The Impact Of Sino-US Trade Warfare On The Machinery Manufacturing Industry

The impact of Sino-US trade warfare on the machinery manufacturing industry


The overall impact of US tariffs on China's machinery industry: At present, the machinery industry is directly affected by only two high-end technology industries, modern railway (high-speed rail) and industrial robots. The impact of the container industry is slightly reduced (increased by world trade). Speed down impact). It is not ruled out that the United States will further expand the scope of the tax increase industry (the low-end manufacturing industry also increases taxes). According to the China Customs Statistics Department, China’s machinery and equipment (excluding electrical equipment) in the US export industry accounted for about 6.4% in 2016. It is the sixth largest export industry in the industry, and China’s exports to the United States are absolutely large. Some are low-end and cost-effective products. At present, the United States mainly focuses on compulsory technology transfer and intellectual property protection in Sino-US trade. The tax increase industry mainly involves high-end technology industries such as aviation, modern railways (high-speed rail), industrial robots, new energy vehicles, and high-tech industries. However, the definition of the taxation industry announced by USTR is rather vague. After 15 days, the list of confirmations will be published. It is not excluded that the United States may increase taxes on low-end manufacturing in China.

If the trade war is opened, China will increase the import tariffs on US machinery products, or it will speed up the import substitution of domestic high-end equipment. This may be an opportunity for the development of domestic high-end equipment. After nearly two decades of industrialization and globalization, China has the foundation of advanced manufacturing technology and industrialization, and entered the stage of engineer dividends. In the 1950s, the Soviets also sanctioned China, but China created its own atomic bombs and hydrogen bombs. Building China's heavy industry system and preparing for China's future heavy industrialization. China is currently the world's largest production base for port machinery, containers, ships, high-speed rail equipment and nuclear power equipment. Industrial changes are not diverted by individual or national will. In addition, most of the high-end equipment parts are imported from Japan and Germany, such as robotic reducers, CNC machine tools and robot control systems, high-end hydraulic parts, high-end car chassis, etc., which are less affected by the Sino-US trade war. Of course, Sino-US technical cooperation and the acquisition of US companies will be affected, which is not conducive to the development of China's manufacturing industry.

If the United States expands its tax increase to China (which also imposes tax on low-end manufacturing), its short-term impact on low-end manufacturing exports will also affect China’s exports, investment, acquisitions, and technical cooperation, and GDP growth may decline. It may also indirectly affect other machinery industries. For the United States, if China loses China’s largest market, it will also suffer heavy losses. Therefore, we believe that this kind of loss is a small probability event, and it is still the stage of negotiation and psychological warfare. In the 1980s, there was a trade war between the United States and Japan. As of 1989, the US trade representatives launched a total of 24 cases of 301 cases in Japan, which made the Japanese government make corresponding concessions. However, after the 1980s, Japan’s position in the global manufacturing industry improved. .

1. Analysis of the impact of Sino-US trade war on various sub-sectors of machinery

1. High-speed rail equipment field: Statically, the actual impact on revenue is small, but it is more difficult to expand the US high-speed rail market. According to the statistics of the General Administration of Customs of China, in 2017, China’s railway vehicles, rail equipment and signal equipment exported US$ 3.186 billion to the United States, accounting for 29.10% of China’s total exports, and US imports amounted to US$ 38 million, accounting for Chinese imports. 4.93%. China’s exports of nearly $3 billion worth of rail vehicles, rail equipment and signal equipment to the United States are likely to face a 25% tariff penalty.

Statics have less impact on income. At present, there are not many enterprises that export modern railway equipment to the United States and other developed countries. It is basically limited to the whole machine factory China CRRC (the world's largest rail transit equipment manufacturing enterprise), and all core component manufacturers are mainly based on the domestic market. Both exist in the form of passive exits (full vehicle exports for supporting vehicles). In the third quarter of the year, 17 years ago, CRRC's overseas business income was 13.018 billion yuan, while CMB's international business orders were 93.7 billion yuan, including 244 billion yuan for locomotive business, 5.8 billion yuan for motor vehicles, 3 billion yuan for passenger car business, and 2.7 billion yuan for truck business. The urban rail and urban infrastructure business was 53.2 billion yuan, the new industry and the other 4.6 billion yuan, and the proportion of motor vehicles was only 6.2%. In recent years, CRRC has not exported motor trains to the United States. The orders are mainly subway vehicles and locomotives. In October 2014, the first order signed by CRRC and the United States--the order of 276 subways in Boston totaled 567 million US dollars. In 2016, the company won the bid for the US$1.3 billion subway vehicle order in Chicago, etc. As of the end of October 2017, the total number of subway orders in the US was 1,579, which was about US$3.15 billion. However, these vehicles are mainly in the future. The Springfield plant, the first manufacturing base invested and built by the United States, was completed. The Springfield plant was officially started in September 2015. The major orders in the United States were assembled and assembled by the Springfield plant. The 284 subways in Boston will be delivered in 2018. "The actual impact on the car can be small.

It is more difficult to expand the US high-speed rail market. The countries that currently produce high-speed rail in the world are mainly China, Japan, Germany and France. China has mastered the core technologies of tunnel technology, track technology and bridge construction. Whether it is design speed or operating mileage, China's high-speed rail is already in the forefront of the world. . However, the cooperation between China and the United States in the field of high-speed rail has not been substantive. The US West Express Line high-speed railway was originally planned to be the first high-speed railway project built by the United States in the United States. On September 13, 2015, it was connected with China and the United States. The company (XpressWest) signed an agreement to form a joint venture company in Las Vegas, USA. However, on June 9, 2016, the US West Express unilaterally announced the formal termination of China Railway International (USA) Co., Ltd. for the construction of the US high-speed passenger railway. All the activities of the joint venture company, Xu Hongcai, director of the Economic Research Department of the China International Economic Exchange Center, said that the main reason for the US companies to terminate the high-speed rail cooperation project is that the US federal government requires high-speed rail to be built in the United States. Since then, China has not had any other substantive cooperation with the United States in high-speed railway cooperation. If this trade war is officially launched, it will undoubtedly be more obstacles for China to open up the US high-speed rail market in the future.

From the perspective of core component imports and technical cooperation, the impact is small. According to the data of CRRC's 2016 annual report, the value of the high-speed rail and other rail equipment is 33% for the car body, 9% for the bogie, 13% for the traction system, 20% for the brake system, 9% for the network control system, and 7 for the air conditioner. %, auxiliary power supply system 5%, other 4%. The technology of China's motor train manufacturing originated from Japan, Germany and France, and it has been continuously digested and innovated on the Japanese-German high-speed rail technology platform, and has less technical cooperation with the United States. In January 2017, China's fully-developed China Standard EMU "Revival" EMU officially qualified for commercial operation. On June 26th, it officially launched in Beijing and Shanghai. At present, the Fuxing is already in Beijing, Shanghai and Shanghai. Many lines such as Hangshen and Shenzhen have been put into operation. China has once again become the country with the highest speed of commercial operation of high-speed rail in the world. At present, the revival is improving its product line, and it will become the only standard for China to export high-speed rail to the world. Therefore, this trade war is against China. The manufacturing impact of high-speed rail equipment is small.

2. Industrial robot field: China's domestic ontology income is 5 billion yuan, and exports are less than 300 million yuan, affecting industry income of less than 30 million, very limited. In 2017, the national industrial robot sales volume is expected to reach 110,000 units (2016 sales of 87,000 units), accounting for about 33% of the global total sales. However, the sales volume of domestic robots is about 40,000 units, and the total revenue is about 5 billion yuan. The market share is only about 30%. Especially the high-end ones are almost all imported. The four major families of robots have a total share of over 50% in China. Due to the backward level of technology, China's robot exports are few, only a small number of AGV and four-axis robots are exported to developing countries such as Southeast Asia. The total export volume is less than 0.5 million units in 2017, and the average unit price is less than 60,000. The amount is less than 300 million yuan, and there is basically no export to the United States. The impact of the trade war is very limited, affecting the industry's income within 30 million. However, the acquisition of US robotics companies or technical cooperation by Chinese companies will be seriously affected, especially if China increases the tariffs on imported parts and components, and will increase the import tariffs of foreign industrial robots, the domestic market share of domestic industrial robots will increase, which will benefit the development of the industry. .

3. Construction machinery: It is estimated that the industry's exports to the United States account for less than 5%. The imported parts are mainly from Japan and Germany, and are less affected by the Sino-US trade war. In 2016, China exported US$1.8 billion to the US, accounting for 10.8% of all exports (the largest export market), accounting for 4.4% of the total output value of China's construction machinery industry. The imported parts of the construction machinery industry are mainly hydraulic parts for excavators and chassis for pump trucks. These are mainly imported from Germany and Japan, and are not affected by the Sino-US trade war.

Sany Heavy Industry: It is estimated that the US revenue in 2015 will be 500 million yuan, accounting for less than 1.5%. The major overseas customers are Latin America, India and Southeast Asia, which are less affected. Sany’s overseas income is 6 billion from Putzmünster, Germany. Global sales (mainly Europe) are not affected by the Sino-US trade war; there is no US imported parts, and Cummins engines are used for individual export. Xugong Machinery: In 2017, the export volume was 6 million US dollars, and the Group's excavators totaled 20 million US dollars. The export accounted for less than 1%, mainly exporting the Belt and Road countries; there is no US imported parts. Liugong’s sales in North America accounted for less than 1%. Hengli Hydraulics, a core component, accounts for 30% of overseas sales, and major customers account for 30%-40% of exports. It is estimated that US revenue accounts for about 10%. Eddie Precision's overseas revenues account for about 12%, and the United States is estimated to account for about 5%. Zhejiang Dingli's US revenue accounted for about 15% of the aerial work platform industry, and Zhejiang Dingli's strategy is to vigorously open up the US market, which may be greatly affected. Hangchai Group's overseas revenue accounted for about 17%, and it is exported to North America and Europe. The United States is its third largest market (about 3%). It has a holding subsidiary in the United States and a multi-faceted layout, which will also be affected. Anhui Heli’s exports to the United States account for only 10 million yuan, about 1,000 units a year, with little impact.

In the United States, Caterpillar's revenue in the Asia-Pacific region accounts for as much as 20%, which is greatly affected by the Chinese market. It can be seen that the US in the construction machinery industry is more dependent on the Chinese market.

In terms of acquisitions, China's construction machinery industry leaders made overseas mergers and acquisitions before and after 2011. At present, the production capacity and technology level have matured, and most enterprises have no plans to expand.

4. Container segment: CIMC is the only supplier in the world that can provide a full range of container products. The production and sales of standard dry cargo containers and tank containers remain the first in the world, accounting for about 50% of the total, and Singamas container accounts for about 20%. Xinhuachang accounts for about 8-10%. CIMC's North American business accounted for less than 10% of revenue, mainly based on some basic equipment (low value-added products), and these products have completed industrial transfer in the United States. However, container demand is linearly related to the economic environment such as import and export trade. The long-term market demand fluctuates around 2 million cases/year. If this trade war starts, it will be affected. CIMC's current profitability and prospects are in the road transport vehicle business segment, with revenue accounting for approximately 25% (absolute amount of approximately RMB 20 billion). It promotes three major products: van, skeleton and refrigerated trucks overseas. The combination accounts for about 10% of the world. In 2015, the US market share ranked fifth, mainly based on road logistics. From the perspective of the revenue structure of the business, the North American market accounted for 26%, Europe 13.5%, emerging markets 8.3%, and China's revenue 54%; but net profit contributed 41%, 6.8%, 7.1%, 45%, respectively. The United States currently only makes trailers, but the order growth is more obvious, and the company has a clear arrangement to increase the product line. Although CIMC follows the market development ideas of localized enterprises, it has a global factory and has two factories in the United States. The domestic Mr. produces six large parts and then transports them to a North American factory for installation and sales. However, the road vehicle business in the North American market is profitable. The ability is good, and the trade war will have a certain impact on the profit of the business of CIMC.

5, textile machinery: Saurer smart mainly in Asia and Europe as the main market (total 90%), the United States accounted for about 4%; Jack's main market is developing countries, the United States accounted for less than 5%, textile machinery Exports are mostly directed to developing countries, and there are not many exports to the United States. Some of Saurer's smart textile machines are exported to the United States, but it is known from the company that it is less affected.

6, 3C automation equipment: should be good for domestic enterprises.

Among the machinery companies, there are mainly two types of companies that provide equipment for the downstream electronics industry. One is a company that supplies equipment for consumer electronics manufacturers such as smart phones, including display panel modules, Zhiyun shares in testing, and joint equipment. Fine-measuring electronics, East China Heavy Machinery in the field of glass processing, wisdom Songde, Tanaka Seiki, etc.; and one is the company that supplies equipment for semiconductor chip manufacturers, such as Zhichun Technology, Changchuan Technology.

For consumer electronics companies, the impact of the Apple industry chain is likely to be large. The production and assembly of parts for most iPhones is completed in China. However, the impact on the Apple industry chain, especially in the midstream, should not be significant. On the one hand, it is not yet determined whether the iPhone is an imported product. China's apples account for a relatively high proportion of enterprises. The direct shippers are assemblers such as Foxconn. Foxconn is assembled into products and sold to Apple. If the tax on the finished product is taxed, it will have an impact on Apple's profit margin or share. On the other hand, Chinese companies only earn a small amount of processing and assembly costs and some parts and components, while the United States has huge profits from design and marketing. The total cost of an iPhone X component is about $370, and the added value in mainland China is only 3%-6% of the cost, less than $30.

Among the 3C equipment companies in the machinery industry, the main customer of Fine Measurement Electronics is BOE. At this stage, the relationship with Apple is very small. Zhiyun shares and Liande equipment mainly enter Taiwan through GIS and TPK in Taiwan, and should not be affected. However, East China Heavy Machinery and Smart Songde have not yet entered the Apple industry chain. Tanaka Seiki mainly provides winding equipment through Lixun Precision, but only Tanaka can provide related equipment. Therefore, on the whole, the trade war should have less impact on the Apple industry chain, and it is even more limited for the equipment enterprises in the middle reaches.

The import or impact of integrated circuits has little impact on equipment companies. In 2017, China's IC imports amounted to US$260.14 billion, of which nearly 50% came from the US. If the trade war starts, the IC industry may be affected. For semiconductor (integrated circuit) equipment companies, the main customers of Zhichun and Changchuan are domestic semiconductor companies represented by SMIC. If the import of trade war chips is affected in the future, it will force domestic semiconductor companies to accelerate the pace of production and accelerate. The replacement rhythm of equipment imports should be good for domestic equipment companies.

7. Hand tools: Superstar technology relies on the United States. The US revenue ratio is estimated to be 60%-70%, which is affected by certain factors. However, the superstar's hand tools and American companies are misplaced and should not be within the scope of sanctions. Bigger.

8. Oil and gas equipment: Jereh shares have been affected, mainly in overseas markets including Russia, the Middle East and the United States, 201