-owned enterprises set up factories in coastal areas, giving rise to the first wave of private and township-owned tool manufacturers. These enterprises were more agile and free from the historical burdens of state-owned enterprises. They had the potential to become a new driving force for the industry’s reform and development. However, due to limitations in talent, technology, equipment, and management, most of them continued to follow the traditional path of quantitative expansion. Within just a decade, total output surged to over 1 billion units, but the product range remained focused on low-end items such as twist drills, construction bits, woodworking tools, and calipers. Despite the large volume, these products accounted for only about 30% of the domestic market’s total value. Due to brand recognition and quality issues, they have not yet entered the formal tool sales systems in China or abroad. However, they have made a significant impact on the export market. A major issue lies in the industry’s strategic missteps, leading to structural weaknesses in the market. Another key mistake was the failure to respond effectively to technological advancements and global manufacturing shifts. The industry missed the opportunity to upgrade its product structures and service models in a timely manner. As China’s hardware tool industry moves toward modernization, it must develop its own unique characteristics by starting with small, specialized steps. Large and medium-sized tool companies should not overestimate their capabilities. During the process of technological innovation and improving competitiveness, they should focus on key areas and avoid the pitfalls of large-scale, blind expansion. A realistic and fact-based approach will allow these enterprises to leverage their overall strengths within the industry, accelerating the pace of modernization and long-term sustainable development.

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