Shaanxi SOE | Hanjiang Tools: Firm on Reform, Collective on Development

"We have deeply engaged in industry-academia-research collaborations with Xi'an Jiaotong University and Xi'an Technological University. Currently, we have completed tasks such as the design optimization and tooth profile modification calculations for cylindrical gear cutters, as well as refining the cutter design software. Additionally, we’ve developed several advanced software tools for calculating complex tool geometries, which are now being applied to the production of high-precision, intricate cutting tools."

"We have jointly established, with Xi'an Technological University, an integrated and shared service platform for intelligent manufacturing technology in the complex tool industry. This platform focuses on key research areas such as building an industrial internet connecting critical nodes and equipment throughout the complex tool manufacturing process, developing specialized information models for advanced tools, and constructing comprehensive lifecycle databases."

At the turn of the year, amid the depths of winter's coldest days, researchers at the newly integrated Tooling Research Institute—part of QinChuan Group’s Hanjiang Tools—were presenting clusters of data and reporting on the progress of collaborative R&D projects. The conference room buzzed with an especially vibrant atmosphere of innovation, rigor, and practicality, reflecting the institute’s commitment to cutting-edge engineering and development.

Since last year, Hanjiang Tools has actively implemented the initiative to deepen and enhance state-owned enterprise reform, leveraging its strong academic and industrial advantages to strengthen industry-academia-research-application collaboration. This has enabled the company to drive continuous improvement and innovation, focusing efforts on transformation and upgrading. As a result, Hanjiang Tools has established collaborative partnerships with leading universities such as Xi'an Jiaotong University, Xi'an Technological University, and Shaanxi University of Science and Technology. Together, they have successfully developed cutting-edge products—including high-precision gear hobbing cutters, helical internal gear rack broaches, carbide leaf-root broaches, ultra-small-modulus high-precision solid carbide hobbing cutters, shaping cutters, and gear-cutting tools—accelerating the creation of a robust ecosystem for commercializing scientific and technological innovations. This strategic move positions Hanjiang Tools as a key hub for fostering new forms of productive forces.

It is reported that Hanjiang Tools, a landmark high-tech enterprise in China's tool industry, serves as the nation's leading research, development, and manufacturing base for large-scale, precision, and complex cutting tools. The company boasts industry-leading technology and scale in the production of advanced gear-cutting tools. Over the years, Hanjiang Tools has earned numerous prestigious accolades, including the national "May Day Labor Award," recognition as a key "Little Giant" enterprise specializing in niche and innovative products, a National Quality Benchmark Enterprise, one of the Top 10 Most Carefully Crafted Brands in China's Machine Tool Industry, a Hidden Champion Enterprise in Shaanxi Province, a Shaanxi Provincial Manufacturing Single-Champion Enterprise, and a Shaanxi Provincial Demonstration Enterprise for Technological Innovation.

Facing complex and evolving global economic dynamics, as well as upgrading market demands, Hanjiang Tools in 2024 has diligently implemented the spirit of the Third Plenary Session of the 20th Central Committee of the Communist Party of China and the provincial-level economic work conference. With the determination to "make tough choices," the company has taken a multi-faceted approach—focusing on technological innovation, reshaping its product portfolio, enhancing quality, restructuring its organizational framework, and revamping its compensation and talent systems—to continuously strengthen its independent innovation capabilities, elevate product quality and service standards, and unlock the enterprise’s core growth drivers. Through these reforms, Hanjiang Tools is committed to driving high-quality development and striving to build itself into a modern, century-old enterprise with even greater competitive edge.

Innovation leads, collaborative problem-solving drives product upgrades and expands market opportunities.

To swiftly respond to market changes and secure a long-term leadership position in the industry, Hanjiang Tools is leveraging collaboration as a catalyst for driving innovation at an even higher level. The company has partnered with Xi'an Jiaotong University to establish a cutting-edge R&D team focused on next-generation gear tools and advanced digital manufacturing technologies, along with post-processing techniques tailored for high-performance gear tools. Through advancements in theoretical frameworks, innovative design solutions, optimized manufacturing processes, and the integration of emerging technologies, the team aims to pioneer the development of top-tier gear tools and seamlessly integrate digital design methodologies into the gear tool industry. In 2024, the company achieved significant milestones by launching 10 new product developments and introducing 10 groundbreaking process innovations. Additionally, it successfully completed three key provincial-level new product development projects in Shaanxi Province. Currently, the company is actively involved in two major national and provincial-level research initiatives, while also leading three critical R&D projects within the group. Furthermore, it secured two authorized invention patents and filed applications for four additional patents.

Hanjiang Tools places great emphasis on industry-academia-research collaboration and technological innovation. Currently, the company has recruited 20 highly skilled technical professionals and is actively collaborating with Xi'an Jiaotong University to build a "scientist + engineer" team. Together, they are already advancing initiatives such as digital design of complex cutting tools, high-precision manufacturing, and personalized coating solutions. Proactively leveraging project-based approaches, Hanjiang Tools is systematically developing an innovative "industry-academia-research-application" consortium to attract and nurture talent capable of breaking through critical technologies—talent that will drive the company’s growth in new technologies and emerging industries. To address the challenge of insufficient high-level R&D expertise, the company has established the Hanjiang Tools R&D Center at the QinChuan Group·QinChuangYuan Base, drawing in top-tier researchers to strengthen its internal capabilities. At the same time, Hanjiang Tools has adopted an open, integrated training model that combines internal development with external partnerships and collaborations, fostering a robust technical talent pipeline while broadening the knowledge and skill sets of its R&D teams.

Reduce costs, boost efficiency, and embrace lean management to reignite fresh momentum for business growth.

Hanjiang Tools continues to drive the development of a modern enterprise system with Chinese characteristics, strengthening and refining its governance and control framework. This initiative aims to boost corporate vitality, enhance decision-making and execution efficiency, and accelerate integration into the new development paradigm. In terms of organizational structure, the company has restructured its departmental setup, reducing the number of functional units—from 20 to 16—across areas such as R&D, quality control, logistics, CTJ, value engineering, and international trade. At the same time, clear delineations of authority and responsibility have been established for each department, effectively resolving issues of overlapping duties and bureaucratic delays that previously hindered productivity, thereby streamlining operations. Additionally, to strengthen market positioning, Hanjiang Tools has merged Wuhan Sales Co., Ltd. into Changsha Hanjiang Tools Sales Co., Ltd., while integrating Chongqing Hanjiang Tools Sales Co., Ltd. into Chengdu HanGong Tools Sales Co., Ltd. These strategic moves not only help cut operational costs but also bolster the company’s overall competitiveness and significantly improve its ability to respond swiftly to market demands.

The deeper reform progresses, the more complex and acute the conflicts of interest become—each "hard nut" proves increasingly difficult to crack, making every step forward a challenging endeavor. Hanjiang Tools is fully committed to driving reforms in its comprehensive performance evaluation system, closely aligning with the development strategies and business objectives of QinChuan Group and the company itself. To refine the performance assessment framework, the company is shifting from a single economic responsibility contract-based evaluation model to a new mechanism that prioritizes KPIs and key tasks, while still incorporating elements of the traditional economic accountability system. Guided by principles such as "adhering to holistic assessments with a strong emphasis on accountability, embracing dynamic evaluations that highlight timeliness, and ensuring rational assessments that seamlessly integrate accountability with fault detection," the company has successively formulated its own *Performance Evaluation Management Measures*, along with unit-specific KPI targets and critical task guidelines. Additionally, detailed *Economic Responsibility System Assessment Rules* have been issued to guarantee the timeliness, standardization, completeness, orderliness, and effectiveness of all initiatives. These measures aim to fully motivate employees and managers, fostering greater creativity and engagement, ultimately enhancing the company’s operational efficiency and steering it toward high-quality, sustainable growth.

Tailoring compensation to individuals, rewarding hard work with higher earnings, and inspiring key talent to drive the company's success.

To align with the company’s reform and development goals, Hanjiang Tools has engaged experts to conduct a series of research analyses, discussions, and statistical assessments tailored to the organization’s current situation. This initiative aims to further broaden employees’ career advancement opportunities, emphasize the incentive-driven nature of compensation, and fully unlock the innovative potential within our workforce. In 2024, the company undertook comprehensive salary system reforms across multiple employee segments, including R&D, management, sales, middle-level management, and frontline roles. These changes are firmly grounded in the core evaluation principles of "more work, more pay; more skills, more rewards; more performance, more gains," with the framework designed around several key dimensions—such as job value, individual competencies, and overall work performance—to enhance employee assessment and career progression. The revamped compensation system will be rolled out gradually across different modules starting in 2025. By offering competitive salaries, we aim to attract top talent and build a stable, high-performing team. Additionally, the introduction of performance-based incentives will effectively align individual goals with organizational objectives, fostering mutual growth for both the company and its employees. Moreover, Hanjiang Tools has consistently prioritized attracting and nurturing highly educated and skilled professionals—a philosophy that has remained steadfast over the years. To proactively develop employees with critical operational expertise and optimize workforce positioning, the company has organized five management training sessions, one engineering and technical workshop, 10 new-employee training programs, 18 internal trainer workshops, and five pilot apprenticeship initiatives. This year, through a combination of social recruitment, campus hiring, and online job postings, the company achieved record-breaking numbers in terms of applicant volume, educational qualifications, and technical backgrounds—all of which have significantly bolstered our ability to secure top-tier R&D talent. This robust talent pipeline not only supports the company’s immediate needs but also lays a solid foundation for sustained growth and innovation in the years ahead.

Hanjiang Tools has adopted tailored strategies, proactively adjusting and refining its employee incentive mechanisms to continuously unlock staff potential. The company has also strengthened the role of its R&D team by fostering innovation, launching a variety of creative R&D and technological initiatives. As a result, Hanjiang Tools has successfully mastered key technologies such as alloy tool edge passivation, high-precision integral indexable hobbing technology, and complex profile arc machining and inspection techniques for gear hobs. Additionally, the company has developed innovative products including indexable gear hobs, indexable gear milling cutters, carbide tenon-and-mortise broaches, high-efficiency chamfering tools, chamfering turning and gear-cutting blades, and advanced CNC cutting tools with intricate profiles. These breakthroughs have not only addressed critical challenges in post-processing complex tools but have also resolved several core technical issues related to tool design, manufacturing, and quality control, laying a solid foundation for the company’s ongoing product upgrades and modernization efforts.

Leading by example, uniting hearts and minds, and harnessing new momentum for transformative growth.

The Hanjiang Tools Party Committee firmly commits to arming itself with Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, strengthening the integration of Party building into business operations, solidifying its role as a robust fighting fortress, and fostering exemplary leadership among Party members. Guided by the principle of "Party building leading the way in tackling tough challenges," the committee aligns its efforts by letting production and operations "pose the questions" while Party building "provides the solutions." This approach empowers teams, unlocks potential, and actively explores innovative pathways to deepen the synergy between Party work and business management. In addition, the committee has launched a focused, company-wide initiative called "Dual Leadership and Dual Innovation," encouraging grassroots Party branches to lead members in driving efficiency gains, while individual Party members inspire broader teams to embrace innovation. This initiative is already underway, with continuous follow-up on 10 projects completed in the first half of 2024. By doing so, the committee is steadily enhancing both the "fortress index" of grassroots Party branches and the "pioneer index" of individual Party members—effectively addressing critical bottlenecks and persistent, long-standing issues that have proven difficult to resolve. With the political roadmap set, cadre quality emerges as the key factor determining success. To align with broader reform objectives, Hanjiang Tools has established a scientific and transparent mechanism for competitive recruitment and appointment of managerial personnel. The company has revised several key policies, including the "Mid-Level Cadre Performance-Based Adjustment and Incompetence Exit System," the "Company Mid-Level Cadre Competitive Recruitment System," and the "Management Measures for Selecting and Cultivating Reserve Cadres." These reforms are helping to standardize and institutionalize cadre management practices, ensuring greater professionalism and accountability across all levels of leadership.

Strict cadre assessment is an essential requirement for the regular and sustained management of cadres. Hanjiang Tools regularly evaluates its cadres monthly, enabling the company to promptly grasp their work performance, accurately assess their contributions, and strengthen process-oriented management. This approach has fostered a robust operational mechanism characterized by clear accountability, strong leadership, smooth workflow, and comprehensive support systems. Meanwhile, the company has vigorously promoted open competitive recruitment for cadre positions, refining its reserve cadre management framework. As a result, several cadres born in the 1980s and 1990s have successfully advanced into key managerial roles through this transparent process, while dozens of outstanding young employees have been added to the organization’s talent pool of future leaders.

Reform is an ongoing process—it never truly "finishes." QinChuan Group Hanjiang Tools will continue to deeply study the spirit of the 20th National Congress of the Communist Party of China, the Third Plenary Session of the 20th Central Committee, and the provincial economic work conference. We will earnestly translate the strategic blueprint for further comprehensively deepening reform into practical initiatives that drive state-owned enterprise reform and foster technological innovation. This will also ensure we take concrete actions aligned with the critical directives from the province and the Provincial State-owned Assets Supervision and Administration Commission regarding the development of the equipment manufacturing industry. "We will redefine reform through heightened awareness, and in turn, elevate our awareness through reform," we’ll proactively nurture and develop new, high-quality productivity, continuously building the "HanGong International Brand—a century-old legacy." Together, we’ll strive relentlessly toward our mission of replacing imported products with world-class, domestically produced excellence, while working tirelessly to establish ourselves as a globally recognized, industry-leading enterprise of unparalleled distinction.

Source: Shaanxi State-owned Assets