EM – China has emerged as the world’s second-largest economy with the potential to defy all limits, and within this most populous nation, the domestic elevator industry has truly become a colossus in almost every aspect.
Development History
The development of China’s elevator industry lagged behind those of developed countries in Europe and the United States and can be divided into three stages:
Initial Stage – Striving for Self-Reliance (1950 – 1979)
Before the founding of the People’s Republic of China, the number of elevators in China was only about 1,000, primarily concentrated in cities such as Beijing, Shanghai, and Tianjin, and was largely controlled by American companies.
In 1951, the Chinese government proposed installing a domestically made elevator in Tiananmen Gate Tower. Four months later, the private Tianjin Electromechanical Equipment Factory successfully produced China’s first domestically made elevator.
From 1952, China has established three elevator manufacturing plants in Shanghai, Tianjin, and Shenyang, and simultaneously established related research institutes to conduct comprehensive scientific research on various types of elevators such as passenger elevators, freight elevators, and high-speed elevators.
Opening Up Stage – Dominance of Foreign Brands (1980 – 2000)
With the reform and opening-up policy in the 1980s, the Chinese market was fully opened, attracting many of the world’s leading elevator companies to invest and build factories, creating a new driving force for China’s elevator industry, which was still relatively backward at that time.
In 1980, Switzerland’s Schindler entered China and established the first joint-venture elevator company. Since then, foreign brands have successively joined and begun to dominate the domestic elevator production market through wholly-owned or joint-venture modes, aiming to consolidate and capture the domestic elevator market share.
During this period, many Chinese private enterprises also began to enter the elevator manufacturing industry. Initially, they produced supporting components for foreign-funded enterprises, and then these enterprises learned and absorbed advanced technologies in the production process, accumulated capital, and improved management levels, gradually transforming into complete elevator manufacturing enterprises.
Development Stage – The rise of Domestic Brands (2000 to present)
Since the early 1990s, China’s elevator industry has made significant strides through continuous learning, research, and development, driven by economic reforms and technological advancements.
During this period, the China Academy of Building Research took the lead in developing complete elevator technology and provided it to more than 30 domestic manufacturers, laying the foundation for the country’s elevator development.
Entering the 21st century, some Chinese elevator companies have achieved a certain scale, such as Canny Elevator, Jiangnan Jiajie, Yuanda Intelligence, and Meilun Elevator.
To date, the national elevator industry has made significant improvements in technology, management, etc., and has built a complete business chain from research and development, design, manufacturing, to installation and maintenance.
Especially in the low to medium-speed elevator segment, with high economic efficiency and strict quality requirements, they have gradually broken the dominance of foreign elevator companies in the domestic market, while also gradually penetrating the international market and establishing a certain position in this market.
Characteristics of China’s Elevator Industry
A Massive Domestic Market
According to the China Elevator Journal, as of 2024, China has nearly 11 million elevators (including vertical elevators, escalators, and moving walkways) in operation, accounting for 43% of the global total. The annual demand for new elevator installations exceeds 1 million units, representing 62% of the global new installation market. New elevator installations in China serve various projects such as: Real estate development; Technical and industrial infrastructure; Retrofitting elevators in old apartment buildings and replacing old elevators.
This demand is expected to continue in the coming years with a negligible decrease.
Additionally, the operation and maintenance of 11 million elevators present a huge aftermarket (maintenance and repair, modernization, and replacement). According to the GF Securities Research and Development Center, the current maintenance market size is 50-60 billion RMB (approximately 7-8 billion USD), and the Compound Annual Growth Rate (CAGR) of the market size is expected to be nearly 10% in the coming years.
Market Share Dominated by Major Players
As mentioned above, China’s elevator manufacturing industry is currently participated by all major global elevator companies alongside domestic brands. These enterprises are divided into four groups:
According to the China Elevator Association, citing the Asset Information Network – Qianji Investment Bank, in 2023, international brands accounted for approximately 70% of the domestic market, while domestic elevator brands accounted for about 18% of the market share in terms of sales. The remaining market share is divided among small and medium-sized private companies.
China Elevator Market Share by Sales Volume
Mastery of Production from the ‘Upstream’
China’s elevator industry is not simply about manufacturing elevators.
Their supply chain starts at the “upstream” level, which means producing raw materials and components for elevators. Key materials used in elevator manufacturing include steel and rare earth elements. Steel is used for cabins, frames, top and bottom beams, cabin doors, elevator doors, etc., while rare earth elements are essential for the permanent magnets in traction machines.
Next comes the production of finished elevators, followed by the “downstream” market of distribution, new elevator installation, and maintenance, repair, and replacement services.
Statistically, while a significant portion of elevators installed in China are produced by foreign manufacturers, the raw materials, components, and equipment used in their production are supplied by Chinese companies to a large extent, both for domestic Chinese and global manufacturers.
This is likely a key advantage that China leverages to explain its open-door economic policy.
The Structure of China’s Elevator Market
The slowdown of real estate development projects in the coming years
According to regulations, buildings taller than 20 meters must be equipped with elevators. Real estate was once a driving force for the development of the elevator industry in China. In 2023, the number of elevators installed for real estate development projects accounted for 62% of the total market.
The density of real estate development projects in recent years has driven the development of the elevator industry in China.
However, according to forecasts, this number will decrease in the coming years due to the weakening real estate market, and by 2026, the demand for elevators for this type of property is estimated to be only around 41%.
Demand for large-scale elevator replacements
While China doesn’t have specific regulations regarding elevator lifespan, the average lifespan of an elevator in China is only 15-20 years. After this period, elevators become “aged,” experience frequent breakdowns, and pose safety risks. Maintenance costs for old elevators are significantly higher than those for modernization or replacement.
Boosting exports
One factor driving the development of the Chinese elevator industry is the export market, with approximately 100,000 units exported each year. While this constitutes an insignificant portion compared to the domestic market (less than 10%), it is a sector that the government is prioritizing for development and is expected to experience growth in the near future.
Their main markets include Russia, the Middle East, and Southeast Asia.
Subsidies for retrofitting elevators in older residential buildings
Before 2000, China constructed a large number of mid-to-low-rise residential buildings without elevators. According to new construction standards, these buildings must be equipped with elevators, and local governments have specific policies to promote addressing this issue.
Installing additional elevators in existing buildings is a policy to drive the development of the elevator industry in the upcoming period.
We will delve deeper into this topic and other related issues in subsequent articles.
Editor’s Note: The content in the series “Looking at the World” refers to training materials from Korea Lift College (KLC) transferred to the Vietnam Elevator Association as part of the international certified elevator technician training program.
For more details about the training program, please refer to: International certified elevator maintenance technician training program.
