The Influence of China's Entry into WTO on China's Machinery Industry and Countermeasures

Abstract As an important equipment department of the national economy, the machinery industry is of great significance to accelerate the optimization and upgrading of China's industry and achieve high processing. The "10th Five-Year Plan" period is a key transition period after joining the WTO, and the machinery industry should step up the system...

As an important equipment department of the national economy, the machinery industry is of vital importance for accelerating the upgrading and upgrading of China's industries and achieving high processing. The "10th Five-Year Plan" period is a key transition period after joining the WTO. The machinery industry should step up its system reform and strategic restructuring to enhance its anti-risk capability and market competitiveness as soon as possible.
I. Analysis of the international competitiveness of China's machinery industry At present, the machinery industry has already possessed a good material technology foundation and certain comparative advantages. However, as far as the overall competitiveness is concerned, there is still a big gap compared with the foreign advanced level, especially It is particularly prominent in major technical equipment, mechatronics equipment and high-tech products. In terms of industry management system and business operation mechanism, the reform has made some progress, but it is still not suitable for the new requirements of developing a market economy.
(I) Better foundation and comparative advantage of the machinery industry First, production capacity plays an important role in the world. China has built a relatively complete and large-scale manufacturing system. The output value, profits and taxes, the number of enterprises, and the number of employees have accounted for 20-25% of the national industry. The economic aggregate is second only to the United States, Japan, Germany, and France. The scale of the machinery industry ranks fifth in the world. More than 80% of China's basic industrial sector's production capacity is provided by domestic equipment, and almost all agricultural equipment is provided domestically. The output of some important products has leapt to the forefront of the world.
Second, some products have formed a comprehensive comparative advantage, especially the price of products is competitive. Ordinary machine tools, agricultural machinery, engineering machinery and other products can compete with similar foreign products in terms of quality, variety, performance and price. The price of domestic construction machinery is generally lower than that of imported original products. The market price of imported mainframes after domestically introduced technology is roughly equivalent to 50-80% of imported products of the same type; products designed by domestic self-made products and basically made of domestic spare parts, Its price is only about 1/4 of the imported products of the same model.
The third is to master the core technologies and key technologies of a number of major technical equipment. After technological transformation, introduction and independent development, the gap between the machinery industry and the international advanced level has been greatly shortened, and the overall technical level of the products has been greatly improved. Among the large-scale complete sets of equipment and important mechanical products provided by the machinery industry for the power, petrochemical, metallurgical, and transportation sectors, a considerable number have reached the mid-to-late level in the 1980s.
Fourth, it is more open to the outside world. The machinery industry has taken a leading position in the use of foreign capital and foreign trade. In the past 20 years, the growth rate of machinery industry exports and imports and exports has been higher than the growth rate of the country's total exports and imports and exports. Some industries, such as general mechanical and electrical products, daily-use machinery, etc., occupy a large share of the international market, and mechanical products have become the mainstay of China's export. At present, the actual tariff level faced by the machinery industry is about 10%, which is much lower than the national average tariff rate of 16.7%; non-tariff measures are also rare, and basically adopt international tendering. Companies are already operating in a more open competitive environment.
b) The obvious gap between the machinery industry and the international advanced level is mainly reflected in:
1. Production concentration is low and scale efficiency is poor. The machinery industry is the industry with the most significant scale and benefit characteristics. However, China has not been able to organize large-scale centralized production according to this economic law for a long time. The low level of repetition is serious, the organizational structure of enterprises is scattered, and the scale of operation is small, failing to form a large market. Large groups of companies and enterprise groups with international competitiveness have also failed to form a large number of specialized collaborative supporting factories. The production concentration of the top 300 enterprises in China's machinery industry (the sales of these enterprises accounted for the proportion of the entire machinery industry) is only 20%, while the developed countries are generally around 90%, and the gap in the economic scale of individual enterprises is even more disparate. The self-made rate of parts and components of China's machinery factories is mostly above 70%, while in developed countries, it is only about 20%. During the "Ninth Five-Year Plan" period, there were 22 regions and cities in China that listed the machinery industry (excluding automobiles) as a local pillar industry, and the development priorities were basically the same or similar, and the tendency of industrialization was very prominent.
2. The product variety is small, the technical content is low, and the quality is unstable. At present, less than 5% of China's major mechanical products have reached the advanced level of the world. Among the domestic metal cutting machine tools, CNC machine tools only account for 2.8%, while Japan has reached 30% in 1987 and Germany reached 54% in 1990. The quality standards of some mechanical products in China are generally lower than those of developed countries. There is a gap between national standards and international standards. The supply capacity of high-tech products, mechanical basic products and major technical equipment cannot meet market demand, and long-term dependence on imports; medium and low-grade mechanical products appear Structural excess, backlog is serious.
3. The level of technical equipment is low and the development capability is weak. China's machinery industry manufacturing technology and equipment level and the developed countries generally have a gap of 15-20 years, foreign advanced manufacturing technology and equipment, design techniques and advanced management ideas, only a few companies in China have just begun to adopt. Lack of product technology with independent intellectual property rights, most of the technology for newly developed products comes from abroad, and basically does not have the initiative to master product development. The new product development cycle is more than twice as long as that of industrial developed countries, with a longer product renewal cycle and a poor market response capability. This has become the primary reason for the continuous loss of China's mechanical products in the market competition.
4. The marketing and after-sales service system is not perfect. This is one of the biggest shortcomings of China's machinery industry enterprises. The sales and service network of multinational company's mechanical products is spread all over the world, and the sales channels of mechanical products in China are not smooth, and spare parts supply and after-sales service cannot keep up. Some export-producing companies do not have access to export channels, and information on the international market is not good. Many companies cannot adjust the design, production, sales and after-sales services of products in a timely manner according to changes in market demand.
5. The transformation of the enterprise management system and operating mechanism is not in place. A large number of state-owned enterprises are still not adapting to the increasingly fierce competition in the domestic and international markets, and the long-term historical burdens have made them difficult. The reform of the government management system still needs to be deepened.
Second, the impact of joining the WTO on the machinery industry "WTO accession" will have a significant positive impact on the machinery industry: the market competition environment is more open, which is conducive to the mechanical industry to optimize resource allocation in accordance with the principle of comparative interests, promote industrial upgrading, improve overall quality; The principle of mutual non-discrimination and fair trade in the WTO is conducive to the expansion of exports and foreign investment by the machinery industry. We can also use the trade dispute settlement mechanism to safeguard our legitimate rights and interests; reducing tariffs will help exporting enterprises reduce costs and improve Export competitiveness; further improvement of the domestic investment environment is conducive to the machinery industry to attract foreign investment and the introduction of advanced technology, and accelerate technological transformation and technological progress.
In the whole industrial system of our country, the mechanical industry has a relatively strong material foundation and has formed comprehensive comparative advantages in some industries. Therefore, the impact after the accession to the WTO is smaller than that of the automobile industry. However, the machinery industry has outstanding problems of “scatter, chaos, low and weak”, and its overall competitiveness is not strong, so the impact will be greater than other industrial sectors and last longer. According to the analysis of the Sino-US agreement, the impact of the machinery industry is mainly reflected in the following aspects:
1. Tariff concessions have a greater impact on major technical equipment, mechatronic products and high-tech products. According to the analysis of the National Machinery Bureau, it is expected that the products affected by the impact will account for about 40% of the total machinery industry, mainly for complete sets of technical equipment and high-tech products with higher added value. Products with strong impact resistance account for about 60%, mainly labor-intensive, resource-intensive general machinery and accessories.
2. The elimination of non-tariff measures has had a serious impact on specific machinery products, and the impact is greater than tariff concessions. At present, there are 385 kinds of industrial products subject to quotas, licenses and specific tenders in China, mainly related to the weaker products in the automobile and parts, petrochemical and machinery industries, including 15 kinds of mechanical and electronic products, including cameras, truck cranes and electronics. Microscope, etc. Non-tariff measures will be phased out before 2005, and these products will be difficult to compete with imported similar products.
3. The open circulation field will have an impact on the production and sales of the machinery industry. After China's entry into the WTO, China will basically open its domestic management rights and import and export management rights in the field of circulation within three years, and open distribution services related to industrial products (including commission agency services, wholesale, retail, franchising) and after-sales services. Cancel the restrictions on the geographical, quantity and equity ratio of foreign-established distribution enterprises. If multinational companies come to China to set up a wholly-owned or controlled distribution system, they will open the door for their mechanical product sales and engineering package construction. The market share of China's machinery industry, especially major machinery products, will be encroached. Taking the automobile industry as an example, China allows American auto companies to set up distribution and after-sales service networks in China. The market share of domestically produced vehicles, especially small cars and spare parts, is bound to face unprecedented squeeze.
4. The opening up of the financial sector will have a certain impact on the machinery industry. By 2005, China will gradually eliminate geographical restrictions on foreign financial institutions and restrictions on renminbi business, allowing them to provide financial services to foreign-invested enterprises, foreign natural persons, Chinese companies and natural persons in China, including consumer credit, mortgage loans, financial leasing, securities. Trading and more. This will impact China's machinery industry from two aspects: on the one hand, it may directly expand the sales of foreign machinery products. For example, we allow US non-bank financial institutions to provide auto consumer credit, so that financial companies under the big companies such as Ford and GM in the United States will compete for Chinese auto consumers with strong financial assets and advanced services; On the other hand, foreign-invested companies may receive more convenient financial support. Considering the problems of high asset-liability ratio, weak financial strength and low financial reputation of Chinese enterprises and natural persons, foreign financial institutions will probably choose foreign-invested enterprises and foreign natural persons as the service targets, thus enhancing the competition of China's machinery industry. The strength of the opponent.
5. The adjustment of foreign investment policies and localization policies will increase the foreign competition pressure of the machinery industry. Since joining the WTO, China will cancel the foreign exchange balance, export performance, local content and technology transfer requirements of foreign investors. This will have an adverse impact on China's machinery industry to expand exports, market-for-technology, and localization to drive industrial upgrading. Multinational corporations will rely on their capital and technological advantages to acquire China's machinery enterprises in a large way, occupying the Chinese market, and the market environment of domestic machinery products will become more severe.
6. Following the principles of fair trade and non-discrimination will pose serious challenges for state-owned machinery companies. We promise that all state-owned and state-invested enterprises after WTO accession should make business decisions based on commercial considerations in accordance with WTO requirements. The Chinese government will not exert direct or indirect influence to ensure that other WTO members' enterprises are Equal competition under non-discriminatory conditions. This will inevitably have a huge impact on the old and backward management system, operating mechanism and ideas of state-owned machinery enterprises, and its impact will be far-reaching.
III. Countermeasures During the 10th Five-Year Plan period, the machinery industry should focus on governance and treatment, and promote strategic reorganization, so that the business operation mechanism, economic scale, product quality grade, and production technology level should be adapted to the market competition after WTO entry. New pattern.
(1) Accelerate the pace of enterprise reform and restructuring. In order to establish a modern enterprise system, machinery industry enterprises should speed up the transformation of operating mechanisms and form a group of large-scale enterprises and enterprise groups with strong competitive strength. At the same time, we will cultivate a group of “small and specialized” cooperative supporting enterprises, and form an enterprise organization system with large-scale filial piety, small insurance, and specialized division of labor. Encourage enterprises to implement strong alliances and implement standardized bankruptcy for enterprises that are insolvent and have no hope of turning losses. Policies such as the issuance and listing of stocks and bonds, and the write-off of bad debt reserves should continue to be tilted toward the enterprises that the state supports. Expand direct financing channels, promote the integration of industrial capital, financial capital, and technology capital, and promote joint ventures and cooperation between state-owned enterprises and non-state-owned enterprises.
(2) Highlight key areas, clarify limited targets, and increase structural adjustment. The machinery industry should improve production concentration and technology level in key industries such as major technical equipment, CNC machine tools, agricultural machinery and engineering machinery, improve product quality and grade, and enhance the ability to replace imported and engineering complete sets. Further consolidate and give play to the existing comparative advantages of the ordinary machine tools and other industries, and strive to expand market share. At the same time, strictly limit the production of surplus products, and resolutely eliminate processes, products, equipment and enterprises that are backward in technology, polluting the environment, low in quality, and wasting resources. State-owned capital should gradually withdraw from the general competitive and non-key industries and turn to key areas and high-tech industries. All localities should develop characteristic industries according to comparative advantages, and avoid duplicating and rebuilding the self-contained system.
(3) Formulate industrial policies for key industries and continue to implement necessary support policies and measures. We will promptly formulate industrial policies to support the development of high-tech industries such as CNC machine tools, and accelerate the pace of optimization and upgrading of the machinery industry. We will increase support for large-scale key enterprises, and continue to implement policies such as debt-to-equity swaps and subsidies for government bonds to support technological transformation. The export machinery products shall be fully refunded according to international practice, and enterprises shall be encouraged to expand exports. Improve the management methods for foreign investment, support and standardize enterprises to invest and set up factories abroad. Timely release and adjust the catalogue of encouraged, restricted and eliminated products in the machinery industry, and implement the corresponding differential tax rates and differential interest rates. Continue to support the localization (or autonomy) of major technical equipment, implement certain preferential treatments in open tendering, give buyers credit, determine relevant supporting projects, and establish investment risk funds for major mechanical products and high-tech products.
(4) Implement national treatment for all types of enterprises as soon as possible. In terms of investment field, region, business scope, etc., domestic enterprises and foreign-invested enterprises should be treated equally, and market access restrictions on domestic non-public economy should be relaxed. Wherever foreign investment is allowed, the investment and market sectors should be as Enterprises enter first. We will pay close attention to the unified income tax rate and social security fee collection rate, clean up various tax reductions and exemptions for foreign-invested enterprises, and revise the foreign investment industry guidance catalogue to create an equal external environment for domestic enterprises and foreign-invested enterprises.
(5) Appropriately protect mechanical products with weak competitiveness by applying relevant WTO rules and regulations. Serious study of WTO rules and exceptions for developing countries, such as categorization of commodity classification, grading and sales, remedies for deterioration of the balance of payments, and the provision of necessary government assistance for accelerating the establishment of specific industrial sectors These provisions protect the safety of our related industries.
Further improve the "Anti-dumping and Anti-subsidy Regulations" and enact the "Anti-Monopoly Law" as soon as possible to prevent and suppress unfair competition of foreign enterprises, especially the monopoly of multinational corporations on the Chinese market. We will promptly formulate the "Regulations on Safeguards", formulate and revise standards, standards for technology, quality, environmental protection, sanitation and safety of relevant industries and products, and implement strict production licenses, sales licenses, product packaging, instructions for use and description of origin. Thus, it not only regulates the market competition order, but also suppresses the impact of excessive imports of foreign products, and promotes the competitiveness of domestic machinery products.
(6) Accelerate the transformation of the way the government manages the economy. The management department of the machinery industry should adapt to the laws of the market economy and the new requirements for WTO entry. In accordance with international principles such as the principle of transparency, it is adept at using the open laws and regulations of China to conduct indirect macro-control and industry management, and avoid direct administrative intervention based on internal documents. In the process of formulation and implementation of industrial policies, industry planning and standards systems, the industrial sector and the integrated management departments should strengthen coordination, strengthen guidance and services to enterprises, and help enterprises adapt to new challenges as soon as possible.
Give full play to the industry self-discipline role of industry associations, coordinate external roles and their communication role between government and enterprises. Under the guidance of the government, industry associations should coordinate and coordinate domestic enterprises to participate in international competition, avoid fratricidalism, actively organize domestic anti-dumping and external response, and safeguard the legitimate rights and interests of Chinese enterprises according to law.

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