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**Abstract**
Xu Zhengshun, the General Manager of Siemens CNC System, has witnessed significant progress in China’s machine tool industry. Particularly during the “Eleventh Five-Year Plan†period, the sector continued to grow rapidly despite the impact of the global financial crisis. This momentum was especially evident in the development of CNC (Computer Numerical Control) technology, which is now advancing at an impressive speed. However, with this growth comes a series of challenges that require urgent attention.
At the same time, the machine tool industry faces various uncertainties, particularly in the low-end market, where too many manufacturers compete with products that lack innovation and are often sold at the cost of quality. The intense price competition in this segment is making it increasingly difficult for companies to sustain themselves. As a result, there is a pressing need for the entire industry to undergo transformation and modernization in order to find a sustainable path forward.
Xu Zhengshun believes that while China’s machine tool industry has grown significantly in scale, the key issue today lies in the imbalance between low and high production capacity. The industry urgently needs to evolve, not just in terms of volume, but also in quality and technological advancement.
He outlines three main reasons behind this challenge:
First, some enterprises focus too much on minimizing costs, leading to fierce price wars that reduce profit margins and limit the ability of companies to reinvest in research and development. Second, many machine tools are designed with simplicity in mind, which makes them easy to use but limits their adaptability in complex manufacturing processes. Third, the widespread use of non-open CNC systems restricts the potential for secondary development, making it difficult for companies to innovate or customize their machines over time.
Xu compares this situation to using a basic camera—while it may capture images, it doesn’t teach users about the fundamentals of photography. Similarly, relying on simple, closed systems prevents the industry from developing deeper technical capabilities.
He argues that the current issues facing China’s manufacturing sector represent a strategic trap. Many companies have become stuck in a cycle of providing low-end products, constantly adjusting to customer demands without truly guiding the market. This approach leads to a loss of long-term vision and innovation.
Why is this a trap? After years of rapid growth, the industry has expanded in size, but brand recognition and technological leadership remain weak. Many firms are forced into the low-end market, where they face unreasonable pricing and performance expectations. They mistakenly believe that meeting these demands is their responsibility, without realizing that their role should be to shape and guide market needs rather than simply respond to them.
From a broader perspective, China’s manufacturing industry is growing fast, and so are user requirements. The demand for higher-quality processing is increasing, yet many domestic machine tool companies are still unable to meet these expectations. This gap highlights a critical problem: while users have high standards, the industry lacks the capability to deliver solutions that match those needs.
Solving this vicious cycle requires deep reflection and a clear strategy. It’s not just about improving technology—it’s about rethinking the entire system, from management to R&D, and from product design to market positioning.
**How to Transform and Upgrade Machine Tool Enterprises**
First, strengthening the foundation of manufacturing management is essential. This includes enhancing quality control and establishing more robust and independent quality assurance systems. For example, even in standard turning and milling operations, there are no major technical barriers. The real challenge is to improve the quality of these machines, allowing the industry to take a significant step forward.
Second, the core of industrial upgrading lies in intelligent manufacturing. Intelligent systems go beyond mere processing—they must be adaptable to different industries, product types, and production environments. These systems need to support process flexibility, production management, equipment maintenance, customization, network connectivity, and even cybersecurity. Open CNC systems are crucial here, as they allow users to integrate new ideas and technologies into machine design and manufacturing. Closed systems, on the other hand, limit this potential and hinder long-term development.
In short, the future of China’s machine tool industry depends on its ability to move beyond mass production and embrace innovation, intelligence, and open systems. Only then can it truly compete on the global stage.