The Pain of China's Construction Machinery: The Woe of High-End Hydraulic Components, Where is the Way Out?

As the largest single market in the world at present, the domestic construction machinery market has attracted the attention of all the world's leading construction machinery companies. Although the domestic construction machinery market has been in a sluggish state in recent years due to various reasons, a lean camel is still bigger than a horse. Despite the market remaining sluggish, the world's leading construction machinery giants and a host of domestic construction machinery heavyweights are still fiercely competing. Under decades of rapid development in China, the huge infrastructure market has enabled domestic leading construction machinery enterprises such as XCMG, Zoomlion and Sany to grow into world-class companies capable of competing head-on with global giants like Caterpillar and Komatsu. However, beneath the prosperity, there are still blemishes. In the most competitive high-end hydraulic sector of the entire construction machinery industry, domestic brands still lack sufficient competitiveness, or even have no competitiveness at all.

Now let's take a look at the top ten liquid brands in the world. 
Bosch Rexroth: As an outstanding representative of Germany's Industry 4.0, Bosch Rexroth has won the trust of global customers with its comprehensive hydraulic solutions and excellent service quality. Its products hold leading positions in the fields of automation control, mobile applications, and industrial transmission. 
2. Parker Hannifin: As a century-old American company, Parker Hannifin has accumulated profound technical expertise in the fields of hydraulics, pneumatics, and fluid power transmission and control. Its product line is extensive, offering comprehensive solutions ranging from basic components to complex systems. 
3. Eaton: Eaton is renowned worldwide for its efficient hydraulic systems and filtration technologies, and is committed to providing innovative and sustainable energy solutions to customers globally. Its products can be found in various fields such as aerospace, automotive, and heavy trucks. 
4. Kawasaki Heavy Industries: As a Japanese industrial giant, Kawasaki Heavy Industries has outstanding performances in both hydraulic technology and robotics. Its hydraulic products are widely used in construction machinery, injection molding machinery, and ships, among other fields. 
5. Danfoss: Danfoss from Denmark is renowned for its innovative technologies in refrigeration, heating, drive control and hydraulics. Its hydraulic products are highly favored in the market for their efficiency, energy conservation and environmental friendliness. 
6. Atos: Atos, an Italian company, is a world-leading manufacturer of hydraulic components and systems, specializing in providing high-performance hydraulic solutions for industrial automation and mobile machinery.
7. Bucher Hydraulics: Bucher Hydraulics from Switzerland is renowned for its precise hydraulic systems and components, and holds a significant position in fields such as agricultural machinery and food processing machinery. 
8. Yuken Industry: Yuken Industry of Japan is a leading expert in hydraulic control technology. Its products are widely used in various fields such as machine tools, injection molding machines, and construction machinery. 
9. Sauer-Danfoss: As a subsidiary of Danfoss, Sauer-Danfoss specializes in the research and production of mobile hydraulic systems, providing efficient hydraulic power solutions for automobiles, trucks, and construction machinery. 
The top nine brands in the world are all foreign brands. In recent years, Hengli Hydraulic, which has rapidly developed domestically, currently ranks tenth.
Hengli Hydraulics: As a leading company in the Chinese hydraulic industry, Hengli Hydraulics has achieved remarkable success in technological innovation and market expansion in recent years. Its products are exported both domestically and internationally, making it a source of pride for Chinese hydraulic brands. 
Although Hengli has achieved remarkable results, there is still a long way to go for Hengli in some core and high-end hydraulic components. For instance, in the core static pressure units of the CVT transmission in construction machinery, there is currently only one supplier in the world, which is Bosch Rexroth. It is easy to imagine that our gap is still quite significant. 
I wonder if anyone still remembers the 311 earthquake in Japan in 2011. Although the earthquake occurred on the Japanese mainland, for China's construction machinery industry, that year it was the earthquake that vividly exposed the embarrassing and tragic shortage of core hydraulic components under the prosperity, which was the sorrow caused by the lack of core components. 
At present, China is rising at an astonishing speed and has become an important player in global manufacturing. From excavators, loaders to cranes, Chinese-made construction machinery products are found all over the world, demonstrating the strong strength of Chinese manufacturing. However, behind this glorious achievement lies a problem that cannot be ignored - the reliance and lack of high-end hydraulic components. This is not only a headache for China's construction machinery industry, but also a key bottleneck restricting its advancement to a higher level. 
I. High-end Hydraulic Components: The "Heart" and "Soul" of Construction Machinery 
Hydraulic components, as one of the core components of construction machinery, their performance directly determines the operational efficiency, stability and service life of the entire machine. In heavy equipment such as excavators and loaders, the hydraulic system plays the role of the "heart" and "soul", responsible for key functions such as power transmission and control execution. High-end hydraulic components, with their features of high precision, high reliability and long service life, have become an important indicator for measuring the technical level of construction machinery. 
However, for a long time, the Chinese construction machinery industry has been in a situation of being "dependent on others" in the field of high-end hydraulic components. Imported hydraulic components have dominated the market, especially brands from countries like Germany and Japan, which have won the favor of many domestic mainframe manufacturers with their advanced technology and excellent quality.
II. The Tragedy of China's Construction Machinery: The Pain of Being "Held Back" by High-End Hydraulic Components 
High technical barriers: High-end hydraulic components involve multiple disciplines such as materials science, precision manufacturing, and fluid dynamics, and the technical requirements are extremely high. Foreign enterprises have accumulated long-term technical knowledge and made significant research and development investments, thus forming a strong technical barrier. This makes it difficult for domestic enterprises to break through within a short period of time. 
Incomplete industrial chain: The research and production of high-end hydraulic components require a well-developed industrial chain as support, including multiple links such as raw material supply, precision processing, assembly and testing. The domestic related industrial chain is still not complete, resulting in frequent problems such as high production costs and unstable quality. 
Market perception bias: Some domestic enterprises have the notion of "emphasizing the mainframe while neglecting the supporting components". They invest insufficiently in the research and development of key components such as hydraulic parts, resulting in low market recognition and difficulty in establishing a brand effect. 
The international trade environment is complex: With the increasing complexity of the international trade environment, the import of high-end hydraulic components faces numerous uncertain factors, such as tariff adjustments and trade barriers, which further exacerbates the supply chain risks of domestic enterprises.
III. The Path to Breakthrough: From "Lagging Behind" to "Tie-Down" and Even "Leading" 
Facing the "blockade" problem of high-end hydraulic components, the Chinese construction machinery industry is actively seeking solutions and striving to achieve a transformation from "lagging behind" to "keeping pace" and even "leading the way". Although Wuxi Changan has acquired the German Linde hydraulic technology and together with domestic company Hengli, they have formed the strongest local hydraulic force, the current gap between us and the world's leading giants mentioned earlier is still quite obvious. 
In the face of the gap, we can only increase research and development investment and break through technical bottlenecks: The government and enterprises should increase investment in the research and development of high-end hydraulic components, encourage the deep integration of industry, academia, research and application, and concentrate efforts to overcome key technical difficulties. At the same time, strengthen cooperation and exchanges with international advanced enterprises, introduce, digest, absorb and innovate, and enhance independent innovation capabilities. 
Improve the industrial chain layout and enhance the industrial collaboration capabilities: Strengthen the cooperation and coordination among enterprises at all links of the industrial chain, and promote the formation of a complete industrial chain layout covering raw material supply, precision processing, assembly and testing. By optimizing resource allocation and improving production efficiency, reduce production costs and enhance product quality. 
Strengthen brand building and enhance market recognition: Domestic enterprises should focus on brand building by improving product quality and optimizing after-sales services, thereby establishing a brand image. At the same time, they should strengthen market promotion and publicity efforts to increase market recognition and brand influence. 
Promoting domestic substitution and reducing supply chain risks: While ensuring product quality and performance, actively promote the application of domestic high-end hydraulic components. Through policy guidance and market incentives, accelerate the process of domestic substitution. At the same time, strengthen cooperation and integration with the international market to expand overseas market space.
IV. Conclusion: A Promising Future, The Rise of China's Construction Machinery Industry 
Although the "choking" problem of high-end hydraulic components is severe, the Chinese construction machinery industry is bravely and resolutely facing this challenge with unprecedented determination. With the continuous advancement of technology and the increasingly complete industrial chain, the Chinese high-end hydraulic component industry is bound to usher in a period of rapid development. In the future, the Chinese construction machinery industry will, relying on its independent innovation capabilities, occupy a more important position in the global market and contribute to the realization of the dream of becoming a manufacturing powerhouse. 
In this non-violent battle, every participant is an important force driving the advancement of China's construction machinery industry. Let us work together, overcome difficulties hand in hand, and jointly witness the glorious future of China's construction machinery industry!