Analysis of the status of China's measurement instrument companies' comprehensive strength

In the operation of the national economy, instruments and meters are multipliers to increase labor productivity, and have a huge radiation effect and influence on the national economy.

At present, the vast majority of domestic instrumentation products are at the international level in the early and mid-1990s. The mid-range and low-end product varieties are basically complete, capable of mass production and stable in quality. However, foreign companies’ mid-range products and many key components account for more than 60% of the domestic market share. Large-scale and high-precision instruments and meters rely almost entirely on imports.

According to a report from the National Institute of Technology and Standards (NIST) of the US Department of Commerce, the industrial value of the instrumentation industry in the United States accounted for only 4% of the total industrial output value in the 1990s, but its impact on the national economy (GNP) reached 66%.

The gaps in the comprehensive strength of enterprises in these areas mainly include the following aspects:
The general lack of investment in corporate technology development. As almost all domestic enterprises are small and medium-sized enterprises, they cannot support sufficient long-term investment in technological innovation in human and financial resources. Taking scientific instruments as an example, the development investment of foreign companies in general accounts for 10% of sales, while China only accounts for 3%.

The labor productivity of enterprises is low. As instrumentation is a high-tech industry, the role of low labor costs is not obvious. The management level of domestic enterprises is generally lower than that of foreign companies. Therefore, the productivity of enterprises that manufacture high-tech products is far lower than that of foreign enterprises.

The scale of the industry is small, and the total output value of the measurement control and instrumentation industry is low. Not only is the absolute amount small, but the proportion in the total economy is also very small. In 2003, the total output value of domestic instruments and meters only accounted for 0.82% of the gross domestic product (GDP) and 1.79% of the total domestic industrial output value. According to a report submitted by the National Institute of Technology and Standards (NIST) of the US Department of Commerce, the United States’ industrial production value of instrumentation accounted for 4% of the total industrial output value in the 1990s. The vast majority of companies in the instrumentation industry are SMEs. There are 1887 enterprises above designated size in the industry, with less than 15 annual sales of more than 1 billion yuan. The total number of employees in the industry is 510,000, and there is a lack of "flagship" companies with comprehensive strength. The domestic companies' single product market has strong operating capability but lacks comprehensive strength. Neither manpower nor financial resources can compete with foreign multinational groups in the market. Therefore, it is in a weak position in market competition. The company lacks engineering capabilities for large projects.