Chinese manufacturer develops its own excavator after foreign rejection

A gigantic digging machine has flown off the production line this April in east China’s Jiangsu province. The machine can shovel 50 tons of coal in one go, and is China’s largest hydraulic excavator that is 100 percent domestically produced.

The machine is able to compete with world-class players, not only in terms of its eye-catching look, but also in the 52 self-developed technologies used to make it, said a person working for its manufacturer Xuzhou Construction Machinery Group Co., Ltd. (XCMG).

The enormous machine is designed to excavate at least 30,000 tons of material per day and operate safely for no less than 60,000 hours. Without a high-standard chassis that level of performance would be unlikely.

XCMG had thought about buying core technologies, such as the chassis, from overseas companies, but none of them were willing to sell, fearing the Chinese company would catch up with them. Then XCMG decided to develop a chassis independently.

Five years later, they succeeded.

Buying one chassis could cost upwards of 15 million yuan. But according to Zhang Hong, deputy general manager of XCMG excavating machinery division, manufacturing a chassis on their own costs about 5 million yuan.

This excavator makes China the fourth country to develop and manufacture hydraulic digging machines independently, after Germany, Japan and the US, said Xu Donghai, deputy mayor of Xuzhou, where the headquarters of XCMG are located.

Another core part of the excavator, the hydrocylinder, is also self-developed. The hydrocylinder has not only broken the monopoly of foreign companies, but also helped to lower prices of their products.

Before, importing a 700-ton hydrocylinder cost 3 million yuan, but now the price is reduced to around 2 million, said Chen Dengmin, head of XCMG Hydraulics Co. Ltd.

China wants 40 percent of necessary parts and machinery to be supplied domestically in the aerospace, telecommunications, power generation and machine industries by 2020, according to the Made in China 2025 initiative.

Core technologies are not to be borrowed or bought. XCMG makes sure that every part of the machine is self-made, so that they won’t concede to foreign companies, Chen Dengmin said.

XCMG Chairman Wang Min said the target of China’s engineering machinery is to become medium-and high-end, and to be high-end, the country must achieve self-innovation. XCMG spends over 5 percent of the total sales revenue on research and development.

In the past, Chinese companies like XCMG spent as much as 40 percent of their manufacturing costs on importing foreign parts, giving 70 percent of profits in the industry to foreign providers.

But the situation is changing. Presently, XCMG products are being exported to 158 countries and regions around the world. In 2017, the company saw substantial growth in exports to countries along the Belt and Road.

China should ramp up investment and channel more energy into research and development to spur the development of the equipment manufacturing sector, Chinese President Xi Jinping said when visiting XCMG in December 2017.