The dual challenges of tariff shock and supply chain restructuringThe escalation of the trade war between China and the United States has had a profound impact on the import and export pattern of China's machine tool industry. According to statistics, China's export value of CNC machine tools to the United States declined by 40% year-on-year in 2024, and orders for high-end products such as five-axis interlocking machining centers were severely lost.In the face of tariff barriers, Chinese machine tool companies accelerated the expansion of the "One Belt, One Road" market, and the export share to the United States fell from 40% in 2018 to 25% in 2024. For example, a Sichuan-based company has recovered the proportion of its exports to the United States to 25% by setting up a transit warehouse in Malaysia, and achieved two-hour fast response services through cross-border e-commerce.A machine tool enterprise in Guiyang through technical upgrading and quality service, in India, Türkiye and other markets to achieve three consecutive years of growth in the export share of the total output value of 20% in 2025.Supply chain restructuring is a key strategy for the industry to address risks.

Chinese machine tool enterprises reduce their external dependence through "home-made core components + regional supply chain coordination." For example, Qinchuan Machine Tool set up a research and development center in Germany, jointly with local enterprises to develop wind power casting processing equipment, and exceeded 200 million yuan in overseas revenue in 2024. Pinghu city adopted the "foreign-funded machinery + domestic-funded support" model, introducing enterprises such as Demagi and Zinshi Precision, forming a 95% support rate in the Yangtze River Delta, completely breaking the closed supply chain of foreign investment. In addition, Swiss companies' supply disruption to China caused their own orders to plummet by 37%, while Chinese companies made up the shortfall through domestic replacements, such as Beijing Precision Art's five-axis high-speed machining center that achieved technical comparison at the Hannover Messe in Germany in 2024, and successfully entered the European market.​​II. Accelerating domestic substitution and technological breakthroughThe trade war forced China's machine tool industry to accelerate the domestic substitution process, and the domestic production rate in the high-end market increased significantly.

In 2024, the market share of domestically produced five-axis machine tools exceeded 50% for the first time, and enterprises such as Beijing precision engraving and Cold Digital Control achieved key breakthroughs in the aerospace field. Codd Numerology's​The core parts of the five-axis linkage machine tool have an independent rate of 85%, and the localization rate of 95%, which has been successfully applied to the processing of titanium alloy parts of the domestic large aircraft C919. Shenyang Machine Tool Works has increased its share of domestic precision machine tools from 10% in 2020 to 50% in 2025, breaking the US-Japan technical blockade.Important progress has been made in the domestic production of core components.​Huzhong CNC's numerical control system has a market share of 25% in the middle market, and Cord CNC's five-axis numerical control systems have passed the "04 special" verification to replace imports in the military industry. However, the high-end market still relies on imports, and the market size of China's imported CNC systems reached 3.7 billion US dollars in 2024, with US products accounting for 32%, and the reliability of domestic high-end CNC systems still remains a gap with Germany and Japan. However, domestic CNC system market share in January to February 2025 for the first time exceeded 60%, Shenyang machine tool i5 intelligent system installed capacity grew 210% year on year, Huazhong CNC 9 axis 5 linkage system has realized the turning and milling machine tool batch application.III. Policy support and industrial upgrading​​National policy support for the machine tool industry continues to increase. The policies of VAT addition and deduction will reduce the tax payable of industrial machine tool companies by 15% of the current deductible input tax, and guide them to increase research and development input.

In 2024, Qiaofeng Intelligent's R & D expenses reached 6.341 million yuan, accounting for 4.36% of revenue, and promoted the upgrading of five-axis machine tool technology. The research and development expenditure of the regulated companies in Pinghu increased by 12.2 percent year on year.​​The construction of industrial clusters and ecosystems has accelerated. Shaanxi, Zhejiang and other places to build CNC machine tool industry clusters, such as Baoji focus on CNC gear grinding machine, turning and milling compound machining center, forming a domestic leading edge; Songming County plans to build a national high-end CNC machine tool industry cluster by 2027, with a value chain of more than 10 billion yuan. The policy also promotes the "industrial mother machine +" link between production and demand, and in 2024, the Ministry of Industry and Information Technology will organize a meeting of 100 companies to promote the application of innovative products.IV. Global market landscape and competitive situationIn the high-end market, Germany, Japan and the United States have strengthened technological barriers through "Industry 4.0" and "Advanced Manufacturing Program," and China is facing a squeeze. For example, German Tfast's laser processing equipment has a global market share of more than 60%, and domestic substitution still needs to break through. However, China's five-axis machine tool exports increased by 23% in 2024, and the trade surplus expanded to US $2.72 billion, showing the improvement of international competitiveness.Emerging markets and technology output are new growth areas. Chinese machine tool enterprises achieve technology export in "One Belt and One Road" countries. For example, Guiyang Xianfeng Machine Tool's CNC roller grinder occupies a dominant position in Indian aluminum foil industry due to its high precision and excellent service. Beijing Precision Five-axis machine tools have entered the Russian aerospace supply chain through technical cooperation.

From January to April, 2024, China's export value of CNC machine tools reached US $98,982,200, an increase of 14.3% year-on-year, and its export value to Russia reached USD 19,975,850, becoming the largest export destination country.V. Technology Gaps and Future OutlookDespite the remarkable progress made, there is still a technological gap between China's high-end machine tools and Germany and Japan. The average fault-free operation time of domestic five-axis machine tools is about 2,000 hours, while the international advanced level generally exceeds 5,000 hours. In terms of machining accuracy, Japanese machine tools can reach 0.1 microns, and high-end CNC machines in China are generally between 1-5 microns. Key components such as high-accuracy ball screw shaft still rely on imports, domestic rate of less than 10%.In the future, with the deepening of policy support, core technology breakthroughs and global supply chain restructuring, China's machine tool industry is expected to change from "scale expansion" to "technology leadership." It is expected that by 2025, the market share of domestic high-end machine tools will exceed 40%, and the market size of five-axis interlocking numerical control machine tools will surpass 13 billion yuan. Enterprises need to accelerate globalization layout and vertical integration of industrial chains, continue to cultivate basic disciplines such as material physics and information fusion, narrow the gap with Germany and Japan, and become an important force for global manufacturing upgrading.