The main purpose of this paper is to analyze Mainland China’s machinery industry. The machinery industry discussed here is based on a much broader definition as used by Mainland China. It includes the machinery manufacturing industry (which includes the electronics industry), and the metalwork manufacturing and fixing industry. This paper thus also places emphasis on the electronics industry.
The major findings of this paper are as follows:
(1) The gross product of Mainland China’s machinery industry for the period 1949-1984 is characterized by two peaks and two troughs. Generally speaking, the production of capital goods was the prominent feature in the machinery industry during the sixties, but after 1979 (the year in which the economic reforms began), the emphasis was on consumer goods. However, since 1983, the rate of growth of capital goods has been higher than that of consumer goods.
(2) The major production bases of the machinery industry are located in the coastal areas of Mainland China, notably in and around Shanghai, Peking and Tianjin. The scattering of the machinery industry locations carried out during 1981-1983 has tended to promote a more even distribution. Formerly, these three big cities and also Shaanxi showed a high degree of concentration, while the degree of concentration in the provinces of Xinjiang, Yunnan and Anhui was much lower.
(3) The geographical location of the machinery industry is able to meet the requirements of Mainland China’s agriculture and light and heavy industries. There is a high degree of correlation between its location and the location of state-owned industries. However, an increasing degree of correlation exists between its location and the location of large and medium-scale industries, while the degree of correlation with small industries is decreasing. As regards the different sectors within the industry, a higher degree of correlation exists with heavy industries than with light industries, as far as geographical location is concerned.
(4) As for the level of technology in the machinery industry, the production of agricultural machinery is emphasized in order to solve the problems associated with agricultural transportation. Concerning the power-driven machines, the technological level of the electric power generating equipment and the internal combustion engine is not sufficient. The more advanced kinds of techniques such as numerically controlled techniques have yet to be developed. With regard to the techniques associated with materials science, for instance knives and blades for machines and grinding and polishing tools for machines, more advanced techniques have been adopted. The proportion of lange-scale and sophisticated machine tools being produced is still very small. The aerospace industry is also relatively advanced and can produce all types of aerial engines except ramjets.
(5) Mainland China is, on average, about a decade behind western countries as far as her ability to carry out research and innovate in the electronics industry is concerned. In spite of the time lag, technical differences between her computer industry and those of western countries are rapidly being reduced.
(6) Among the products of Mainland China’s machinery industry, metal products form the basis of her exports, taking the foreign market as a whole. As for electronic products, radio-recorders are competitive in all foreign markets.
(7) On the basis of the indices of relative export performance, from the world point of view, the export competitiveness of Mainland China’s mechanical and electronic products is weaker than that of Taiwan. However, after inspecting the major export markets of these products, namely Hong Kong and Singapore, one can still find that there are some products that are very competitive, and hence put pressure on the same kind of product manufactured in Taiwan.
