In the past two years, with the increase of labor costs, the export price advantage of medium and low-grade standard tools will be gradually lost, and the export volume will be reduced accordingly. If tool enterprises continue to focus on the production of traditional standard tools, then sales will gradually shrink (some private small tool factories mass production of traditional standard tools, large tool factories due to higher costs, unable to compete and gradually lose this part of the market), there will be no future for development. Therefore, China's hardware tool industry must change its concept, vigorously develop the production of high-efficiency and advanced tools, replace foreign products with domestic high-efficiency and advanced tools, recapture this part of the market occupied by imported tools, and attach importance to after-sales production services. Only in this way can China's tool enterprises have a bright future and China's tool workers have a bright future. Industry can be revitalized.

The general situation of machinery manufacturing industry in recent years, China's manufacturing industry has been sustained and rapid development, China has become a manufacturing power: the world is importing a large number of Chinese products, and China's exports, mechanical and electrical products have accounted for the majority. In the current economic cold wave and crisis, although the machinery industry has been greatly affected, but the total size and output is only second to the United States, surpassing Japan, ranking second in the world, exports have exceeded Germany, ranking first in the world, 2009 China's automobile production has surpassed the United States and ranked first in the world. China has become a world famous manufacturing power. China ranks third in the list of the 10 largest manufacturing powers published in the 2010 Global Manufacturing White Paper. In this year's World Machinery 500, the United States ranked first with 126 enterprises, Japan ranked second with 124 households, and China ranked third with 77 households. But this year, none of the top 10 of the world's top 500 machinery, China was selected; of the world's top 100 machinery, China was only selected in 9. It should be recognized that China's manufacturing industry is large but not strong, although it is a manufacturing power, but can not be called a manufacturing power. For example, iron and steel, we export large quantities of cheap steel products and import high value-added alloy steels. The machine tool is also a cheap and cheap machine tool, and imported expensive CNC and precision machine tools.

In recent years, although China's hardware and tools industry has developed rapidly, it is far behind the development of the machine tool industry. Most of the highly efficient and advanced cutting tools used in production are imported from abroad (including those produced by foreign-funded enterprises in China). We now export many cutters, but mainly cheap and low-grade standard cutting tools. In 2004, China produced about 2.5 billion cutters, of which 2 billion were cheap and low-grade cutters (most of which were exported). In the next few years, the export was still basically medium and low-grade cutters. Medium-sized twist drills cost about $10 each in the U.S. market, while low-grade Chinese-made twist drills cost just $1 and are used as hand tools. China now has the world's largest automotive industry, but the automotive industry imported from foreign efficient production lines, the tool used by 80% - 90% of the tool is still imported (including domestic foreign enterprise products). At present, China's cutting tool production, supply and marketing situation is that high-end advanced cutting tool products mainly rely on imports from abroad, and low-grade cutting tool products malignant expansion (most exports), this situation must be changed as soon as possible. Standard cutting tools are widely used in China's machinery manufacturing industry, while advanced cutting tools with high efficiency are widely used in developed countries. As a result, the machining efficiency of China is far lower than that of foreign countries. China's hardware tools factories still produce large quantities of traditional standard tools, and some small tools factories also produce large quantities of low-grade tools. According to statistics, China consumes 40% of the world's tool materials, but its sales revenue accounts for only 12%-15% of the world's tool industry. The gross margin of foreign tool enterprises is about 40%, while the profit of our tool factories is very low, and some tool factories are still losing money. At present, the tool factories in China mainly produce large quantities of traditional standard tools. From the technical development trend of mechanical manufacturing industry, the proportion of high-efficiency CNC machine tools will increase year by year in China's factories, the demand for high-efficiency advanced tools will increase rapidly, and the demand for traditional standard tools will decrease year by year.

The labor productivity of China's manufacturing industry is only 1/3 to 1/5 of the US and Japan. Many of China's machinery products are cheap, but the quality is low. Recently, due to the rapid appreciation of the RMB and domestic labor costs, coupled with economic chills and crises, seriously affecting the export of low-grade products, but also forced us to improve the technical level of machinery industry as soon as possible, turn crisis into opportunity, to forge ahead to the manufacturing power. The rapid development of China's machinery manufacturing industry from 2000 to 2008, the rapid development of China's machinery manufacturing industry, automotive, machine tools, shipbuilding, power generation equipment, not only the rapid growth in output, but also constantly improve the level of products. The market share of domestic machine tool output value was 56.3% in 2007, 61% in 2008 and 70.1% in 2009. In 2008, China's machine tool industry ranked first in the world with 19.44 billion US dollars in consumption, 13.96 billion US dollars in production, the third in the world, 2.11 billion US dollars in export, the sixth in the world, 7.59 billion US dollars in imported machine tools, ranking first in the world, and the import and export of machine tools exceeded 5.48 billion US dollars. In 2009, the growth rate was reduced by the cold wave of the world economy, but the impact on foreign countries was even more serious. Last year, China ranked first in the world in manufacturing machine tools, importing 5.9 billion US dollars, exporting 1.41 billion US dollars, importing and exporting more than 4.49 billion US dollars, and importing and consuming machine tools ranked first in the world for eight consecutive years. In 2007, the output of CNC machine tools in China was 123257, an increase of 32.6% over 2006. In 2008, China's CNC machine tools were affected by the world economic crisis, the output of 122,211 sets, compared with 2007 is basically the same. Two thousand and eight