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Metal Casting Technologies : September 2007
CHINA THE FOUNDRY EVOLUTION PATH-CHINA & THE MILE STONES By Gopal Padki, CEO & Chairman, Sinocast China "China has telescoped into one generation what other countries took centuries to achieve" This nation's unique attempt to complete two transitions at once from command to market economy and from rural to an urban society is without historical precedent. Nowhere else such mammoth transformation is recorded so far. Ref World Bank China 2020 review. The table below lists the national events and the foundry evolution in China. WHO'S WHO OF METALS -- ANNUAL 2007/8 25 PERIOD MAJOR EVENT - NATIONAL FOUNDRY INDUSTRY EVOLUTION 1976-1980 The 10th Chinese Communist Party, CCP restores Deng Xiaoping's to his post as vice-chairman the central committee and the central military committee. Cultural Revolution officially ends. Produce agriculture & industrial gods by plan only. Predominantly captive, labour intensive, hand moulding, cupola, clay/cement bonded, some silicate sand foundries. Mostly the State Owned, SoE, fragmented, regionally duplicated for security and social obligations. Capacity built in every foundry sector regardless of castings real consumption projections. The beginning of unorganized number games statistics. 1981-1989 Rural responsibility system for agriculture produce success best practice experiment tried on industrial output. Beginning of market oriented economic system. Profit retention and tax on profit first time introduced in 1984! The enterprise law enacted in 1988, limiting CCP intervention in the management of SoEs. Deng's SEZ experiment success, FDI investments in export processing zones, port, freight way/expressway and airports upgrade infrastructure investment. GDP growth main occupation on the provincial & local officials mind. Tiananmen democracy demonstrations in 1989, slowdown in economy until 1992. Induction furnaces, CNC machines introduction of chemically set binders system-using Chinese FF/FA. High impact green sand moulding lines imports die casting, precision casting and centrifugal pipe plants upgrades through gradual modernization programme by the state. Nearly US$20 b spent in this decade for SoE upgrades including talent training abroad - Italy, Spain, Germany, USA & UK. Universities - Tsinguha, Jiatong, Wuhan, Xian, Nanjing, Dalian, Tianjin, Gansu, Haerbin, etc all pursuing extensive development of R&D and graduation subjects for metal casting industries. Formation of China foundry Association CFA, Beijing 1986. This gave birth to national level voluntary system for foundry enterprises data collection. Castings output reported based on installed capacity only hence even today the figures are not accurate and are left for much individual estimation. However it suffices to say that the market then was already large, grey iron 7, ductile at 0.74, cast steel at 1.12 malleable at 0.26, copper 0.11, al/Mg at 0.34, Zn at 0.02 others at 0.014 adding up to 9.6 m tones total in 1989. 1990-1999 Pudong Shanghai -investment center opens nearly US$20-25 billion FDI attracted, about half of national generated through 90s. Rapid economic development car/auto JV policies, special incentives for Taiwanese Hongkong based investors. Almost every local and provincial government body busy drafting preferential tax, land use rights and subsidies for export-oriented industries. Direct interest from European, American, UK, Taiwan and Hongkong based foundry groups to invest in JV or wholly owned foreign units. Taking the advantage of low cost and disciplined labour, abundant alloy, materials and chemicals resources with less environmentally restricting regulations this foundry industry In less than ten years of opening up in 1989 - nearly 32 IMF, several dozens of DISA.MBD, several Inductotherm, Pillar and several units of auto pour, mixers, sand reclaim systems, pattern design centers, shot blasting, die casting, heat treatment technology poured into China. So much so that several foreign owned suppliers began negotiating with the local government for setting up local manufacturing units in China. Rough finished castings exported to some degree but nearly 90% of the castings produced locally were consumed within China used in both domestic and foreign invested industrial goods suppliers. The casting statistics approach still old fashioned, not much change. Robust growth with more direct investments from foreign foundries.