How much does China's manufacturing industry upgrade?

On the same day, China Metal released a research report that although the electrical equipment industry as a whole has achieved industrial upgrading through market-for-technology, institutions have seen that independent research and development can produce differentiated advantages. Therefore, in the short-term, production will see R&D for a long time. Based on this logic, China Gold is optimistic about two stocks in the Hong Kong stock market: Goldwind (9.85, 0.09, 0.92%) (02208) and Shanghai Electric (3.44, -0.06, -1.71%) (02727).

Over the past 20 years, China’s electrical equipment industry has gradually learned to overhaul foreign technologies and gradually completed overtaking in corners of electrical equipment. But at present, the domestic electrical industry is still limited by the demand bottleneck. We believe that the future development lies in the expansion of the international market, as well as further product development and cross-industry product extension.

Market-changing technology leads to improvement of localization rate

The manufacturing upgrade of China's electrical equipment sector mainly belongs to R&D and upgrading. Through the introduction of foreign advanced technology and production equipment, domestic production quality and efficiency are improved. We believe that the production of electrical equipment can be divided into three links, production, procurement and design.

Among them, the introduction of technology is often achieved through upgrading the production end to achieve localization of product processing and assembly; secondly, with the help of continuous upgrading of domestic industrial clusters, the localization rate of product accessories is further increased to achieve cost reduction; finally, the company has passed further autonomy. R&D or overseas acquisitions obtain the ultimate design capabilities of the product.