Reform, Private Capital and the Golden 15 Years: The History of China's Pump Industry (Part 2 of 3)
In the 1980s, China entered its reform and opening-up period, and the Chinese pump industry entered a stage of rapid growth.
During that period, the industrial pump sector carried out a new round of joint design and achieved product upgrading. Importing advanced foreign products and technologies became common practice in the pump industry. With the support of the First Ministry of Machine Building and the provincial departments, major industrial pump plants successively introduced 18 pump products and manufacturing technologies. These included well submersible pumps from Germany's Ritz; Warman slurry pumps; KSB boiler forced-circulation pumps; vertical mixed-flow pumps from Japan's Ebara; screw pumps from Germany's Allweiler; petrochemical process pumps from the United States' Byron Jackson; mining multistage pumps from the United Kingdom's Mather & Platt; KSB hot-water circulation pumps; water-ring vacuum pumps from Germany's Siemens; oil pipeline pumps from the United States' Bingham-Willamette; MS multistage pumps from Japan's Ebara; corrosion-resistant pumps from Sulzer; drilling mud pumps from the United States' LTV; marine reciprocating pumps from KSB; offshore oil platform centrifugal pumps from the United States' Mather & Platt; non-clog spiral vortex pumps from Ebara; and corrosion-resistant pumps from France's Jeumont-Schneider.
Together with the industrial pump licensing system implemented from 1984, these introductions greatly raised the manufacturing level of industrial pump plants. On 19 May 1987, the State Machine-Building Commission formally announced, in Document No. 84 (Ji Wei Gui), the backbone enterprises of the industrial pump sector: Shijiazhuang, Shenyang, Changsha and Shanghai pump works, Dalian Acid-Resistant Pump Works, Dalong Machine Works and Shenyang Foundry. The major enterprises were the Beijing, Yangquan, Benxi, Harbin, Boshan, Wuhan, Foshan, Chongqing, Baoji and Lanzhou pump works, Tianjin Industrial Pump Works, Shanghai No. 1 Pump Works and Zhejiang Vacuum Equipment Works - 20 in total. Adding the seven backbone and major agricultural pump enterprises, there were 27 pump plants in all.
In the 1980s, China's supply, production and marketing systems were being reformed: fiscal investment was changed from grants to loans, and materials prices were split into a dual-track system of planned prices and market prices, as the state pursued a policy of opening to the outside world and revitalizing the domestic economy in the transition from a planned economy to a market economy. After 1985, alongside the 209 wholly state-owned and Second Light Industry collective pump plants, township pump plants sprang up. By 1990, the number of pump enterprises in China had rapidly increased to 949, producing 3.664 million pumps with sales of RMB 3.429 billion, ranking seventh in the world in pump output value - behind the major industrial countries of the United States, Japan, Germany, the United Kingdom, France and Italy.
The 1990s: The Rise of Private Enterprise
In the early 1990s, as the market economy took shape, private pump enterprises emerged and grew rapidly. Especially after Deng Xiaoping's southern tour and speeches in 1992, large numbers of private pump companies appeared, developing fastest in Zhejiang, Shanghai, Jiangsu, Shandong, Liaoning and around Hunan. The private and individually owned pump manufacturers of Wenzhou and Taizhou in Zhejiang were the most typical. Wenzhou's were concentrated in Oubei Town, Yongjia County, later named "China's Hometown of Pumps and Valves" by the China Machinery Industry Association. Taizhou's were concentrated along both sides of National Highway 114 from Zeguo to Daxi in Wenling County. By 1998, Wenzhou had more than 100 pump and valve enterprises with an output value of RMB 1.5 billion, while Wenling had nearly 400 pump enterprises, including individually owned ones, with sales of about RMB 1 billion. They relied mainly on private capital and started out as itinerant traders.
In the last decade of the 20th century, the number of Chinese pump enterprises grew rapidly. By 1996, there were 1,459 pump manufacturers and companies, producing 7.3958 million pumps a year with sales of RMB 12.034 billion.
The Glorious 15 Years
The period from 1998 to 2012 was the fastest-growing and most brilliant 15 years in the history of China's pump industry. During those 15 years, although national economic growth was slow from 1998 to 2001, private pump companies maintained strong momentum. Not only did their numbers grow geometrically - reaching 3,240 companies by 2000 - but their product sales also grew rapidly, gradually leaving state-owned pump companies behind. After 2002, the national economy entered a period of high growth: real estate investment, industrial investment and foreign trade all grew rapidly. Some state-owned pump companies carried out institutional and mechanical reform and, aided by land-value differentials, acquired new land and expanded their plants, taking on an entirely new look and re-emerging as the backbone of China's pump industry. Some private pump companies, through rapid self-accumulation, also achieved high-speed development in product development and manufacturing capability, becoming important forces in the industry. Even more encouraging, a large group of companies - including the world's top ten pump makers - entered China within those 15 years and invested in factories, becoming part of China's pump manufacturing base. They not only brought high-end, scarce pump products to China's pump industry, but also new technologies and new management thinking, promoting the industry's development and technological progress.
In short, the high-speed development of China's pump industry over those 15 years showed three characteristics. Private pump companies were born with the formation of China's market economy and grew as the market system improved, advancing irresistibly. Some state-owned pump plants or companies were eliminated in the tide of the market economy, while others learned to swim, improved themselves and mostly became stronger, remaining the backbone and core strength of the industry. And a large number of famous pump companies, including the world's top ten, invested and built plants in China one after another, promoting progress, prospering the market and becoming part of China's pump manufacturing sector.
According to 2011 statistics from the National Bureau of Statistics, China had 1,116 pump manufacturers with annual sales revenue exceeding RMB 20 million, achieving operating revenue of RMB 153 billion and producing 97.01 million pumps - more than 12 times the 1996 figure. Over 15 years, China's pump industry achieved high-speed development and became the world's largest pump manufacturing country, surpassing the United States. Those 15 years were 15 years of high-speed development and 15 brilliant years in the history of China's pump industry.
