The general machinery industry has been an important pillar of China’s rise as a manufacturing powerhouse. These private machinery companies have numerous specializations, ranging from component and precision tool makers to producers of heat exchangers and gearboxes. Their products are used in a diverse array of sectors from agriculture to logistics.
The industry’s growth has outpaced China’s economic growth. In 2016, the industry’s value-added output grew by 9.6%, compared to 6.9% for the overall economy. However, the industry is still replete with low-end manufacturers—fewer than 40% of the core components and materials for general machinery products are made domestically.
As China still relies on imports for high-end machinery, it wants to climb the value-added ladder and find partners and technologies to bolster its domestic machinery industry.
As China’s factor costs, such as labor and raw materials, continue to rise, downstream manufacturers are being forced to acquire machinery with higher efficiency and technological sophistication. The changing environment will incentivize Chinese companies to further venture abroad and acquire know-how from advanced markets with best industry practices.
Shenzhen Riland manufactures and sells welding and cutting equipment, as well as automated welding devices and their components. Its products are used in the construction, auto manufacturing, and aerospace industries. In 2016, 33.4% of its revenue came from exports.
In August 2015, the Chinese company announced that it would invest over $15 million to form a US subsidiary. The company aims to expand its business into the US market via the subsidiary, Riland International, Inc., and continue to seek investment opportunities overseas.
In 2016, the company invested over $30 million to establish a subsidiary in Germany to expand its business in the EU market. The subsidiary, Riland Europe GmbH, is based in Frankfurt.