Overview of the Economic Operation of the Machinery Industry in 2023
2023 is the year of full implementation kickoff of the spirit of the 20th National Party Congress of the CPC. It is also the year of economic recovery and development after three years of transition in the prevention and control of the new crown epidemic. Facing a complex and severe internal and external situation, the machinery industry adheres to socialism with Chinese characteristics in the new era as the guide, consciously implements the decision of the CPC Central Committee and the deployment of the State Council, overcomes difficulties, works hard and makes progress. High-quality development has made solid progress. The main economic indicators throughout the year achieve stable growth, playing an important role in promoting the stable development of the manufacturing sector and even the industrial development of the country. Looking ahead to 2024, the machinery industry will have opportunities and challenges, but the favorable conditions are stronger than the unfavorable factors. The annual economic operation is still expected to maintain an overall stable and progressive trend.

I. Basic characteristics of the industry's operation in 2023.
(i) The industry scale has reached a new level.
(ii) The growth rate of value-added is higher than that of the national industry.
(iii) The production and marketing situation of products is polarized.
(iv) Stable growth in efficiency indicators.
(v) Generally speaking, a high growth rate of investment.
(vi) Foreign trade has steadily increased to a new level.
(vii) The industry is operating in an expansion zone.

II. Highlights in the industry's development.
(i) Strategic emerging industries leading the innovation and development of the industry;
(ii) Accelerating the cultivation of new green development driving forces;
(iii) Steady progress in innovation led by important equipment;
(iv) Accelerating the cutting-edge intelligent development;
(v) Continuing the upgrade in the structure of export trade.

III. Difficulties and problems in the industry's operation
(a) Weak market demand for orders;
(b) The continuation of the problem of difficult recovery of accounts receivable;
(c) Downward pressure on prices squeezing profit margins;
(d) Increasing uncertainties in the foreign trade market;
(e) Downward pressure on the uneven development of part of the industry.

IV. Forecast of the trend of the machinery industry in 2024
Looking ahead to 2024, the machinery industry still faces a complex internal and external environment. From an international perspective, the world is in turmoil, the century's change is accelerating, international political disputes and military conflicts are breaking out in multiple places, and the growth of the world economy and international trade is insufficient. In addition, developed economies are demanding diversification of the supply chain, trade protectionism prevails, and the game among major powers in key areas has intensified. The foreign trade market of the machinery industry faces more uncertainties and greater downward pressure.

From a domestic perspective, there is still a lack of effective demand in the macroeconomic environment, weak social expectations, not strong investment willingness, consumption not meeting expectations and other issues. Some industries have overlapping layouts, competition, and price undercutting, etc. But the overall recovery of China's economy and the basic long-term trend remain unchanged, supporting the high-quality development of the machinery industry, and favorable factors continue to accumulate more. First, the central economic work conference emphasized that the economic work in 2024 must adhere to stable progress in order to promote stability, first establish after the interval, strengthen the counter-cyclical and cross-cycle adjustment of macro policies, and increase the consistency of macro policy guidance. Second, interest rate reductions, tax cuts and other macroeconomic policies and a series of stable growth industrial policy effects will continue to be released. The policy stock and incremental policy will overlap in strength, effectively improving the development environment of the machinery industry, increasing market confidence and further unleashing market potential. Third, major projects, key projects and new infrastructure will further accelerate substantial construction. Rural revitalization and new urbanization, and the development of regional major strategies and other initiatives will be further implemented, which will release greater market demand for the machinery industry. Fourth, the new round of scientific and technological revolution and industrial transformation will bring new development opportunities. The new generation of information technology and the deep integration with traditional industries, and green development will promote the accelerated transformation of production and consumption. This will provide more development space for the machinery industry and accelerate the pace of high-quality, intelligent and green transformation of the machinery industry.

(ii) Forecast of the operational trend of the industry.
Overall, the development of the machinery industry in 2024 has both opportunities and challenges, but the opportunities are greater than the challenges, and the favorable conditions are stronger than the unfavorable factors. Based on a comprehensive judgment, it is expected that the annual economic operation of the machinery industry will continue with an overall stable and good trend. It is expected that the growth rate of the main economic indicators will be higher than 5%, and foreign trade will maintain basic stability.

Small and Medium-sized Motor Industry. In 2023, production and sales increased slightly year-on-year, and the growth rate narrowed; the total profit of the industry increased year-on-year.

According to the statistics of 61 domestic motor manufacturing enterprises: the production and sales of the industry grew year-on-year, with narrowed growth; the profits of the industry grew year-on-year, with a large increase in the first quarter, and a gradual narrowing of the annual growth in the first half and the first three quarters compared to the first quarter and a slight increase compared to the first three quarters; export and sales revenue decreased year-on-year; the average purchase prices of some main raw materials were running high; the inventory at the end of the period remained flat year-on-year, and the accounts receivable decreased slightly; the average overall economic efficiency index increased year-on-year. The average overall economic efficiency index of the industry increased year-on-year.

I. The production and sales of the industry had a slight year-on-year growth, but the growth pace decreased.

II. The total profit of the industry increased year-on-year.

III. The production, sales and export revenue decreased year-on-year.

IV. High average prices for the purchase of some main raw materials.

V. The inventories at the end of the period remained stable compared to the previous year, and the accounts receivable decreased slightly.

VI. Year-on-year increase in the average comprehensive economic efficiency index of the industry.

VII. The industry members in the total number of classification indicators (for reference only): industrial added value, sales revenue, total return, total profits, per capita income, owners' equity capital. Six indicators simultaneously led to the growth in profitability of 12 companies, with a year-on-year decrease of 4 respectively: Wolong Holding Group Limited, Zhuhai Kaibang Electrical Machinery Manufacturing Company Limited, Jiangsu Dazhong Electrical Machinery Company Limited, Harbin Electric Power Equipment Co. Ltd., Jiangchao Electric Technology Co., Ltd., Shanxi Electric Manufacturing Co., Ltd., Jiangsu Shangqi Group Co., Ltd., Fujian Yanan Technology Co., Ltd., Jiangsu Weiteli Electric Co., Ltd., Zhucheng Kaiyuan Energy Saving Technology Co., Ltd.

Final Comments

According to the expectations of the industry carried out by the China Machinery Industry Federation, the quarterly research on the medium-sized motor industry showed that: the start of business activities in 2023 should be better, with more confidence and stability in the first quarter; by the end of the second quarter, about half of the companies experienced a decline in revenue and total profit, and more than half of the companies did not have sufficient orders for the second half of the year; in the third quarter, there was a shortage of orders.