"Made in China 2025" lists CNC machine tools and basic manufacturing equipment as "strategic priority areas for accelerated breakthroughs," proposing to strengthen forward-looking deployment and key technological breakthroughs, actively plan to seize future technology and industrial competitive manufacturing points, and enhance the level of international division of labor and discourse power. The proposal of this strategic goal is determined by the strategic characteristics and development stage characteristics of the CNC machine tool and basic manufacturing equipment industry, and we should earnestly study, understand, and thoroughly implement it.

　　I. CNC Machine Tools and Basic Manufacturing Equipment Possess Strategically Contested Industrial Characteristics

　　1. Anchoring China's Global Competitive Position in Equipment Manufacturing

　　CNC machine tools and basic manufacturing equipment are the "mother machines" of the equipment manufacturing industry. The technical level and product quality of a country's machine tool industry are important indicators of its equipment manufacturing development level. "Made in China 2025" lists the CNC machine tool and basic manufacturing equipment industry as one of China's strategically essential areas in manufacturing. The main reason is its "anchoring" role in the international division of labor for a country's manufacturing industry, especially equipment manufacturing: CNC machine tools and basic manufacturing equipment are the foundation for generating manufacturing value and the fulcrum for industrial upgrading, forming the core of basic manufacturing capability. Only with solid basic manufacturing capabilities can advanced equipment products be produced, thereby achieving high-value product manufacturing.

　　2. Supporting Strategic Demands for National Defense and Industrial Security

　　In terms of national defense security, CNC machine tools and basic manufacturing equipment hold a strategic position for manufacturing advanced defense equipment that transcends economic value. Many critical components in modern defense equipment have specific material, structural, and processing characteristics and difficulties. Ordinary processing equipment and traditional processing techniques cannot meet the requirements; multi-axis linkage, high-speed, and high-precision CNC machine tools must be used. Even in today's globalized world, developed countries still impose technological blockades and restrictions on China. In terms of industrial security, as the pace of domestic manufacturing upgrading accelerates, high-tech and high-added-value industries represented by equipment manufacturing face intensified competition with developed countries. Engineering machinery, electrical machinery, and transportation equipment are in a critical period for breaking into high-end international markets. However, domestic machine tool products still have certain gaps in processing accuracy, reliability, efficiency, automation, intelligence, and environmental protection, which ultimately leads to a lack of overall industrial competitiveness.

　　3. Important Support for Transformation and Upgrading in User Fields

　　Currently, the demand structure of downstream users in the machine tool industry shows a high-end development trend. Multiple industries will undergo extensive and in-depth structural adjustments and upgrades, leading to an urgent demand for high-quality, high-tech machine tool products. Overall, the market demand for medium-to-high-end CNC machine tools is rising rapidly, and users require more high-speed, high-precision, compound, flexible, multi-axis linkage, intelligent, high-rigidity, and high-power CNC machine tools. For example, the automotive industry shows a trend of large-volume, multi-variety production with rapid model updates, and the development of new energy vehicles is accelerating, thus requiring processing equipment to continuously develop towards precision, efficiency, and intelligence. In the aerospace industry, with the dramatic increase in demand for civil aircraft and the generational development of military aircraft, new-generation aircraft are developing towards lightweight, high-reliability, long-life, high-stealth, multi-configuration, rapid response, and low-cost manufacturing. New-generation technologies urgently require more advanced processing equipment to support them, and aerospace manufacturing equipment is developing towards automation, flexibility, digitalization, and intelligence. For example, in the aircraft engine manufacturing that the "Two Engines Special Project" is dedicated to breaking through, typical parts such as engine blades, complete engine casings, and blisks are gradually developing towards larger sizes, more complex profiles, lighter structures, and precision manufacturing. Especially with the widespread application of new lightweight materials like high-strength high-temperature resistant alloys, the geometric configurations of these integral structural parts are complex and difficult to process, posing new and higher demands on high-torque, high-precision CNC machine tools. The large structural components of gas turbines and the portable or mobile multi-axis linkage CNC equipment required for off-site maintenance of large equipment, a processing method using small machine tools without fixed bases and reconfigurable for assembling to process large workpieces, poses greater challenges to the structural design, process specifications, and high-efficiency processing technologies of new CNC equipment.

　　4. A Strategic High Ground for the New Technological Revolution

　　The elements of the new round of technological revolution, including intelligent manufacturing, energy internet, and new-generation information technology innovation, provide driving forces for technological breakthroughs in China's equipment manufacturing industry and offer a huge market for the equipment manufacturing industry, especially high-end equipment manufacturing. The machine tool industry is an important intersection of information technology and industrial technology; the industry itself is highly sensitive to new technologies and is a major source of emerging technology diffusion. Driven by the wave of the new technological revolution, the machine tool industry shows a clear trend of integrated innovation. World-leading enterprises are accelerating the integration of new technologies into the machine tool industry, and networking and intelligent technologies are being rapidly integrated and applied to machine tool products. More and more internationally renowned machine tool component enterprises and complete machine enterprises are accelerating the integrated application of new technologies in CNC machine tools.

　　5. Strategic Fulcrum for Global Manufacturing Landscape Adjustment

　　Entering the post-crisis era, developed economies have increasingly focused on the development of their domestic real economies: either by continuously promoting the integrated development of emerging technologies to advance industrial technology to a higher end; or by reconstructing industrial chains to bring more high-value-added production and manufacturing links and matching jobs back home. The United States has successively proposed and implemented plans such as the "Advanced Manufacturing Partnership" and the "National Strategic Plan for Advanced Manufacturing" to develop advanced manufacturing and technologies. Germany has put forward the Industry 4.0 development blueprint, focusing on CPS (Cyber-Physical Systems) as its core and smart factories as its vehicle to develop Industry 4.0, positioning it as a technological platform for a new industrial revolution. Japan has unveiled an industrial structure blueprint, identifying 10 cutting-edge technology areas to strengthen its domestic manufacturing. Regions like the UK, South Korea, India, and Taiwan, China have also proposed proactive strategies and policies to accelerate the integration of emerging technologies in equipment industries like CNC machine tools. The machine tool industry has always been a crucial strategic point for major countries and leading enterprises. In the future, as the manufacturing landscape changes and adjusts, especially for high-strategic industries globally such as automotive, aerospace, and high-end equipment manufacturing, the machine tool industry serves as an important strategic fulcrum, significantly influencing future competitive leverage. China should enhance its focus on the machine tool industry, make early strategic deployments in key areas, and strive for a favorable position in global manufacturing competition.

　　II. Obvious Trend of Industrial Upgrading

　　1. Breaking Through Key Core Technologies and Forming a Batch of Landmark Products

　　In the aerospace sector, self-developed heavy-duty forging equipment such as the 800MN large die forging press and the 120MN aluminum alloy plate tension stretcher have filled the domestic technological gap in integral forming of large critical components for aerospace, providing strong support for the generational development of military aircraft and the development of large aircraft. Specifically, the 800MN large die forging press has achieved integral forming of over 30 types of critical titanium alloy components in the aerospace field, and the high-quality aluminum alloy thick plates produced by the 120MN-class aluminum alloy wide-thick plate tension stretcher have been applied to main load-bearing structural parts like aircraft wings, helping China overcome its complete reliance on imported aluminum alloy thick plates for large aircraft.

　　In the automotive manufacturing sector, large, fast, and efficient CNC fully automatic stamping production lines have won bulk orders for production lines at US automotive local factories in international bids against world-class enterprises, earning recognition and respect from international counterparts. Currently, domestic market share for automotive body panel stamping lines exceeds 70%, and global market share has surpassed 30%, effectively promoting the independent development of domestic automotive equipment.

　　In the field of power generation equipment, the 36,000-ton black vertical metal extrusion press has achieved independent production of large-diameter, thick-walled seamless steel pipes made of domestic high-end heat-resistant steel used in 1000MW ultra-supercritical thermal power units; large open-close heat treatment equipment has produced Asia's largest integral forged rotor for nuclear power, forming a mass production capacity for large rotors. Ultra-heavy duty CNC vertical turning-milling compound machine tools, CNC heavy-duty gantry five-axis linkage turning-milling compound machine tools, ultra-heavy duty CNC floor-type milling-boring machines, ultra-heavy duty CNC horizontal boring-turning machines, and special CNC axial groove milling machines developed for third-generation nuclear power island and conventional island equipment have solved processing challenges for nuclear power pressure vessels and baskets, heat exchangers, turbine cylinders, generator rotors, etc., and have been installed and applied in multiple sets of nuclear power equipment.

　　2. Optimization and adjustment of product structure, steady improvement of technical level

　　Firstly, the level of mid-to-high-end equipment has rapidly improved. Currently, over 10 types of equipment, such as large automotive panel automatic stamping lines, have reached internationally leading levels and can fully realize import substitution. Over 20 types of products, including high-speed gantry five-axis machining centers, have basically reached international advanced levels, capable of replacing imported products. Precision horizontal machining centers have formed core technologies with independent intellectual property rights and flexible manufacturing systems. High-end CNC machining centers, such as high-speed and composite types, have completed phased research and development, but there is still a certain gap in functional performance and reliability compared to international advanced levels. Secondly, the CNC system has moved forward in tiers. China has made significant progress in the research and development of mid-to-high-end CNC systems. Since 2010, over 35,000 sets of domestic mid-to-high-end CNC systems have been cumulatively applied in key fields such as aerospace, energy, shipbuilding, and automotive, achieving import substitution. High-performance CNC system series products, such as multi-channel and multi-axis linkage systems, have broken foreign technological monopolies, and their main technical indicators have basically reached the level of international mainstream high-end CNC systems, enabling matching with various high-speed and precision CNC machine tools. High-end CNC systems have achieved small-batch application in key military enterprises. The developed standard CNC systems have achieved mass production, with domestic market share increasing from 10% to 25%. Several industrial production bases have been formed, among which Guangzhou CNC Equipment Co., Ltd. has formed a production capacity of 100,000 sets of various CNC systems annually, ranking second in the world in terms of output. China's CNC systems have initially gained competitiveness with similar foreign products and have achieved mass exports of CNC systems. From 2010 to 2014, cumulative exports of various CNC systems exceeded 9,600 sets, including nearly 700 sets of five-axis linkage CNC systems. Finally, the quality level of functional components has steadily improved, and the product range has been continuously refined. Domestic functional components have achieved mass matching with machine tool hosts; tool products have basically acquired the ability to provide modern cutting tools for the automotive industry. The application demonstration and mass matching of CNC systems, functional components, and tools with CNC machine tool hosts help form a complete industrial chain and promote the structural adjustment of the machine tool industry.

　　3. Significant improvement in independent innovation, guaranteed sustainable development

　　In recent years, research on machine tool manufacturing fundamentals and common technologies has been continuously strengthened, with product development and technological research advancing simultaneously. The maturity of several key technologies, such as reliability design and performance testing technology for machine tool products, and multi-axis linkage machining technology, has significantly improved. Research results in digital design technology have been practically applied in the design of high-precision CNC coordinate boring machines, vertical machining centers, and other products; multi-error real-time dynamic comprehensive compensation and embedded CNC system error compensation software and hardware systems have been demonstrated and applied in multiple enterprises and products, significantly improving the accuracy of CNC machine tools.

　　III. The arduous path to high-end industrial development

　　China's machine tool industry holds an important position in the global machine tool industrial system and market, but it cannot yet be considered a powerful machine tool nation. Compared with the world's leading machine tool nations, China's machine tool industry still has certain gaps, particularly in the lack of competitiveness in mid-to-high-end machine tools. Furthermore, influenced by complex economic situations both domestically and internationally, the development of China's machine tool industry is returning to a new normal, with an urgent need for industrial transformation and upgrading towards the mid-to-high end.

　　1. International competitiveness needs to be enhanced

　　According to statistics from the consulting firm Gardner, in the global machine tool consumption market, China's machine tool exports in 2014 amounted to US$3.3 billion, accounting for less than 5% of the total world machine tool consumption; whereas Japan and Germany each accounted for over 10%. At the same time, a considerable portion of urgently needed high- and mid-range CNC machine tools in China rely on imports, such as over 40% of imported equipment in the automotive sector.

　　2. Development of key components for the machine tool industry urgently needs strengthening

　　Domestic functional components, regardless of variety, quantity, or grade, cannot meet the requirements for host machine matching. The market share of domestic mid-range matching functional components still needs to be improved; high-end products largely rely on imports. The competitiveness of the supporting functional components industry needs rapid improvement.

　　3. Process verification and demonstration applications need to be strengthened

　　From prototype development to actual production application, CNC machine tools require extensive testing and continuous improvement in manufacturing processes, reliability and accuracy retention, and engineering. At the same time, users also need to provide process verification. However, process verification and application demonstration are also a weakness in the development of China's CNC machine tool industry.

　　4. Industrial development pressure remains high

　　Global machine tool production and consumption continue to show a shrinking trend. According to data released by Gardner, Inc. of the United States, the global machine tool consumption in 2014 was US$75.3 billion, an increase of only 0.3% from 2013. Global machine tool production declined for three consecutive years, with the global machine tool output value in 2014 being US$81.2 billion, a decrease of 3.1% from 2014. China's CNC machine tool industry also continues to operate under pressure, generally in a downward trend. In 2014, domestic metal processing machine tool output decreased by 2% year-on-year, of which metal cutting machine tool output decreased by 1.7% year-on-year, and metal forming machine tool output decreased by 3.3% year-on-year. At the same time, domestic demand for imported machine tools increased instead of decreased. In 2014, the total import of machine tools and tools was US$17.78 billion, an increase of 10.8% year-on-year, of which the import of metal processing machine tools was US$10.83 billion, an increase of 7.6% year-on-year. This indicates that the domestic machine tool industry struggles to meet the high-end demands of enterprises. The domestic machine tool industry is facing a superposition of cyclical and structural pressures, urgently needing to find new breakthroughs in development.

　　IV. Strategic thinking for accelerating the industry's transformation from large to strong

　　1. Promote the focused development of advantageous resources

　　Based on enhancing the independent innovation capability and market competitiveness of domestic CNC machine tools and basic manufacturing equipment, promote the focusing of advantageous resources on two major areas: aerospace and automotive. Concentrate on core equipment and key technologies, with a focus on resolving bottleneck issues in key technologies such as performance reliability, stability, and completeness of developed equipment.

　　2. Promote demonstration applications of advanced products

　　Increase investment in the construction of application verification and demonstration bases for key technologies and core equipment of machine tools and basic manufacturing equipment, which are representative of user needs and can centrally verify them. Selectively support market-oriented projects with strong product completeness, high flexibility, and intelligence, focusing on solving the efficiency and intelligence of equipment.

　　3. Meet new national strategic demands

　　Accelerate the development of CNC machine tools and basic manufacturing equipment needed for national strategic development, further focusing on core equipment for national key projects, developing major products, and breaking through key technologies. Strive to improve the technical level of CNC equipment and break the restrictions of national strategic equipment's reliance on imports.

　　4. Build a complete machine tool supporting industry chain

　　Encourage and support CNC machine tool and basic manufacturing equipment host manufacturers, CNC system providers, functional component suppliers, and other related units in the industry chain to form long-term stable strategic partnerships, establish long-term supporting relationships between CNC systems, functional components, and machine tool enterprises, and build a complete supporting industry chain for CNC machine tools and basic manufacturing equipment.