China's machinery industry development was mainly driven by domestic demand
Orient Securities analyst Zhou Fengwu Institute senior machinery industry in an interview that the U.S. subprime mortgage crisis's impact on China's machinery industry is relatively small, due to: the development of China's machinery industry, driven mainly by domestic demand, exports relatively small proportion, about about 20%, and the developing countries export more than regional.
He pointed out that this influence is indirect, sequential transmission. As China exports mainly machinery industry is the third world countries, while the sub-prime crisis is affecting Europe and the United States and other developed countries through the first turn indirectly affect developing countries. Therefore, in addition to a few sub-sectors (eg shipbuilding) and a small number of enterprises (such as the Zhenhua Port Machinery, CIMC, etc.), the machinery industry, the export ratio much lower (about 10% to 20%) of the sub-sectors and enterprises subject to The impact will not be obvious.
As for how to deal with, the U.S. subprime mortgage crisis on the overall impact of China's machinery industry is not, but exporters should make some corresponding preparations. Independent record companies should increase investment, technological upgrading and product quality, in the further development of India, the Middle East, Russia, Brazil and other developing markets, the push into Europe and the United States and other developed countries markets. First of all, if the business development and expansion of Europe and the United States and other developed markets, re-entering the Middle East and other developing markets, the product will be more easily recognized, and the added value is relatively high.
In fact, compared to the sub-prime crisis on the export of machinery products, the impact of RMB appreciation would be even greater. According to reports, the current third-party money identified mainly U.S. dollars and accelerating RMB appreciation will directly affect the export, resulting in the export of mechanical products less price competitive. In 2007, China's machinery industry exports some of the gross profit level slightly higher than the domestic level, the level of expected 2008 gross margin will be slightly lower than the domestic price level, the situation is not optimistic. In this regard, Zhou Fengwu proposal, companies should strive to promote export products, and increase the bargaining power of value-added products to enhance and expand the export market. At the same time, by strengthening internal management to achieve cost reduction and efficiency. In addition, businesses can take to hedge other means, through the derivatives market to avoid the risk of RMB appreciation.
And Zhou Fengwu-minded CITIC Securities analyst Guo Yaling, senior machinery industry also believes that the U.S. subprime mortgage crisis's impact on China's industry is mainly demand indirectly through the formation. At present, China's machinery exports to the U.S. advantage has focused on price, so even if the U.S. economic downturn, the demand for low-end products and the weakening economy, the possibility of not much.
The growing appreciation of the risk of the renminbi, Guo Yaling suggested that enterprises should be more ready to hand, in addition to hedging and other means, it should lock the quality customers to sign long-term agreement with RMB. At the same time, enterprises can also use the foreign exchange purchase key components. At present, China's exports of machinery parts and low-end products also to the majority, the whole assembly of parts used in high-end is still dependent on imports, such as the use of foreign exchange purchase high-end components to reduce cost. In addition, the company may decrease the proportion of RMB loans increased foreign currency loans.
For if the U.S. economy into recession, will lead to trade protectionism caused the deterioration of Sino-US trade environment, Guo Yaling that since the total exports of machinery products in China is not large, it is difficult to constitute dumping suspects. Meanwhile, as China's machinery products, there is still the price competitiveness of the export situation therefore remains optimistic.
Mechanical industry, in recent years maintained a good momentum of rapid growth, but countries also issued a series of policy, industrial machinery and equipment manufacturing for major support. After years of development, some machinery industry sub-sectors such as construction machinery already has export capabilities, product performance, quality significantly improved some of the products are close to the international level of similar products. With product prices and relatively strong competitive edge, is expected to China's machinery industry the proportion of high added value products will be increased gradually. Although the overall technological level of China's machinery industry with the international advanced level still lags behind, some of the key components is also difficult to own, but compared with other industries, the impacts may be smaller in the future will continue to maintain a certain growth momentum.
According to reports, the present Sany, companies such as crawler cranes, road machinery and other high-end products, gross margin as high as 30% to 40%. Guo Yaling said that at present China's machinery exports to many in Asia, Africa, and Latin American countries, and lower profit in the low-end products, hence the machinery exporters next step should be efforts to improve the added value of products, the creation of own brand increase the European market development efforts.
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