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Machine production in Xuanhua: fight for technology leadership
Photo: Chen Xiaodong / Imaginechina via AP
The good news first: According to a study by the state-owned business development agency Germany Trade & Invest (GTAI), German mechanical engineers will also export more again in 2021 - plus 13 percent to 249 billion dollars.
However, the long-standing German engineering skill in the field of mechanical and plant engineering has probably permanently lost the race with China.
According to a study, China is now massively expanding its lead over the former world mechanical engineering export champion Germany. Chinese exports of machinery and equipment will grow by almost 31 percent to $ 296 billion this year, while German exports will only increase by 13 percent to $ 249 billion, according to the study, which the Reuters news agency quotes.
In 2020, the People's Republic overtook Germany's previous export world champion for the first time, but the lead of six billion dollars was much smaller than the approximately 47 billion dollars now expected.
The Association of German Mechanical and Plant Engineering (VDMA) assumed that China last year, with 165 billion euros, accounted for 15.8 percent of the total export volume with machines and systems.
According to this, Germany sold machines and systems to the value of 162 billion euros abroad.
That still corresponded to a share of 15.5 percent.
From air conditioning to mining: China is dominating more and more sectors
"Thanks to Corona, China became the world's largest supplier of machines for the first time in 2020," the study now says. The rapid ramp-up of the industry there after the strict lockdown made this possible. The study warns: "The Chinese competition is overtaking German exporters in more and more segments." Of the 28 sub-segments of mechanical and plant engineering, the competitor was already ahead of Germany in 16 sectors in 2020. "This includes areas in which Germany traditionally exports a lot in terms of value." The areas mentioned include valves, materials handling, heating, cooling and air conditioning technology, as well as mining, structural and civil engineering machines.
Compared to 2010, the German mechanical engineering companies increased their global deliveries by 8.7 percent in 2020. "Suppliers from the Middle Kingdom, on the other hand, almost doubled their exports in the same period," it says. "The trend shows that German exports are likely to lose this segment to Chinese machine builders in the long term." However, many foreign companies also produce locally in China, including machine builders from Germany.
Beijing wants to achieve technological leadership in selected branches of industry, for which the program “Made in China 2025” was initiated.
"The Chinese leadership intervenes in the market, among other things by subsidizing Chinese state-owned companies and giving them preference over foreign providers." According to this, German companies report numerous restrictions that reduce their competitiveness.
These include joint venture constraints, difficult access to public contracts and interference in the management of foreign companies by party cadres.
According to the VDMA, the rise of China opens up opportunities for German manufacturers.
For example, there is “noticeable pent-up demand” in the field of industrial robots in China, which promises good export opportunities.
apr / Reuters
