Current Status and Outlook of China's Equipment Manufacturing Industry

I. What is the Equipment Manufacturing Industry
　　Currently, people's understanding of the equipment manufacturing industry varies, and there is no universally accepted definition or scope. Luo Baihui, a specially invited researcher at the China Center for International Economic Research, believes that according to equipment function and importance, the equipment manufacturing industry mainly includes three aspects:  

　　First, major advanced basic machinery, namely the equipment for manufacturing equipment—the "mother machine" of work, mainly including numerical control machine tools (NC), flexible manufacturing units (FMC), flexible manufacturing systems (FMS), computer integrated manufacturing systems (DIMS), industrial robots, large-scale integrated circuits and electronic manufacturing equipment, etc.  
　　Second, important mechanical and electronic components, mainly advanced hydraulics, pneumatics, bearings, seals, molds, tools, low-voltage electrical appliances, microelectronics and power electronics devices, instruments and meters, and automated control systems, etc.  

　　Third, major complete sets of technological equipment required for various sectors of the national economy (including agriculture, energy, transportation, raw materials, medical and health, environmental protection, etc.), science and technology, and military production, such as mining equipment for well and open-pit mining, complete sets of equipment for large-scale thermal power, hydropower, and nuclear power plants, complete sets of equipment for ultra-high voltage AC/DC power transmission and transformation, complete sets of equipment for petrochemical, coal chemical, and salt chemical industries, complete sets of equipment for ferrous and non-ferrous metal smelting and rolling, advanced transportation equipment such as civil aircraft, high-speed rail, subways and urban rail vehicles, automobiles, and ships, large-scale environmental protection equipment such as sewage, garbage, and large flue gas purification treatment, important complete sets of equipment required for large-scale projects such as large river governance, tunnel excavation and shield construction, and large-scale water and gas transmission, advanced and applicable agricultural machinery and complete sets of equipment for modern facility agriculture, large-scale scientific instruments and medical equipment, advanced large-scale military equipment, communication, air traffic control and aerospace equipment, advanced printing equipment, etc.  
　　II. Content of the Adjustment and Revitalization Plan for the Equipment Manufacturing Industry

　　The equipment manufacturing industry is a strategic industry that provides technical equipment for various sectors of the national economy. It has a high degree of industrial relevance, strong employment absorption capacity, and is technology and capital intensive. It is an important guarantee for industrial upgrading and technological progress in various industries and a concentrated manifestation of national comprehensive strength.

　　In order to cope with the impact of the international financial crisis, implement the overall requirements of the CPC Central Committee and the State Council on maintaining growth, expanding domestic demand, and adjusting the economic structure, ensure the stable development of the equipment manufacturing industry, accelerate structural adjustment, enhance independent innovation capabilities, improve the level of self-reliance, and promote industrial upgrading, this plan is specially compiled as an action plan for comprehensive countermeasures for the equipment manufacturing industry. The planning period is 2009-2011.
　　1. Current Status and Challenges Facing the Equipment Manufacturing Industry
　　After years of development, China's equipment manufacturing industry has formed a complete range of categories, a large scale, and a certain level of technology, becoming an important pillar industry of the national economy. Since the implementation of the "State Council's Opinions on Accelerating the Revitalization of the Equipment Manufacturing Industry" (Guo Fa [2006] No. 8), the development of the equipment manufacturing industry has accelerated significantly, the level of self-reliance in major technical equipment has been significantly improved, international competitiveness has been further enhanced, and the technological level and market share of some products have risen to the forefront of the world. China has become a major equipment manufacturing country, but problems such as the industry being large but not strong, weak independent innovation capabilities, backward basic manufacturing level, low-level repeated construction, and difficulties in promoting the application of independently innovated products remain prominent. At the same time, affected by the international financial crisis, since the second half of 2008, the domestic and international market demand for equipment has sharply shrunk, and the years of rapid growth of China's equipment manufacturing industry has slowed significantly, enterprises are facing difficulties in production and operation, economic efficiency has declined, and sustainable development is facing challenges.

　　It should be noted that China is currently in a critical period of expanding domestic demand, accelerating infrastructure construction, and industrial transformation and upgrading, and there is a huge market demand for advanced equipment; the financial crisis has accelerated the adjustment of the world's industrial structure, providing China with opportunities to participate in industrial re-division of labor, and the fundamentals of the development of the equipment manufacturing industry have not changed. Effective measures must be taken to seize opportunities, accelerate industrial structural adjustment, promote industrial optimization and upgrading, strengthen technological innovation, and promote the sustained and stable development of the equipment manufacturing industry, so as to contribute to the steady and relatively rapid development of the economy.

　　2. Guiding Ideology, Basic Principles and Objectives

　　(1) Guiding Ideology.
　　Fully implement the spirit of the 17th National Congress of the CPC, be guided by Deng Xiaoping Theory and the important thought of "Three Represents," and thoroughly implement the scientific outlook on development. Rely on national key construction projects and carry out large-scale independent work on major technical equipment; enhance the independent innovation capabilities of enterprises by increasing investment in technological transformation and significantly improve the level of basic supporting parts and basic processes; promote industrial structural optimization and upgrading by accelerating enterprise mergers and acquisitions and product upgrades, comprehensively enhance industrial competitiveness, and strive to promote the transformation of the equipment manufacturing industry from large to strong.

　　(2) Basic Principles.

　　Adhere to the combination of equipment self-reliance and key construction projects. Strengthen policy support and market guidance, make full use of the market demand created by the implementation of key construction projects and the adjustment and revitalization of key industries, accelerate the promotion of equipment self-reliance, guarantee engineering needs, and drive industrial development.

　　Adhere to the combination of independent development and introduction, digestion, and absorption. Support enterprises in independently developing new products, encourage the introduction, digestion, absorption, and re-innovation, guide enterprises to gradually shift from relying on the introduction of technology to independent innovation, and vigorously promote the industrialization of technology.

　　Adhere to the combination of developing complete machines and improving the level of basic supporting products. Strive to achieve self-reliance in major technical equipment and drive the development of basic supporting products. Improve the technical level of basic parts, develop special raw materials, and reverse the situation where basic supporting products mainly rely on imports.
　　Adhere to the combination of developing enterprise groups and supporting specialized enterprises. Support backbone enterprises in the equipment manufacturing industry to develop large-scale comprehensive enterprise groups through mergers and acquisitions, encourage host production enterprises to shift from mainly single-machine manufacturing to mainly system integration, guide specialized parts production enterprises to develop in the direction of "specialization, refinement, and uniqueness," and form an industrial pattern of complementary advantages and coordinated development.