Shanghai Xinfen — Survival Experience of a Small Foundation Engineering Enterprise

Shanghai Xinfen Electronic Technology Co., Ltd. — Mr. Tao

The moss flower is as small as a grain of rice, yet it too learns to bloom like the peony.

Yuan Mei, Qing Dynasty

Fine rain drifted like silk over Jiading District, Shanghai. Pedestrians came and went in twos and threes, strolling aimlessly beneath the lush green trees. It was already midsummer, yet the scene was just like the current foundation engineering industry—bereft of its former bustling vitality. The editor of China Deep Foundation Engineering visited Shanghai Xinfen Electronic Technology Co., Ltd., stepped into the small, simple yet tidy and clean office, to hear the development history of a niche industry, and to draw a lesson for the foundation engineering industry on how small enterprises survive.

Seated comfortably on the sofa, we listened to Mr. Tao recount the story of the electronic control industry. His words drifted out the window; the fine rain fell silently, yet like a string of beads it threaded the story together, traversing past times and spaces:

This is an era in which every industry is striving for "technological self-reliance."

There was a time when, unable to independently produce tunnel boring machines, we had to rely on imports and were thus "choked at the neck" for as long as 70 years—until 2015, when China's first independently developed large-diameter tunnel boring machine emerged, breaking a technological monopoly of nearly a century. When building the Hong Kong-Zhuhai-Macao Bridge, lacking relevant domestic technical reserves, we had to seek cooperation with foreign companies—only to find the other party not only demanding exorbitant terms but also refusing to transfer technology. Unwilling to concede, the Chinese persevered through years of research and finally overcame the difficulties, achieving independent immersed-tube tunnel construction and even setting a "China speed" of installing ten sections a year...

Shanghai Xinfen products

In the arduous journey from a manufacturing giant to a manufacturing power, such examples are too numerous to count. To this day, many of our technologies remain constrained—the motor control industry, for instance. Because China's power electronics technology started relatively late, some core components of motors and electronic controls still lack full independent production capacity, leaving a considerable gap between the power density of domestic motor controllers and that of foreign products; we are still at the stage of crossing the river by feeling the stones.

Around 2000, many people's understanding of motor control remained at the simple level of "switching" or "adjusting," believing that electronic control systems were merely tools for turning equipment on and off or adjusting speed. By then, however, motor control technology in developed countries was already quite mature, with notable advances in motor control algorithms, control devices, and system integration.

For example, American motor controllers led in algorithm optimization and system integration, German motor controllers were renowned for high precision and reliability, and Japanese motor controllers held unique advantages in miniaturization and energy saving. These foreign brands dominated the motor controller market, and their products won broad user recognition in performance, reliability, and service.

Shanghai Xinfen products

During this period, constrained by domestic technical levels and market awareness, the application scope of motor controllers in China was relatively narrow. Some industries still applied motor controllers at a low level without fully tapping their potential, and little was invested in product and technology R&D. The production efficiency and product quality of domestic motor controllers often could not match those of foreign brands.

In 2004, as China's high-speed rail construction entered an era of large-scale development, the motor control industry ushered in upgrading and transformation. Electro-hydraulic integration technology—an innovation combining the advantages of power electronics and hydraulic transmission—began to be widely applied in motor control.

In 2006, China's construction machinery industry developed rapidly, and the concept of electronic control technology spread throughout the industry. Leading enterprises such as Zoomlion, Sany, and XCMG successively adopted electronic control technologies and products. As a result, Finland's EPEC controllers and related technologies were introduced to the Chinese market. EPEC controllers feature a high degree of automation, enabling precise control of motor control systems; their modular design is compact, and high-performance microprocessors can operate in harsh environments with extremely high adaptability and durability. The brand's rich product line has enabled its equipment to be widely used in fields such as construction machinery, building machinery, lifting machinery, special vehicles, and heavy trucks.

Shanghai Xinfen products

Over time, however, the shortcomings of imported products and technologies became increasingly exposed—notably in technical support, response speed, and product matching, where obvious "unaccustomed to local conditions" issues arose. Demand was often great, but service could not keep up. This forced the industry to find another way—a mode of cooperation that could both meet functional needs and maintain service on the same wavelength. Thus was born the Sino-foreign hybrid model of secondary development and utilization of EPEC products.

After 2010, a large influx of foreign capital entered China's electronic control market, dealing a heavy blow to the domestic market. At the same time, foreign entry cultivated and reserved many talents for China's electronic control industry. During the same period, a large number of small project-oriented companies emerged domestically, mainly providing services to specific industries in the form of imported hardware + independent programming + technical support.

In the decade that followed, the electronic control industry entered a stable era of "a hundred flowers blooming." By 2019, demand for aerial work platforms and related safety equipment surged. Existing standardized production models could not meet the control needs of special equipment, and personalized customization emerged, driving the segmentation of the motor controller industry. It was under such circumstances that Shanghai Xinfen Electronic Technology Co., Ltd. was born.

In recent years, to break through foreign technological restrictions, the Chinese government has rolled out a series of policies encouraging technological innovation and industrial upgrading. Major national science and technology programs such as the "863 Program," the "973 Program," and later "Made in China 2025" provided funding and policy support for technological breakthroughs and industrial upgrading in the electrical control system industry. Meanwhile, domestic enterprises began to increase R&D investment, actively introducing and absorbing advanced foreign technologies, and striving to enhance their independent innovation capabilities.

In the fine rain, at the entrance of Shanghai Xinfen

The fine rain brought everyone back from the past to Shanghai Xinfen's office. Pointing to the company's sign, Mr. Tao said: Shanghai Xinfen was founded upholding the original aspiration of responding to the national call for "technological self-reliance."

After the pandemic, China's economic growth slowed significantly. Under such conditions, Xinfen's founding team chose to face difficulties head-on and go against the tide. During this period, many enterprises in the electronic control industry fell into difficulty: market demand shrank, projects became harder, and price competition grew fiercer. Shanghai Xinfen chose to focus on the narrower track of non-road construction machinery control, concentrating on providing customers with complete technical solutions and establishing a firm foothold in the industry with the most thoughtful prices and high-quality service.

Based in Shanghai and backed by the most cutting-edge information channels, the company cultivates the market deeply, gains an in-depth understanding of customer needs, and continuously optimizes its products and services. With solid technical strength and quality service, it has won customers' trust and praise, thereby making a name for itself in the industry. Relying on strong technical support and outstanding stability, its products are sold as far as Heilongjiang, Xinjiang, Hainan, and other regions.

In recent years, as the state has invested in R&D of electronic control technologies, domestic products have improved greatly. But we must admit that China's independent motor controllers still lag considerably behind foreign ones in power density, chip integration design, thermal management design, and other aspects. There is still a long way to go toward technological self-reliance. Yet he believes that, as enterprises continue to increase R&D efforts, the gap with foreign companies will gradually narrow.

Shanghai Xinfen workshop

The fine rain, which had originally drifted only over Jiading District, Shanghai, gradually spread outward, extending over more than a hundred kilometers to reach Zhejiang. That is, to Hangzhou, less than two hundred kilometers from Jiading District, Shanghai, where in the Qing Dynasty the talented scholar Yuan Mei once wrote: The moss flower is as small as a grain of rice, yet it too learns to bloom like the peony. However small a flower may be, it has its complete growth process and structural organization, and precisely because it is small, it may possess even greater vitality than the opulent peony.

Adhering to three principles

Mr. Tao, raised in such a cultural atmosphere, said: What gives Shanghai Xinfen—a company of only a dozen or so employees—such strong vitality is the three principles they uphold:

First, Focus:

Operating only in a niche industry, serving special machinery. About twenty enterprises nationwide compete in this space. Though there is pressure and intense competition, the target customers are relatively precise and stable—and among them are many leading construction machinery enterprises, such as Sany and CRRC.

Shanghai Xinfen products

Second, Completeness:

Providing customers with close, full-package service—from on-site inspection to meeting discussions, to manufacturing, to installation, to after-sales service—a tightly integrated service chain that gives customers maximum convenience. With this full-package service, Xinfen's electronic controls are found everywhere from frigid Qiqihar in the north to humid Hainan Island in the south, from the undulating waters of the East China Sea in the east to the dry, windy Ali region in the west.

Shanghai Xinfen products

Third, Affordability:

Product prices are relatively low, yet the projects they are applied to are by no means easy. Low prices are not meant to disrupt the market; rather, most of these projects are ones that many peers declined because the price was too low, or simply did not want to take on. But Xinfen, as a startup, had the courage to take on these projects and completed them relatively well.

Shanghai Xinfen products

These three approaches to the market are, like Shanghai Xinfen's products, simple yet powerful.

Interview summary

The fine rain fell as before, tirelessly. Mr. Tao turned to his summary, showing not the slightest fatigue: "We are just a small enterprise, a small company. Facing numerous difficulties, we must keep striving."

Shanghai Xinfen workshop

Outside the window the fine rain continued, connecting heaven and earth, having witnessed all manner of things in the world—and also the rise and fall of the foundation engineering industry. Some people come, some go. Some grow very big yet suddenly vanish; some remain very small yet persevere. Just like a tiny moss flower full of vitality—if magnified dozens of times, it might be even more enchanting than a blooming peony.

When an enterprise knows that it is small, it is no longer small.