Transformation and upgrading of the machine tool market: improving the competitiveness is the right way

The machine tool industry is currently facing significant challenges, and many are asking: how should we go about transforming and upgrading? What is the most effective way to do it? In my view, based on the current macroeconomic environment and the state of the industry, improving the competitiveness of mid-to-high-end CNC machine tools must be the top priority for transformation and upgrading. China’s machine tool industry has gone through years of development and transformation, making considerable progress. In the first decade, the focus was on expanding scale and variety. As a result, the industry grew rapidly, with increased production capacity, better facilities, and improved productivity. Many products that were once unattainable have now been mastered, from "can't do" to "can do." During this time, the industry filled many product gaps, and the market was largely in short supply. However, as the national economic structure changes, we must re-evaluate what true transformation means today. Compared to advanced enterprises in developed countries, China's machine tool industry still lags behind, especially in high-end markets. Our products lack sufficient stability and reliability, which limits our ability to compete globally. Therefore, the next stage of transformation should focus on not just producing but also perfecting—shifting from “can do” to “do well.” The task ahead is challenging, but confidence is essential. 2012 marked a turning point for the industry. After over a decade of rapid growth, China became the world’s largest machine tool manufacturer and consumer. However, the global financial crisis and slowing economic growth changed the landscape. Market demand shrank, and the structure of demand shifted. Orders for low- to mid-end products dropped, while demand for high-end CNC machines rose. This made transformation an urgent necessity. Despite these challenges, there is reason for optimism. Over the years, the industry has grown stronger, with improved quality and a solid foundation for further transformation. In 2012, exports of metalworking machine tools reached $2.7 billion, up 13.4% from the previous year. A major milestone was achieved when Jinan No. 2 Machine Tool Group won a $200 million contract to supply stamping equipment for Ford Motor’s U.S. factories—marking a breakthrough in China’s machine tool industry. However, transformation requires more than just technological advancement. It needs collaboration across multiple sectors. Historically, the industry focused on product development without enough attention to market demands or full industrialization. This led to high costs, poor reliability, and weak competitiveness. Additionally, policy incentives often prioritized research output over real-world application, leading to a disconnect between innovation and commercial success. To truly transform, the industry must work together—researchers, manufacturers, policymakers, and users must align their efforts. Only then can we ensure that innovations translate into real value, driving sustainable growth and global competitiveness.

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