Firstly, there was the global financial crisis, followed by the eurozone debt crisis. Over the past two years, the operating environment for power equipment manufacturing companies has been complex and ever-changing. In the process of fully responding, enterprises have begun to strengthen cost control to enhance their ability to resist risks.

No enterprise likes a complex and ever-changing business environment, but not liking it does not mean they cannot benefit from it. The current economic environment faced by the power equipment manufacturing industry is causing headaches for business operators and forcing them to enhance their risk resistance capabilities.

Since 2009, many power equipment manufacturing companies have been recruiting "cost supervisors" - to develop cost budgets and control cost expenditures. Although cost control has always existed in power equipment manufacturing enterprises, various signs indicate that enterprises have recognized the importance of cost control and are seriously adopting this method.

Since the beginning of this year, the problem of "shortage of migrant workers" has become increasingly prominent. From the perspective of the manufacturing industry, this issue that requires the whole society to address means that the labor costs of Chinese enterprises (including power equipment manufacturing enterprises) are constantly rising.

Furthermore, today's power equipment manufacturing enterprises are not only facing an increase in labor costs, but also a comprehensive cost increase in raw material costs, labor costs, and social costs.

In the power equipment industry, the cost of steel and non-ferrous metals such as copper and aluminum accounts for approximately 70% to 80% of the raw material cost.

According to data released by the China Iron and Steel Industry Association and the Nonferrous Metals Industry Association, prices of steel, copper, and other materials have been continuously rising since 2005. For example, copper prices have risen from 20 yuan/kg in mid-2005 to 54 yuan/kg in early April of this year. Although copper prices have since fallen due to the impact of debt crises in some eurozone countries, the price of 43 yuan/kg at the beginning of June this year is still at a relatively high level compared to historical prices.

In addition to raw material costs, labor costs and social costs are also becoming increasingly prominent. The labor cost mainly manifests as worker wages, while social costs include product marketing costs, channel expansion costs, etc.