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Pan Wenyue, the Deputy Secretary-General of the Gear Association, said that China's gear industry has made considerable progress in recent years. The production and sales has gained rapid growth, and it is predicted that it will keep more than 15% growth in the next few years. Meanwhile, he pointed out that people should realize that the gear industry must be based on independent innovation and get rid of relying on the resources and the imported technology.

Although this industry has made rapid development, there is still a large gap between the overall level of China's gear industry and that of the developed countries.

Reasons are various. Firstly, the research and development ability of products is far behind, and the industry's mechanism has not been established. Pan Wenyue introduces that the scientific research strengths are rather scattered and the industrialization process of the high-end products is rather slow. Besides, the gear industry lacks of the results-sharing mechanism. Some enterprises invest little in the research and development, and the direct consequence of which is that Chinese companies can only produce low-end products. As to the high-end products, they are mainly imported.

Secondly, the technological level and the management level of products are quite low which lead to a serious problem, i.e. although we spend the same amount of resources and processing costs as the foreign companies, there is still a big gap between the product quality and grade of Chinese products and the foreign companies'. Chinese gears are still in the low end of the price competition stage.

Gear industry is one kind of technology & capital-intensive industries. It still has a long way to go. The Deputy Secretary-General also points out that Chinese gear industry should get rid of dependence on domestic resources.

After the reform and opening up, the government implemented the low-cost & low-tax policy on the production factors such as the capital, labor, land and mineral resources, etc. At the same time, various standards about the environmental protection were very low, thus leading to a resource-dependent development model. Because it was rather easy to enter this industry, the low cost soon became the competitive advantage which provided the companies with benefits for the short-term competition.

But with the expanding of economic aggregate, the land resources is increasing scarcity, energy prices are rising, and the labor costs and environmental costs are rising as well. All of these aspects force the companies to take an innovative road and get rid of the dependence on resources

According to this situation, Chinese gear industry should create an innovative way of its own. Besides, it should get rid of the dependence on the resources and the imported technology.

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