Where will Chinese die-casting factories go under the epidemic?
- Date：2022-07-08
- Read：620
Where will Chinese die-casting factories go under the epidemic? Why is the Chinese market so attractive to the automotive industry? What impact does this trend have on China's die-casting factories and die-casting industry outside Asia? This is a challenge and opportunity for non Chinese die casting factories.
One third of the world's motor vehicles come from China, which has greatly affected the development of China's die casting plants.
01. What impact does the epidemic have on China's economic situation?
It is generally expected that the impact of the epidemic on China's GDP growth in the first quarter will be 2-3 percentage points, and the impact on annual growth will be about 0.5 percentage points. When the epidemic is under control, suppressed consumer demand and production will show a V-shaped recovery. It is estimated that the GDP growth rate in 2020 can be slightly adjusted to 5.5%.
02. Negative impact of the epidemic on the global supply chain
In the face of the outbreak of the epidemic, the weaknesses of the global supply chain are obvious, but the interests of all countries are deeply intertwined, and it is neither realistic nor wise to prevent globalization. Now is the right time to consider the timeliness and zero inventory manufacturing concept of automobile and other industries. China plus one strategy can also become a procurement option for diversified supply chains.
03. What measures will China take to stimulate the economy?
According to the analysis of the economic impact of the epidemic, the measures for China's economic recovery after the end of the epidemic will be based on the following aspects:
(1) Invest in new infrastructure
In order to stimulate economic development, a large-scale increase in investment in traditional infrastructure will be a good policy choice. The new infrastructure will involve the construction of 5g base stations, data centers, etc.
(2) Tax reduction
In order to enhance the vitality of enterprises, especially small and medium-sized enterprises, the government will work with enterprises to overcome difficulties and get rid of the economic crisis.
(3) Subsidize low-income groups
After the epidemic is effectively controlled, it is expected that the government will gradually introduce some loose policies to stimulate domestic consumption.
Since 2010, China's GDP growth rate has been declining. This steady decline is considered to be the result of the fundamental adjustment of the Chinese economy by the government. It is suggested that the future economy should not rely on exports, heavy industry and debt financing investment, but on stronger domestic consumption, innovation and services.
It is predicted that by 2049, China will change from the world's largest producer to the world's leading technology country. This development will be mainly driven by the transformation of industrial structure, innovation and class improvement.
At present, global automobile production has shifted to Asia. The overall conditions of 1.4 billion consumers, such as rapid economic growth, rapid urbanization, continuous income growth, extensive supply chain development, favorable infrastructure, and low car ownership per household, have made China's auto industry continue to flourish.
04. China's die casting industry needs continuous progress
One of every three motor vehicles comes from China, which also affects the development of China's die casting plants. China's automobile industry has developed rapidly and has become the most important application field of castings. By 2016, the use of castings in the automotive industry accounted for nearly one third of the total domestic demand for castings. China's die casting industry is large but not strong, and the overall innovation is insufficient, which represents the bottleneck of domestic engine and high-quality casting production.
China's die casting industry faces four major challenges:
(1) Due to the large number of small enterprises, it is difficult to achieve the effect of economies of scale.
(2) The quality of castings often does not meet the requirements of industry standards.
(3) The equipment and technical level of the enterprise need to be improved.
(4) High energy consumption in the production process.
Chinese die-casting factories must take necessary measures in many fields to quickly realize modernization and improve global competitiveness. These challenges also bring opportunities to die-casting factories outside China: complex auto parts are difficult to die-casting accurately, which puts forward higher requirements for the production of the entire die-casting industry, which means that quality is often more important than quantity. Therefore, die casting plants outside China need complex professional technology, intelligent machines and systems to produce complex castings.
05. Key industries to promote the development of light metal industry
China's economic growth is driven not only by the automotive industry, but also by aerospace, high-tech ships, railway equipment, medical devices, agricultural machinery and other industries. Among the important drivers of made in China 2025, light metals are indispensable because of their particularity.
One third of the world's motor vehicles come from China, which has greatly affected the development of China's die casting plants.
01. What impact does the epidemic have on China's economic situation?
It is generally expected that the impact of the epidemic on China's GDP growth in the first quarter will be 2-3 percentage points, and the impact on annual growth will be about 0.5 percentage points. When the epidemic is under control, suppressed consumer demand and production will show a V-shaped recovery. It is estimated that the GDP growth rate in 2020 can be slightly adjusted to 5.5%.
02. Negative impact of the epidemic on the global supply chain
In the face of the outbreak of the epidemic, the weaknesses of the global supply chain are obvious, but the interests of all countries are deeply intertwined, and it is neither realistic nor wise to prevent globalization. Now is the right time to consider the timeliness and zero inventory manufacturing concept of automobile and other industries. China plus one strategy can also become a procurement option for diversified supply chains.
03. What measures will China take to stimulate the economy?
According to the analysis of the economic impact of the epidemic, the measures for China's economic recovery after the end of the epidemic will be based on the following aspects:
(1) Invest in new infrastructure
In order to stimulate economic development, a large-scale increase in investment in traditional infrastructure will be a good policy choice. The new infrastructure will involve the construction of 5g base stations, data centers, etc.
(2) Tax reduction
In order to enhance the vitality of enterprises, especially small and medium-sized enterprises, the government will work with enterprises to overcome difficulties and get rid of the economic crisis.
(3) Subsidize low-income groups
After the epidemic is effectively controlled, it is expected that the government will gradually introduce some loose policies to stimulate domestic consumption.
Since 2010, China's GDP growth rate has been declining. This steady decline is considered to be the result of the fundamental adjustment of the Chinese economy by the government. It is suggested that the future economy should not rely on exports, heavy industry and debt financing investment, but on stronger domestic consumption, innovation and services.
It is predicted that by 2049, China will change from the world's largest producer to the world's leading technology country. This development will be mainly driven by the transformation of industrial structure, innovation and class improvement.
At present, global automobile production has shifted to Asia. The overall conditions of 1.4 billion consumers, such as rapid economic growth, rapid urbanization, continuous income growth, extensive supply chain development, favorable infrastructure, and low car ownership per household, have made China's auto industry continue to flourish.
04. China's die casting industry needs continuous progress
One of every three motor vehicles comes from China, which also affects the development of China's die casting plants. China's automobile industry has developed rapidly and has become the most important application field of castings. By 2016, the use of castings in the automotive industry accounted for nearly one third of the total domestic demand for castings. China's die casting industry is large but not strong, and the overall innovation is insufficient, which represents the bottleneck of domestic engine and high-quality casting production.
China's die casting industry faces four major challenges:
(1) Due to the large number of small enterprises, it is difficult to achieve the effect of economies of scale.
(2) The quality of castings often does not meet the requirements of industry standards.
(3) The equipment and technical level of the enterprise need to be improved.
(4) High energy consumption in the production process.
Chinese die-casting factories must take necessary measures in many fields to quickly realize modernization and improve global competitiveness. These challenges also bring opportunities to die-casting factories outside China: complex auto parts are difficult to die-casting accurately, which puts forward higher requirements for the production of the entire die-casting industry, which means that quality is often more important than quantity. Therefore, die casting plants outside China need complex professional technology, intelligent machines and systems to produce complex castings.
05. Key industries to promote the development of light metal industry
China's economic growth is driven not only by the automotive industry, but also by aerospace, high-tech ships, railway equipment, medical devices, agricultural machinery and other industries. Among the important drivers of made in China 2025, light metals are indispensable because of their particularity.