China’s Tool Exports Face Reform: New Paths Still Need to Be Explored

Now we must make another shift, from the export of single sets of household twist drills to the export of various industrial cutting tools according to segmented markets. Only by doing so can our export path avoid becoming narrower and prevent thousands of competitors from fighting for the narrow bridge of high-speed steel household twist drills.

Not long ago, someone asked me for my opinion on China’s tool exports, and I was momentarily speechless. Honestly, I don’t know much about China’s tool exports. For example, a couple of years ago, I came across some statistics compiled by an industry insider about China’s tool industry. According to the data she gathered, it seemed that China’s tool exports mainly consisted of high-speed steel twist drills, with the rest almost negligible in total volume.

I am not sure if these statistics are accurate, but it is almost certain that in terms of metal cutting tools, high-speed steel twist drills dominate China’s exports.

I remember that a couple of years ago, at a cutting technology forum, a relatively senior industry friend posted about how some foreign tool buyers came to China looking for cheap products, not quality ones. She really couldn’t understand. Based on her experience working in foreign enterprises for many years, she believed that foreigners, on the whole, are not the type to simply seek the lowest price at the expense of quality. If that’s the case, why did she encounter some foreigners who, to some extent, seemed just like some of our domestic buyers who care only about bargaining and don’t care about quality?

In reality, foreigners are certainly not the type who only want cheap products without regard to quality. It’s just that for many years, our tool industry has mostly been exporting sets of household twist drills that are of not-so-high quality at increasingly lower prices, to countries like the United States. As a result, some Americans don’t really understand the level of China’s tools and think that we can only produce these sets of twist drills. If we want to sell other types of tools, the middlemen in the U.S. are either unfamiliar with or don’t trust China’s other tools, or their client base is mostly non-industrial customers like those of supermarkets, making it difficult or at least very hard for them to promote our other tool products.

Have the U.S., Europe, and Japan stopped using high-speed steel products? The answer is no. I remember reading materials from the Fourth World Tool Conference a couple of years ago, where it was noted that the consumption of high-speed steel tools in industries in the U.S. and Japan was about 30%, with Germany slightly higher. In Germany, the consumption of high-speed steel and carbide drill tools is roughly equal, while for milling cutters, the ratio is about 30-70, with carbide prevailing. Reamers and other tools are somewhere in between. From this, it is clear that the high-speed steel tools, which we are somewhat good at, still have a place in the market.

However, using regular high-speed steel to produce standard twist drills may be an effort that doesn’t pay off. Developing specific products according to the needs of segmented users is an important aspect of making customers feel that our products meet their needs, and therefore, they are willing to pay for them. In terms of product development for high-speed steel twist drills, Germany’s Cobalt company could be our role model. When I left Shanghai Tool Factory, a leading company in China’s high-speed steel twist drill industry, in 1997 to join the German company Walter, I saw that Walter had many collaborations with Cobalt. Almost every situation requiring high-speed steel drill bits would first choose Cobalt products. I was surprised when I saw the Cobalt samples. To me, a twist drill, which was originally simple to the point of being almost too simple, had countless variations at Cobalt. When I worked at Shanghai Tool Factory, I had designed so-called non-standard twist drills for customers, but that was just a change in diameter and length. At Cobalt, the variations, from geometric flute shape, point angle, and side cutters to materials, coatings, and internal coolant holes, were overwhelming. Fortunately, they had a lot of technical guides, so selecting the right drill bit wasn’t difficult.

Now, we must make another shift, from exporting single sets of household twist drills to exporting a variety of industrial cutting tools according to segmented markets. Only in this way can our export path avoid becoming narrower and prevent thousands of competitors from fighting for the narrow bridge of high-speed steel household twist drills.