Why do domestic factories choose expensive foreign equipment? To the sleeping Chinese manufacturing industry!

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The sleeping Chinese manufacturing industry is due to wake up! Our ** is powerful! Yet behind this strength lies something thought-provoking: on the one hand, it has achieved unprecedented rapid development, but on the other hand, some fundamental aspects are far behind others. Take the manufacturing industry as an example; it constitutes the foundation of the real economy. On the surface, China is a major manufacturing power, and to those who are not familiar with this sector, it seems that there is nothing that China cannot produce – the manufacturing industry is in a state of prosperity. But looking beyond the surface to the essence, it can be said that in most areas of China’s manufacturing sector, whenever complex core technologies are involved, they are almost entirely under foreign technological control – this represents an industry crisis hidden behind apparent prosperity. When visiting those leading factories in our country of which we are proud, it is evident that they all use equipment from brands from countries such as Japan, Germany, and Switzerland. Whether it’s machine tools, software, materials, cutting tools, or other equipment, how many of these items are not from foreign brands? As a major manufacturing country, it is indeed disheartening to be so dependent on foreign technology. ▌ Why do domestic factories choose expensive foreign equipment? Factories purchasing equipment certainly do not have a tendency to pursue luxury items as is the case in the general consumer goods industry. The manufacturing industry is a practical sector; when producing components, emphasis is placed on tangible metrics such as processing precision, efficiency, quality, and stability. Domestic machine tools are mainly of mid-to-low end quality; the processing performance and stability of these machines fall far short compared to those imported from abroad. They either lack sufficient precision, have low efficiency, or suffer from a high failure rate. In the fierce competitive market environment, factories compete on the competitiveness of their production processes, and they prefer to spend more money on imported machine tools rather than risk issues by opting for cheaper alternatives. Undoubtedly, once domestic factories develop to a certain level of strength, they will inevitably choose machine tools from imported brands. For example, there are numerous manufacturers in China that produce CNC machining centers; the cost of a single machine is around 100,000 yuan, and price competition is fierce in the low-end manufacturing sector. CNC machining centers manufactured in Switzerland, Germany, and Japan can cost millions, and prices of several million are not uncommon either; yet they remain highly sought-after in the industry. The machine tool industry is one that relies on actual results to determine success. Domestic manufacturers should realistically acknowledge the gaps existing; they shouldn’t claim to have surpassed foreign counterparts just because they have developed a little technology. The machine tool industry cannot be dominated through excessive boasting or manipulation – market choices are made based on rational considerations. The lack of trust among Chinese people in domestic machine tools simply shows that the path for domestic equipment to catch up is still very long! ▌ If you can’t create it yourself, isn’t it fine to just buy it with money? Some people believe that since the Chinese are wealthy, anything that can be solved with money isn’t a problem at all! If we can’t build machine tools, then there’s no point in trying hard; it’s better to just use those that are already available, right? After all, foreigners are still asking us to buy their machine tools. If it’s something we can manufacture ourselves, having others do it can be considered a skill. However, we are unable to manufacture these high-end precision machine tools, so we are forced to rely on others; they decide the price, and there is no room for negotiation at all. In fact, **all items are actually created through manufacturing. Our manufacturing plants, on the other hand, use most of their profits to purchase imported equipment. The factories are constantly in a cycle of buying new equipment; after a few years, those new devices need to be replaced again. Failing to do so means losing competitiveness, so the profits earned must once again be spent on purchasing equipment. It can be said that China’s manufacturing industry is essentially working hard for foreigners. **Of course, transaction taxes are steadily collected during this process, while the vast majority of the value created by manufacturing labor goes to foreigners. Chinese people use high-end equipment while earning low salaries, and this is one of the fundamental reasons behind the growing gap between the rich and the poor. These days, foreign-brand machine tools are becoming increasingly intelligent, with various core technologies being highly integrated and encrypted. As a result, the requirements for skilled workers in the manufacturing sector are decreasing. On the surface, this seems like a positive development; however, for China’s equipment industry, which already has difficulties in mastering basic manufacturing techniques, this trend of intelligence will lead to a situation where domestic technical experts fail to acquire true expertise in these processes. This, in turn, will strengthen the monopoly position of foreign-brand machine tools in China. It is by no means an exaggeration either; the status of the machine tool industry is related to **safety**. With Industry 4.0 being so popular in China today, the core technologies behind machine tools are all of foreign origin. Once these machine tools are interconnected, there will be no secrets left in industries such as military manufacturing and aerospace; someone could, from a distance, issue a command that turns your sophisticated factory into a pile of useless scrap metal. Relying on technologies that are not core means spending not only money, but it also leads to an increasingly deeper entanglement in this field! ▌ Why is China’s equipment manufacturing industry behind others? The wisdom of the Chinese is truly remarkable, as everyone in the world knows. Whenever there’s a way to make money quickly without any effort required, countless people will try to find such shortcuts. Real estate in China is incredibly strong; people in the manufacturing sector complain that \"speculating in real estate benefits the country, while industry harms it.\" Look – as soon as new policies are introduced, houses are snapped up at record speeds... In any case, surely no one will be eager to get involved in the equipment manufacturing industry! The equipment manufacturing industry is completely different from the real estate, entertainment, and internet sectors; it cannot succeed just by relying on a single idea. It is an industry that requires long-term consideration, exploration, testing, and accumulation, and it allows no room for impatience. The development of core technologies for machine tool equipment is unlikely to yield tangible results without a decade or more of dedicated research. To produce high-quality machine tool equipment, a large number of technicians are needed – those who dedicate themselves to their work, can endure solitude, strive for excellence, and work diligently throughout their lives. Only by thoroughly mastering the core technologies, making continuous improvements, and constantly innovating can excellent equipment be created. It’s easy to say, but if we go and look at machine tool manufacturers in China, we’ll find that the researchers and engineers involved in technology development are very practical-minded; they need to buy houses and support their families, facing the pressures of supporting elders at home and raising children. With a not-so-high salary, even if one devotes all their effort to mastering technology, they still can’t afford a house. Overwhelmed by the pressures of life, how can they possibly focus on research and development? In machine tool companies, the income generated by those working in technical fields is not as high as that of those in sales or management roles. More and more technical professionals believe that a career in technology has no future prospects; their goal for professional development is to switch to sales or management, or to start their own company to act as an agent for machine tools, or to gather resources and replicate certain technologies in order to manufacture machine tools themselves. Now let’s look at the owners of those machine tool companies; their main concern is whether their businesses can survive. Machining tools are hard to sell, and there are still many people to support; who would invest money in extensive research and development? Looking at those amazing devices abroad, I feel like there’s no way for us to compete; companies should just make some money as soon as they can. Looking at the real estate industry at its peak, one can’t help but feel that choosing this industry was a mistake; although my blood is that of a person from the manufacturing sector, who knows – maybe one day I will give up on it. In such a social environment, can China produce high-quality machine tools? What it reflects is the impatience and value orientation issues within society as a whole! ▌ Is it useful to promote the spirit of craftsmanship and call for the revitalization of industry? As if by a spring breeze overnight, the manufacturing sector began to receive attention at the ** level; the concept of \"craftsmanship\" became a popular term, and the idea of revitalizing industry gained prominence. A wave of enthusiasm for \"Made in China 2025\" emerged in the country. Surely, the ** leaders must have seen through various official reports the flourishing prospects of China’s manufacturing sector! Time is the best test; are these policies, initiatives, and calls truly grounded in reality? We need to check the actual results! If a few master craftsmen from major countries become famous, they end up as celebrities who no longer engage in technical work ； If calling for advocacy in favor of the industrial sector turns into boasting that a certain technology has surpassed foreign levels ； If the benchmark for intelligent manufacturing under \"Made in China 2025\" is the introduction of a large number of foreign intelligent devices ； If **support for the manufacturing sector leads to more low-end manufacturing activities** ； If the core technologies developed at great expense end up becoming brands that are despised by the market… we believe that the policies and guidelines regarding manufacturing at all levels are wise, and everything that is promoted and advocated is excellent! But whether it has been properly implemented is another matter! Without delving into the market, one cannot truly understand the reality of the manufacturing industry. One should listen more to the common, genuine opinions from the people on the ground, and see whether the conditions for our craftsmen have improved Have the benefits improved? How many more people are willing to be craftsmen? Are things easy for manufacturing companies these days? Do manufacturing companies have the ability to improve the benefits for craftsmen? .....Manufacturing is the foundation! Since the new century, China has been known as the \"world’s factory\"; its large labor force, cheap land resources, and relatively developed infrastructure have attracted a great deal of capital from around the world. However, today, the topic of whether foreign capital is withdrawing from China is sparking intense debate. Has the decisive battle for China’s foreign trade already begun? It’s not just our equipment that is being replaced by foreign ones; the issue of whether foreign investment is withdrawing from China has also sparked intense debates. Why exactly are foreign companies leaving China? Who exactly has taken the jobs away from the Chinese? First, China’s production costs are high. In recent years, land costs in regions such as Guangdong have continued to rise, tax incentives have diminished, and the return on investment for foreign firms in China has become increasingly low. Despite the astonishing rise in labor costs, the wage growth rate of China’s workforce has not declined; in fact, it was the highest in the world for several years. This means that foreign investors can reap ever fewer profits in China’s energy sector. Second, the entry barriers for foreign investment policies have been raised, and preferential policies have been abolished. Many regions in China have raised the investment thresholds; for new foreign-funded enterprises, there are not only no special preferential policies, but also high requirements regarding their type of industry as well as energy conservation and emission reduction. Furthermore, in terms of taxation, the “super-national treatment” for foreign-funded enterprises is also losing its validity. Third, China’s labor force is no longer cheap. Due to monetary quantitative easing, prices have risen, which in turn affects food and labor costs; as a result, Chinese labor is no longer as cost-effective. Fourth, market competition is becoming increasingly fierce. In addition to the above reasons, some foreign companies were forced to withdraw from China due to poor management and failure to adapt in a timely manner, such as well-known firms like Nokia and Motorola. There are also many foreign companies that have withdrawn from the Chinese market due to fierce competition and declining profits there. No one wants to lose their job, but the risks of the future are unpredictable. Perhaps each of us should think carefully about what to do if we suddenly lost our job one day Manufacturing is the **foundation! Only the manufacturing sector can truly create wealth. If there are problems in **manufacturing, the machine that creates wealth will be severely hindered; that’s why manufacturing is the root of a tree, and it is the foundation of **. Undoubtedly, the United States is returning to manufacturing, and Cao Dewang’s departure is a cause for concern. There are a series of issues that deserve reflection from each of us, such as the issue of excessive taxes that has been widely discussed in the media recently. Let’s compare the tax rates around the world; in China, the income tax plus value-added tax results in a tax rate of around 30 to 40 percent. The United States, which is in second place, has a rate of 35%, and it is now set to drop to 15%. The significant tax cuts in the United States have had a major impact not only on China but also on the whole world. Therefore, British Prime Minister Theresa May decided at the end of last year to reduce the corporate tax rate in the UK from 20% to 17%. Germany and France have also protested to the United States, arguing that such tax cuts would deal a severe blow to their companies. Whether it’s Cao Dewang or Terry Gou, they choose to set up factories in the United States rather than in Europe; therefore, it is necessary to understand our competitors. Take tax burden figures as an example: the proportion of social security contributions in wages is 40% in China and 15% in the United States ； In terms of the overall tax burden, it is 38% in China and 25% in the United States ； Corporate income tax: 25% in China, 15% in the United States ； Value-added tax: 17% in China, 0% in the United States. Manufacturing is the foundation of **; in the future, the greatest amount of resources, the most effort, and all attention should be devoted to the development of manufacturing. Manufacturing is the foundation of a nation; it is the only way for China to overcome economic downturns.