CHICAGO (Sept. 19, 6:35 p.m. EDT) — China's trade surplus hit a new high of $14.5 billion in June, but it's a different story for plastics machinery.
While fostering exports of plastics machinery and molds, as showcased in June at NPE 2006 in Chicago, China remains a net importer of plastics machinery with foreign-branded presses dominating the market.
“The money spent on imported machines is more than three times the export sales,” said Dai Zhongrao, executive vice director in chief of the Beijing-based China Plastic Machine Industry Association. Imported machines represent the majority of the Chinese market, he said.
On a dollar basis, imports have been growing 26.1 percent annually over the past five years.
For dies and molds, despite the active role of Chinese toolmakers in global outsourcing, exports in 2005 amounted to only half of the $1.1 billion in imports.
China exported about $800 million of plastics machinery in 2005. Although the figure skyrocketed by 66.9 percent per year, Dai said “it started low, so the actual amount is still pretty small today.”
Thanks to the twice the gross domestic product-rate growth of China's plastic processors, demand for machinery continues to growth strongly. Machinery output values more than doubled in the past five years, averaging at a 23.3 percent annual rate.
Dai said 2005 was the most sluggish year, due to steel price hikes and other cost increases. But it still rose 15.5 percent from 2004.
About 1,000 Chinese enterprises make plastics machinery, Dai said, but more than 60 percent of them are quite small.
“Three fellows can start up a machinery shop,” one reader comments in the plastics machinery forum of China's popular business-to-business Web site www.alibaba.com.
“The Chinese plastic machinery industry still lags behind from meeting the needs of the rapidly growing national economy,” Dai said.
He believes that pretty soon, domestic press makers will catch up and divide the market evenly with foreign companies.
“The half-half market position will last for a while,” Dai predicts.
Injection presses represent more than half of the production and sales of the entire industry. The largest end market, “light industry,” includes consumer products, apparel, footware, toys, and sporting goods, followed by packaging, agricultural, electrical and electronics, construction and automotive.
China's total output value for dies and molds was 24 billion yuan ($3.01 billion) in 2005, up an average of 17.4 percent annually in each of the past five years.