China’s machinery production is growing at a slightly slower rate in 2018 than that it did in 2017, but the industry is exhibiting strong growth of 7.9 percent. Machinery production in China will continue to rise at a compound annual growth rate of 7.6 percent from 2018 to 2022.
Kerry Knudsen of Wood Industry US recently said “China had a different cultural perspective on business, and it wasn’t exactly cooperative, it was more predatory.” He recalls many years ago at Ligna watching a group of people he identified as Chinese, working other manufacturer’s machinery booths. They would go on the booth as a group of seven to 10, and while the main force of the group engaged the booth staff, one of the fellows was on his back under the machines taking pictures. Kerry assumes it was not for National Geographic. Supplier’s Phil Ashley recalls a story about a machine shipped to China where the machine shifted in the crate and a protruding bolt punched a hole in the machine frame. When the copy came off the production line the hole was reproduced exactly as it had been punched in the shipping crate. However, times have changed.
IHS Markit is the leading source of information and insight in critical areas that shape today’s business landscape. HIS Analyst Teik Chuan Goh reports that in 2018, the Chinese government issued a series of favourable policies to promote the development of its manufacturing industry. For example, the country’s strategic “Made in China 2025” program, which encourages enterprises to use high-end machine tools. As of April 2018, China’s Ministry of Industry and Information Technology had founded about 60 provincial manufacturing innovation centres. At the same time, the government’s implementation of comprehensive tax cuts for productive enterprises provided support for machinery manufacturers.
Recently a number of high-end woodworking machinery manufacturers have invested in Chinese production plants. Working under German and Italian supervision; these factories are adding to the collective knowledge of Chinese firms. The recent purchase of a controlling stake in Masterwood by KDT is an example of the strength of the Chinese industry. In 2015, global trade of sawmill and woodworking equipment was valued at approximately US$44.2 billion and is a critical enabler for construction and manufacturing. The top Woodworking Machinery Exporters 2015 were Germany (4.5 billion); China (2.5 billion); United States (1.95 billion) and Italy (1.85 billion). China’s wood working manufacturing sector has in the past relied on the production and sale of lower value-added products but though policies such as the ‘Made in China 2025’ initiative the Chinese manufacturing economy has modernised and companies like KDT are examples of what Chinese manufacturers are capable of.