Looking at China's machine tool market from the macroeconomic environment

In 2006, the macroeconomic environment faced by China's machine tool market is still relatively good. According to the prediction of the Chinese Academy of Social Sciences and the National Information Center, the growth rate of China's GDP in 2006 will be slightly lower than that of the previous year. The forecast is close to 9%. The Chinese economy will Continue to maintain rapid growth.

In 2006, we continued to implement a prudent monetary policy and paid attention to controlling the rebound in the scale of investment in fixed assets. The Chinese Academy of Social Sciences predicts that the scale of fixed asset investment will exceed 10 trillion yuan in 2006, but the actual growth rate will fall by 3.6 percentage points from 2005. Some forecasts that only 1 percentage point will fall. In short, the growth rate of fixed asset investment will be higher than that of the previous year. A moderate fall is the consensus of the majority. Machine tools are typical capital goods, and changes in fixed asset investment will directly affect the rise and fall of China's machine tool market.

The macroeconomic regulation and control policy in 2006 will fine-tune some phenomena in the economic operation and continue to implement the principle of “guarantee, pressure, and treatment”. The state will revitalize the equipment manufacturing industry and improve its manufacturing level and capabilities, which will inevitably increase the technological transformation of the equipment manufacturing industry. Machine tools are the basic technological equipment of the equipment manufacturing industry, which is conducive to expanding the market demand for machine tools. However, it should also be noted that in 2006 the country will adjust the overcapacity problem in some industries, involving the largest user industry automotive industry in machine tools. According to reports, the current car production capacity of 8 million vehicles, more than 25% of demand, construction capacity of 2.2 million, is brewing and planning capacity of 10 million, obviously adjustment is inevitable.

Although the International Monetary Fund and other organizations predict that the world economic fundamentals and the international trade environment will be good in 2006, the National Information Center's forecasting department considers domestic and foreign factors and believes that China's commodity exports in 2006 will shift from unconventional growth to steady growth, but Will still maintain a certain growth rate. In the past two years, the export of machine tools has also experienced an extraordinary growth of more than 40%. Due to the influence of the foreign trade environment (including the pressure of continued appreciation of the renminbi), its growth rate may also have a certain decline this year.

In 2005, the growth rate of foreign direct investment has slowed down significantly. The situation in 2006 is not expected to increase much. However, many favorable factors for domestic use of foreign capital still exist. Foreign direct investment will still be at a high level of over US$59 billion due to foreign investment. Direct investment currently accounts for 60% of machine tool imports, and it will support the 2006 import of machine tools to remain at a high level.

In general, the macroeconomic environment in 2006 is still conducive to maintaining the upward trend of the Chinese machine tool market, but it must not lose sight of the slowdown in fixed asset investment and foreign direct investment growth and the negative impact of overcapacity in the automotive industry on the machine tool market.

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