The China Machine Tool & Tool Builders' Association (CMTBA) stated during the International Machine Tool Information Press Conference held recently alongside the 9th China CNC Machine Tool Show (CCMT) that the Chinese machine tool consumption market has yet to emerge from its downward adjustment phase in the first quarter of this year.

The market entered this downward adjustment channel in 2012, with the scope of the adjustment showing a comprehensive expansion trend by 2015. Chen Huiren, Executive Vice President and Secretary General of the CMTBA, noted that the Chinese machine tool consumption market is highly correlated with China's macroeconomic environment and will continue to evolve as the country's economic adjustment and transformation deepen. Sustained adjustments have had a comprehensive and profound impact on the industry. Industry differentiation and transformation/upgrading have increasingly become the primary characteristics of development in recent years, with the industry accelerating its upgrade amid this differentiation.

First is industry differentiation, which is primarily manifested in three areas: market, sector, and enterprise differentiation. Market differentiation refers to a serious oversupply of low-end homogenized products while "effective supply"—which adapts to changes in market demand structures—remains relatively insufficient. Sector differentiation indicates that different sub-sectors within the industry are operating under significantly different conditions; metal-cutting and metal-forming machine tools, the two major categories of primary machinery, have shown completely different development states over the past few years. Enterprise differentiation refers to the varying development trends among different types of enterprises. The fortunes of state-owned/collectively-controlled, privately-controlled, and foreign-controlled enterprise groups have ebbed and flowed; a considerable number of traditional enterprises are struggling under the impact of market changes, while a group of excellent emerging enterprises is rising against the trend with great vitality.

Second is transformation and upgrading. Driven by the powerful external force of market change, the Chinese machine tool industry is undergoing a new round of transformation and upgrading that is more comprehensive and profound than the previous adjustment in the 1990s, making it more arduous and challenging. In summary, the focus of this round of adjustment and transformation is primarily on development strategy transition, competitive capability reconstruction, and corporate structure upgrading. Supply-side structural reform will inevitably become a brand-new theme for the industry's transformation, signifying new opportunities and challenges.

Chen Huiren stated that the CMTBA's basic judgment on the 2016 market trend is: regarding the overall market, it will remain in a downward adjustment interval throughout the year, but the magnitude of the decline will narrow to some extent compared to last year. The differentiation in market structure will further evolve; market demand in the metal-cutting machine tool sub-sector is expected to bottom out and stabilize within this year, while the downward trend in sub-sectors such as metal-forming machine tools and measuring tools may deepen further. The main directions of market demand structure upgrading—namely integrated automation, customization, and general gear-shifting upgrades—will become increasingly evident.