The key components are highly profitable, but due to immature technology, Chinese construction machinery enterprises can only give up this cake. Especially the lack of high-end hydraulic components in construction machinery has become a hidden problem in the development of the construction machinery industry.

Currently, the hydraulic components used in excavators weighing over 20 tons in China are mainly controlled by one company, Kawasaki Corporation of Japan. In March 2011, there was an earthquake in Japan. The earthquake in Japan, thousands of miles away, has affected domestic excavator manufacturers.

In March and April of that year, the supply of hydraulic components for Japanese excavators was interrupted, and domestic excavator manufacturers that mainly relied on imported hydraulic components from Japan were forced to slow down their production pace, with some having to shut down. Due to the emergency supply principle of Kawasaki Corporation in Japan, which prioritizes domestic supply over foreign supply, some Chinese OEMs have to seek sources of goods everywhere in order to avoid affecting production progress. Especially for excavator factories that have just started their new round of capacity expansion, as they are not old customers of Kawasaki, their supply needs are even less likely to be met. It is understood that Rongsheng Heavy Industry is one of them. Due to the inability to purchase hydraulic components from Kawasaki, we had to find another way out.

At this point, the brand Jiangshan began to surface.

Jiangshan has two brands, namely Yantai Jiangshan Hydraulic Machinery Co., Ltd. and Jiangshan Hydraulic (Korea) Co., Ltd. (hereinafter referred to as Jiangshan). Although the chairman of Jiangshan, Xu Zhihuan, has a Korean style appearance and behavior, he is a genuine Shandong native. In its early years, it had engaged in import and export trade of mechanical products for many years. Later, it invested in building factories in South Korea, mainly producing key components such as hydraulic parts that were urgently needed for import domestically, and then shipped them to China for sale.

Rongsheng Heavy Industry cannot buy hydraulic parts from Kawasaki, so Jiangshan sells hydraulic parts produced in Korea to them. Su Zimeng, Secretary General of the China Construction Machinery Industry Association, recently returned from a visit to Jiangshan's South Korean factory. In an interview with China Industry News, he stated that Jiangshan sold a total of 400-500 hydraulic components domestically last year.

Jia Xiaowen, Secretary General of the Engineering Machinery Parts Branch of the China Construction Machinery Industry Association, praised Jiangshan: In the past two years, domestic hydraulic parts enterprises have made great efforts to replace imports. Some host manufacturers have joined the ranks of developing key components, and some professional hydraulic component factories have also increased their research efforts. For enterprises such as Jiangshan, the Chinese invest to set up factories abroad, which is also a way to develop national industry.

Due to the gradual development of China's construction machinery industry and the guidance of a series of industrial policies, the liquid and gas tight industry has grown rapidly in recent years.

According to incomplete statistics, in 2011, the industrial output value of enterprises above designated size in China's liquid and gas sealing industry reached 77.271 billion yuan, a year-on-year increase of 21%. The hydraulic industry completed 43.62 billion yuan, a year-on-year increase of 18.47%; The pneumatic industry completed 15.046 billion yuan, a year-on-year increase of 29.60%; The sealing industry completed 18.605 billion yuan, a year-on-year increase of 23.95%.

Among the 125 key contact enterprises in the liquid and gas tight industry, there are 64 in the hydraulic industry, 6 in the hydraulic industry, 40 in the pneumatic industry, and 15 in the sealing industry. The comprehensive economic benefit index is 233.56, exceeding the 226.44 in the same period last year. The total industrial output value of these key connected enterprises was 33.424 billion yuan, a year-on-year increase of 12.94%. Among them, hydraulic enterprises achieved an output value of 14.171 billion yuan, a year-on-year increase of 7.72%; The output value of hydraulic enterprises was 533 million yuan, a year-on-year decrease of 4.77%; The output value of pneumatic enterprises was 8.639 billion yuan, a year-on-year increase of 25.12%; The output value of sealing enterprises was 7.32 billion yuan, a year-on-year increase of 11.14%.

The promising development prospects of the liquid and gas tight industry have also attracted a lot of investment from both inside and outside the industry. According to incomplete statistics, the investment in the liquid tight sealing industry in the past two years has not been less than 30 billion yuan, of which the investment in hydraulic engineering in the main engine industry such as construction machinery accounts for about 50% of the total investment. A group of well-known engineering machinery enterprises such as Sany Heavy Industry, Liugong, Longgong, Zoomlion, and Shandong Changlin have invested in or merged with hydraulic enterprises.

However, the localization of high-end hydraulic components is not achievable in the short term, but rather a long-term goal.