TMTPOST –Yao Jiguang, the founder of ITES Shenzhen International Industrial Manufacturing Technology and Equipment Exhibition, was amazed by this year’s China International Machine Tool Show (CIMT). .

The 19th CIMT is the “best event” in decades, he said. In terms of scale, the number of devices on display, and that of international brands, CIMT has become one of the world’s four major expos.

Machine tools are the “mother machines” of industry, which means that they are the machines that make other machines. From the precision clasps in smartphones to the massive forging of aircraft carrier decks, machine tools are indispensable.. Just as the human body needs a skeleton for support, machine tools form the fundamental backbone of modern industry.

This year’s show was especially grand, bringing together over 2,400 companies from 31 countries and regions. The show displays the evolution of China’s machine tool industry.

In the 1990s, China was the world’s largest importer of machine tools, but there were barely capable of exporting any products. Yao recalls, “Around the year 2000, as domestic market demand changed, Chinese-made CNC machine tools began to develop. However, back then, the technology and after-sales service systems machine tools were still in their infancy and couldn’t keep up with market needs. Many factories had no choice but to opt for machine tools from Europe, the United States, Japan, South Korea, or Taiwan.”

Decades have passed, and through the lens of this year’s CIMT, China’s machine tool industry has transformed: equipment produced by foreign brands in their Chinese factories, localized equipment from Sino-foreign joint ventures, ground-breaking technological achievements from state-owned enterprises, and innovative creations from private enterprises tailored to various application scenarios—all competing on the same stage. “From the exhibits, we can see that today’s machine tool manufacturers are no longer just selling equipment,” Yao said. “They can now provide digital, intelligent, flexible, and customized industry application solutions, as well as comprehensive services including technical training and financial support.” Among the endless stream of visitors, the number of international buyers seeking to become agents for domestic machine tools is steadily increasing.

China’s machine tool ecosystem is diverse and collaborative, which is unique in the world The fast growth of China’s economy relies on the support of manufacturing, and at the foundation of this base, “industrial mother machines” play a cornerstone role, underpinning decades of transformation in the Chinese economy.

As the only country in the world with a complete manufacturing system, China’s demand ranges from basic processing to high-end precision manufacturing, providing fertile ground for the development of the machine tool industry. Yao mentioned that explosive domestic demand in sectors such as 3C electronics and new energy vehicles has fueled the “grassroots innovation” and rapid growth of private enterprises.

Take, for example, the processing of magnesium-aluminum metal frames for AR glasses. A machine tool company based in Dongguan collaborated with AR glasses brands to jointly develop processes, overcoming technical challenges arising from new materials and designs, and produced specialized machine tools tailored for these components, enabling large-scale mass production.

With their exceptional cost-performance and rapid iteration capabilities, these companies have achieved leapfrog development in specialized niche markets, using innovative technologies to meet the large-scale production needs of new consumer products. The mass production of these new consumer goods, in turn, feeds back even more new business opportunities to machine tool enterprises. This also highlights a distinctive feature of private machine tool companies: their deep integration and interaction with the market and industry, which brings boundless vitality to the sector.

In addition, breakthroughs in the domestic production of core functional components and “reverse innovation” through overseas technology acquisitions are gradually dismantling the technological barriers of foreign enterprises. Supported by robust technological capabilities, Chinese machine tool companies are boldly venturing abroad and winning favor with overseas manufacturers.

However, Yao and industry experts remain clear-headed: in the core areas of high-precision, andcutting-edge fields, there is still a gap between domestic machine tools and their international counterparts. The challenges are formidable and cannot be underestimated.

“Generational Gap Blockade"

The technological level of machine tools directly determines a country's industrial capabilities. However, over the past several decades, China’s machine tool industry has long been subject to technological blockades and export restrictions imposed by Western countries. The high-end sector has been heavily reliant on imports, with key technologies repeatedly blocked by so-called “generation gap blockades.” After the start of the economic reform and opening up in the late 1970s, China began to introduce advanced foreign technologies to upgrade its machine tool industry, gradually transitioning from traditional to CNC machine tools. With the introduction of foreign technologies, major state-owned machine tool enterprises went through reorganization or bankruptcy. Meanwhile, foreign machine tool companies flocked to China to build factories. Although foreign machine tool companies made huge profits, the core technologies were never truly exported to China. Western countries have always imposed strict controls on high-end CNC machine tools, only allowing the export of outdated technology—sometimes one or even two generations behind. For example, although Japan has sold a large number of mid- and low-end machine tools to China, key equipment such as five-axis CNC machines and high-precision CNC systems were restricted from export. This "product-only, no technology" strategy has kept China’s machine tool industry trapped in a cycle of "import—fall behind—import again", making real technological breakthroughs elusive.

In 1996, the Wassenaar Arrangement imposed export controls on high-end machine tools to China. Signed by 42 countries including the United States, Japan, and Germany, the agreement strictly limits the export to China of multi-axis machine tools with high repeat positioning accuracy and the ability to process large components, citing "preventing military use" as the reason. These restrictions have left China at a disadvantage for a long time in fields such as aerospace, defense, and precision manufacturing. In the 2000s, China’s machine tool industry became the world’s largest in terms of scale. According to relevant reports, in 2009, China’s total machine tool output value surpassed that of Japan or Germany for the first time, making it the world’s largest machine tool producer. However, in the high-end sector, China still remained heavily dependent on imports.

In 2011, the United States further tightened technology exports to China, excluding China from the list of the "Strategic Trade Authorization Exception", making it even harder for Chinese factories to obtain high-end machine tools. After 2020, as Sino-US trade tensions escalated, the U.S. placed some Chinese machine tool companies on the "Entity List", imposing three main restrictions: first, a ban on the export of hybrid 3D printing/CNC machine tools (ECCN 2B001 category); second, strict controls on multi-axis CNC machines, requiring compliance with ISO 230/2 precision standards; and third, implementing a "presumption of denial" licensing policy. These measures have posed even greater challenges for China’s high-end manufacturing sector.

The Emergence of China’s Machine Tools

Years of harsh blockade did not completely stifle the vitality of China’s machine tool industry. Instead, it unexpectedly fostered a force for breakthrough in a unique environment—the "wild growth" of private enterprises in South China.

Looking back at the journey of South China’s manufacturing sector, Yao recalls how grassroots privately-owned companies adopted a pragmatic approach to find new paths for development: Mitsubishi control systems, Taiwanese ball screws, and Japanese bearings were disassembled and reassembled by technical teams in private enterprises, ultimately creating specialized machine tools tailored for sectors like 3C electronics and new energy vehicles. With high cost-performance and rapid delivery capabilities, these companies quickly captured market share.

Whilethe rise of grassroots innovation has squeezed the traditional market space of state-owned enterprises, it also forced SOEs to reform. Once-glorious state-owned enterprises like Shenyang Machine Tool fell into debt crises due to technological path dependency and reckless expansion, while private enterprises leveraged market-driven mechanisms and supply chain integration to establish significant advantages in CNC adoption rates and product iteration speed.

The real qualitative change began with breakthroughs in core functional components. Yao noticed that as large-scale enterprises began to establish dedicated R&D teams and core component manufacturing departments, the industry shifted from imitation to innovation. This shift was not only reflected in the improvement of independent innovation capabilities, but also in the technological spillover effects gained through overseas acquisitions—domestic leading enterprises strategically acquired European core component companies, rapidly learning through technology deconstruction and reverse engineering. This “acquire-digest-innovate” approach greatly shortened R&D cycles.

For example, core components such as spindles have found a breakthrough for domestic production through this path. Spindles produced in Guangzhou have been innovatively improved, and thanks to mass production and cost advantages, have gradually replaced Japanese and German products. This cost advantage has directly contributed to stronger international competitiveness for the entire machine market.

Currently, China’s machine tool industry has developed into a diverse ecosystem: localized production by foreign brands, Sino-foreign joint ventures focusing on niche sectors, technological breakthroughs by state-owned machine tool factories, and innovation-driven breakthroughs by private enterprises. This diversity is unique on a global scale, underpinned by the enormous demand from China’s manufacturing sector.

As the only country in the world with a comprehensive manufacturing system, China offers extremely rich application scenarios, ranging from basic processing to high-end precision manufacturing, with diverse levels of demand and a wide variety of use cases. This unique industrial environment provides fertile ground for machine tool exhibitions—it not only needs to serve domestic enterprises but also meet the expectations of global manufacturers for the Chinese market.

This stands in stark contrast to the gradual decline of the U.S. machine tool industry due to industrial hollowing-out.

The U.S. machine tool industry once led global technological development for a long time, especially dominating during the post-WWII golden era. However, starting in the 1980s, facing competition from German and Japanese precision machine tools, American companies lost their edge due to lagging technological upgrades. After the 1990s, the U.S. accelerated industrial offshoring and shifted manufacturing toward finance and services, directly leading to a shrinking demand for machine tools..”

In contrast, the rise of China’s machine tool industry is closely tied to the robust demand from the country’s discrete manufacturing sector. Yao gives an example: in the 3C manufacturing sector, a single factory producing mobile phone frames may require over 2,000 machine tools, while companies like Foxconn need tens of thousands. This massive demand has fostered unique advantages for Chinese machine tool companies.

Furthermore, the explosive growth of the new energy vehicle (NEV) market has created another critical application scenario for China’s machine tool industry. Unlike traditional vehicles, NEVs feature components such as batteries and electric motors that have fundamentally different design and process requirements. The power systems of NEVs rely on electric motors and other electrical equipment, demanding much higher machining precision for their parts. With the enormous production capacity pressure in the NEV sector, automakers are also raising their efficiency requirements.

Key NEV components—including power batteries, chassis, casings, touchscreens, motors, and drives—all require precision machining. For instance, processing just one battery tray for an NEV calls for 18 specialized machine tools. Meeting both precision and efficiency demands, the flexible and responsive R&D capabilities of Chinese machine tool makers play a crucial role in adapting to the market.

According to estimates by Zhongtai Securities, from 2021 to 2025, the NEV sector will generate an additional 26.5 billion yuan in machine tool demand, averaging 5.3 billion yuan per year. This emerging demand has broken the traditional technological monopoly held by established automotive powers in the machine tool sector. Chinese companies have not only benefited from this opportunity to leapfrog competitors, but have also driven further development in machine tool manufacturing.

Fueled by these application scenarios, Yao observes that China has developed a multi-layered machine tool market structure. Whilelarge machine tool groups meet the bulk needs of industries such as automotive and electronics through mass production, tens of thousands of small and medium-sized machine tool manufacturers in East and South China focus on serving the small-batch, multi-variety needs of discrete manufacturing.

In East and South China, there are countless small and medium-sized precision manufacturing factories, each with just two or three hundred employees, yet demonstrating remarkable innovation and vitality. These firms possess flexible and solid precision machining capabilities, able to take on challenging orders such as missile components, medical devices, and special materials processing. Through process innovation, they meet the demands of small-batch precision manufacturing.

This unique manufacturing capability gives China’s manufacturing sector greater resilience in the face of today’s global headwinds. No matter which sector faces cyclical fluctuations, as long as there is demand for precision parts processing, there will be business for precision manufacturing factories—and thus opportunities for machine tool companies.

Therefore, even though international brands like Apple are attempting to shift some production capacity to countries such as India, the processing of core components still relies on China’s powerful and stable supply chain system.

The reason behind this phenomenon is that the application of machine tools involves not just the equipment itself, but the entire industrial ecosystem. Machine tools are merely tools; the real key lies in the craftsmanship and experience of workers and the maturity of the supporting supply chain. A mature processing system requires the collaboration of skilled technicians, process engineers, and supporting suppliers—an ecosystem advantage that cannot be replicated in the short term.

Yao quoted an executive from India’s manufacturing sector, saying that India lacks clusters of small and medium-sized enterprises (SMEs) centered around technically skilled owners. This makes it difficult for India to build a complete processing system in a short period of time. In China, the entire process for a mobile phone structural component—from design to mass production—can be completed within a 50-kilometer radius. In contrast, in India, the same component might require coordinating resources across the globe.

From Trade Deficit to Global Supply Chain Expansion

An even bigger turning point for China’s machine tool industry occurred during the three years of the Covid-19 pandemic. As global supply chains fell into chaos, trade wars, the pandemic, and geopolitical conflicts led to a reshaping of supply chains, giving Chinese companies a new opportunity. Security became a key consideration for Chinese companies when choosing equipment. Previously, imported machine tools raised concerns among users due to the risk of being “locked,” but the stability and controllability of domestically produced equipment gradually earned their trust.

In 2021, China’s machine tool exports exceeded imports for the first time, achieving a historic trade surplus. This trend continued in subsequent years: in 2022, China’s machine tool and tool trade surplus reached $8.52 billion; by 2024, exports had risen to $11.267 billion, a year-on-year increase of 7%, while imports had dropped to $5.859 billion.

If the pandemic gave China’s machine tool industry a chance to “test the waters,” then the Russia-Ukraine war truly opened the door to “going global.” After the start of the war, Europe’s manufacturing sector was mired in an energy crisis, Japanese machine tool exports to China tightened due to geopolitics, and Chinese machine tools—honed by intense domestic competition—quickly filled the market gap with their exceptional cost performance. According to reports, in 2020-2021, about 20-25% of all machine tools imported by Russia came from China. By 2024, 71% of Russia’s machine tool imports were from China.

“A few years ago, machine tool exhibitions were basically import shows, and the number of Chinese machine tools that could be exported was very limited. Now, for many types of machine tools, international brands can hardly compete with Chinese ones,” Yao said. But the real breakthrough lies in the globalization of service systems. Chinese machine tool companies are following their manufacturing clients overseas, establishing comprehensive after-sales service networks in places like Southeast Asia and Mexico. “It’s just like car dealerships,” Yao explained. “No matter how good the equipment is, it won’t sell without a robust service network.”

This model of “entire industrial chain going global” is rewriting the rules of the global machine tool market. The increasing number of foreign visitors at CIMT was proof of this trend. Yao analyzes that most of these international buyers looked for agency and partnership opportunities. In the past, those running equipment businesses abroad rarely dealt in Chinese equipment, but now they’ve realized that distributing Chinese equipment worldwide is also a good business. That’s why they’re seeking to ship Chinese equipment to different countries for sale.

The shift from a trade deficit to the global expansion of the industrial chain marks a fundamental transformation in the structure of China’s machine tool market. Chinese machine tool exports are moving from low value-added products to high value-added products such as high-precision machining centers. Before 2010, the localization rate of high-end machine tools in China was less than 10%. According to data from Sullivan and LeadLeo Research Institute’s report “Domestic Substitution of China’s High-End CNC Machine Tools,” the localization rate of high-end machine tools is projected to rise to 32.2% by 2029.

Gaps, Concerns, and the Future

From once relying on imports to now possessing global competitiveness, the rise of China’s machine tool industry is evident to all. Yao recalled the exhibition hall filled with imported equipment twenty years ago—it feels like a different era. China’s machine tool industry has shattered the myth that “high-end must be expensive.”.

However, Yao is well aware that in high-precision and cutting-edge fields, the gap remains stark. “It’s like car manufacturing—we can produce extremely cost-effective cars, but it will still take time before we can make a ‘Rolls-Royce.’”

Take five-axis machining centers as an example. They are often regarded as synonymous with “high-end machine tools.” For instance, the precision manufacturing of mechanical structures—especially the accuracy retention of rotary tables and tilting heads—sets a high technical threshold, which has allowed true five-axis linkage machine tools to be monopolized by a handful of international giants for a long time.

From the application level, although both can achieve five-axis linkage, the actual value of devices with different precision grades varies dramatically. Yao explained that the precision requirements, difficulty, and material applications are completely different for products such as TV casings, smartphone frames, new energy vehicle battery housings, and the core component housings of semiconductor equipment. Being able to make TV casings does not mean you can manufacture housings for semiconductor equipment," Lao Yao said.

This gap is reflected not only in equipment specifications, but more importantly in the accumulation of fundamental research. Core technologies such as control systems, visual sensing, and positioning detection still require long-term investment. "Building industrial mother machines is like running a marathon," Yao said. "Huawei's perseverance in the chip field is something we should learn from." The shadow of the Wassenaar Arrangement still lingers, and the transformation of China’s machine tool industry is far from over. The West’s “generation gap blockade” against China remains evident in key sectors such as military industry and aerospace. Moving forward, China’s machine tool industry needs to focus on two aspects: first, strengthening fundamental technology R&D, especially in core areas like control systems and precision sensing; and second, building a more open global cooperation ecosystem, promoting exchange and technology sharing through exhibitions and other platforms.

(This article was first published on TMTPost App. Author | Han Jingxian Editor | Liu Xiangming)