Analysis of China's Machinery Industry Trade Deficit

In 2010, China’s overall industrial strength has leapt to a new level. In 2010, the industrial added value of all above-scale industries increased by 15.7% year-on-year, accelerating by 4.7 percentage points year-on-year. The annual industrial added value increased from 7.72 trillion yuan in 2005 to about 16 trillion yuan, an average annual increase of more than 11%. Relevant statistics show that: In 2010, China's total import and export of machinery products reached US$1.6 trillion, an increase of 32.3% year-on-year, which was US$233.5 billion more than the highest recorded in 2008; exports of mechanical products drove the country’s foreign trade exports to increase by 18.3 percentage points.

According to customs statistics, in 2010, China’s machinery industry realized a total import and export volume of USD 513.83 billion, an increase of 36.39% year-on-year, which is 1.69 percentage points higher than the national import and export growth. Among them, exports were 258.483 billion U.S. dollars, an increase of 32% year-on-year; imports were 255.347 billion U.S. dollars, an increase of 41.14% year-on-year; and the machinery industry's cumulative import and export trade surplus was 3.136 billion U.S. dollars, a significant decrease of 11.777 billion U.S. dollars from 14.907 billion U.S. dollars of the same period of last year.

According to statistics, while the total import and export volume of machinery industry and exports and imports hit record highs in 2010, the total import and export volume of the machinery industry also exceeded US$50 billion for the first time in 2010, reaching US$50.848 billion, a record high, and a year-on-year increase. 24.26%. Among them, exports were 24.952 billion U.S. dollars, an increase of 20.41% over the same period last year; imports were 25.896 billion U.S. dollars, an increase of 28.22% over the same period last year. In spite of this, in December, the growth rate of total imports and exports, exports, and imports declined significantly compared to November, slowing down 14.17, 12.73, and 15.79 percentage points respectively.

Affected by many factors, the trade balance of the machinery industry fluctuates greatly. In December, there was a deficit for the fifth month since 2010, when the import and export deficit reached 944 million U.S. dollars, and the trade deficit expanded by 318 million U.S. dollars from the previous month. In this regard, industry insider Luo Baihui believes that the increase in the trade deficit is mainly due to the fact that some high-end machinery products still have a certain gap with foreign advanced countries, which cannot yet meet the needs of domestic users. For this reason, leading companies from industries such as automobiles, machine tools, molds, construction machinery, ships, and railway equipment should speed up the establishment of a marketing network overseas, nurture export bases, and realize the transition from “workshop type” to “marketing type”.

In 2010, the coordination of regional development was further enhanced. The added value of industries above designated size in the East, Central and West regions increased by 14.9%, 18.4%, and 15.5%, respectively. From January to December, of the 31 provinces and cities, the cumulative import and export volume of the machinery industry in Guangdong, Jiangsu, and Shanghai reached 270.062 billion U.S. dollars, accounting for 52.56% of the total trade volume of the country. The total import and export volume of Guangdong's machinery industry reached US$121.42 billion, an increase of 33.19% year-on-year, of which imports totaled US$50.378 billion, up 38.46% year-on-year, and exports totaled US$71.063 billion, a year-on-year increase of 29.69%. The total import and export volume of Jiangsu Machinery Industry was US$78.592 billion, an increase of 44.18% year-on-year. The total import and export volume of Shanghai Machinery Industry reached US$70.029 billion, an increase of 38.22% year-on-year. In terms of trade balance, there are 14 provinces and cities with favorable trade balance, among which the three provinces with the most favorable balance are: Zhejiang Province (26.47 billion US dollars), Guangdong Province (20.685 billion US dollars) and Jiangsu Province (5.427 billion US dollars). There are 17 provinces with trade deficits, among which the three cities with the highest deficit are: Beijing (-31.181 billion US dollars), Shanghai (-128.91 billion US dollars) and Jilin Province (-83.99 billion US dollars).

In 2010, China’s machinery industry and major trading countries or regions had 8 bilateral trade totaling more than US$10 billion, of which only four countries or regions exceeded US$10 billion in total exports, and countries with over US$10 billion in total imports. There are 5 or regions. From January to December, the European Union, Japan, and the United States remained the largest trading partners for the import and export of China's machinery industry. Its trade volume totaled 286.768 billion U.S. dollars, accounting for 55.81% of the entire industry. Among them, bilateral trade with the EU totaled US$127.654 billion, an increase of 35.61% year-on-year; total trade with Japan was US$96.811 billion, a year-on-year increase of 46.68 percent; and total US import and export trade amounted to US$62.32 billion, an increase of 31.55%. In the month of December, the deficit in the import and export trade of the machinery industry mainly came from Japan, South Korea and the European Union. Among them, US$7.77 billion was imported from Japan, an increase of 30.42% year-on-year, and exports were 2.171 billion US dollars, a year-on-year increase of 15.56%, a trade deficit of 5.591 billion US dollars, and Korea’s imports of 2.125 billion US dollars, a year-on-year increase of 34.24%, and exports of US$848 million, a year-on-year increase. 7.69%, the trade deficit reached 1.277 billion U.S. dollars; the U.S. imports 8.394 billion U.S. dollars, up 26.4% year-on-year, and exports 4.121 billion U.S. dollars, up 19.93% year-on-year, with a trade deficit of 4.273 billion U.S. dollars.

General trade and processing trade are still the most important means of trade in the machinery industry. From January to December, the total volume of imports and exports of general trade was 297.82 billion U.S. dollars, and the proportion of trade volume was 57.96%, an increase of 45.77% year-on-year. Among them, imports of 162.628 billion US dollars, an increase of 50.46%; exports of 135.192 billion US dollars, an increase of 40.51%. The total import and export volume of processing trade was US$156.567 billion, accounting for 30.47% of trade volume, which was a year-on-year increase of 25.97%. Among them, the import of 53.554 billion US dollars, an increase of 25.93%; export 103.202 billion US dollars, an increase of 25.99%. Judging from the trade balance, the trade surplus of the machinery industry for the year is mainly from processing trade. From January to December, the processing trade surplus reached US$49.468 billion, of which the processing trade surplus for raw materials reached a surplus of US$43.489 billion, and the processing trade of imported materials accounted for US$5.979 billion.

In 2010, new progress was made in industrial restructuring. From January to December, state-owned, private, and foreign-funded enterprises realized total imports and exports of 90.222 billion, 106.72 billion and 316.889 billion U.S. dollars, respectively, an increase of 13.36%, 43.24%, and 42.33% year-on-year. The trade deficit of state-owned enterprises was US$3.597 billion, the deficit scale increased by US$510 million from last month; the trade deficit of foreign-funded enterprises was US$33.037 billion, the deficit range increased by US$3.996 billion from the previous month; the surplus of private enterprises was US$39.77 billion, with a surplus. Compared with the previous month, the scale increased by 3.565 billion US dollars. From January to December, in the 13 industries of the machinery industry, except for the accumulative growth rate of import and export of the heavy mining industry, the growth rate of the other 12 industries was positive. From an industry perspective, the two industries of automobiles and machine tools have achieved outstanding performance. The import and export growth of the automotive industry is the fastest, totaling US$79.66 billion, an increase of 59.69% year-on-year. Among them, the import of 48.845 billion US dollars, an increase of 74.95%; exports of 30.821 billion US dollars, an increase of 40.3%. The growth rate of imports and exports in the machine tool industry followed, with total imports and exports reaching US$215.63, an increase of 57.6% year-on-year. Among them, the import of 15.927 billion US dollars, an increase of 66.73%; exports 5.636 billion US dollars, an increase of 36.49%. From January to December, among the 92 products monitored by the machinery industry, the import and export volume of metal processing machines reached US$11.135 billion. The total amount of metal processing machine tools imported this year totaled 97,785 units. The unit prices for imports throughout the year showed a steady decline and slowed up at the end of the year. The annual unit price for imports was 95,796.69 U.S. dollars; the annual export volume of metal processing machine tools reached 4,385,475 units. Type fluctuations, the annual export price of 403.07 US dollars.

In 2010, China's electronic information industry entered a stage of recovery growth, and overall it showed a steady upward trend. The added value of electronic manufacturing industry increased by 16.9% over the previous year, and the growth rate accelerated by 11.6 percentage points year-on-year. The software industry's revenue exceeded 1.3 trillion yuan, an increase of 31.3%.

In 2010, new breakthroughs were made in independent innovation capabilities. About 40% of the main products in the machinery industry are close to or reach the international advanced level. The apparel, home textile, household appliances, and automobile industries have formed a number of independent brands. In 2010, the domestic market share of China's own brand passenger vehicles reached 45.6%. Manned spaceflight and lunar exploration have been successful. China's new regional aircraft has made its first flight, and a number of major technical equipment such as UHV power transmission and transformation equipment and a million-ton ethylene plant have been independently manufactured. A number of major independent innovation achievements have been achieved in key areas such as high-end CNC machine tools and a new generation of broadband wireless mobile communications.

In 2010, significant achievements were made in the localization of major technology and equipment. The output rate of new products reached 18.92%, which is 8 percentage points higher than the total output value. According to reports, major national science and technology projects have achieved phased application results. China's third-generation mobile communication TD-SCDMA with independent intellectual property rights has been demonstrated and promoted on a large-scale basis. Lithium 1000 domestic CPUs have been successfully applied to petascale computer Tianhe No. 1 and high-generation liquid crystal display panels and other major projects. Accelerate implementation. Luo Baihui believes that the upgrading of machinery industry products will be accelerated, and there will be obvious trends in flatness, networking, intelligence, and greening. The integration of informatization and industrialization began to show results. The digitization of production equipment and automation of process control continued to increase. Some key industry information management and decision-making systems entered the stage of application integration. Emerging industries such as e-commerce have risen rapidly, and the level of economic and social information has risen significantly. However, the current industrial economic operation still faces some difficulties and problems. For example, the trading environment is complex and volatile, and exports are facing long-term pressure; the inflation pressure on management is expected to increase and the production cost of enterprises is steadily rising; the problem of financing for SMEs has not yet been solved fundamentally. The development environment still needs to be optimized; resources and environmental constraints are becoming increasingly prominent, and the situation facing energy saving and emission reduction is still severe. During the “Twelfth Five-Year Plan” period, we should pay more attention to structural energy conservation.