Who cares if it's a downturn? Beautiful scenery is still the product's intention. But who can ignore the current "unfavorable" situation in the hydraulic industry—declining growth, soaring inventory, and serious overcapacity of low-end production—times are tough.
This is a hydraulic enterprise that seems to have not had much "luck," described by its founder, Cao Yong, as "operating in pain." Yet, this small enterprise has tackled the tough nut of servo proportional hydraulic valves. Academician Lu Yongxiang once commented that this is a "small giant" specializing in the Chinese hydraulic industry.

Article | By Chen Xuewan, Staff Reporter

His WeChat signature reads: "In the days to come, I will focus on one thing." I subjectively linked "this thing" with Radk-Tech and hydraulic valves.
February 18th, ten years ago, was far less clear than today. "It was snowing heavily when Radk-Tech opened." If we follow the fashionable calculation, it's still an Aquarius. "To be honest, slow-paced, low-key, and demanding of oneself," it matches quite well.
The office is in black and white tones; the two photos of him and his children in the corner caught my attention. Cao Yong strode in. He took off his coat, changed into his work clothes, and brewed a cup of coffee, his movements skillful. If it weren't for the reporter's visit, his workday would begin like this.
Why is it "dangerous" reverse driving?
For liberal arts students, advanced engineering terms and principles are always like a computer encountering an unrecognizable mobile device. Even with prior preparation for the interview, it's still overwhelming. Cao got straight to the point, starting the explanation and interpretation on the display board. The entire interview and exchange revolved around the "pyramid" he drew.
Why is Noma said to be "dangerous" reverse driving?
It's always from easy to difficult, from shallow to deep, from simple to complex, but Cao Yong broke the convention. It wasn't intentional.
At first, it was "reckless." According to Cao, he started to contact servo valves in 2002, acting as an agent for the American company Moog Hydraulics. Later, he decided to do it himself. However, he didn't know until he tried, and it almost bankrupted him. The factory was built in 2005, and in less than two years, the capital chain broke, and in 2007, it almost closed down. Easier said than done.
"This is a very complex product, very difficult." Looking back, he also considered it a "dangerous approach." "At that time, machining was not good, and there was no good equipment. In terms of materials, domestic materials were not good, and heat treatment was also backward," Cao Yong sighed, "Even if the prototype was made, it was difficult to make a product."
His understanding of "product" is not one or two, but to achieve large-scale consistency and reliability before it can be called a "product."
He thus broke into the top of the servo valve pyramid—"high-end" hydraulic components. "High-end" also means high difficulty, but also high added value.
This is the explanation from Sun Ruihui of Radk-Tech's Engineering Technology Center. It is said that the best servo valves in the world are still made by the American company Moog, considered the ancestor. Sun mentioned that during World War II, the demand for aircraft was high, and fighter jets were getting bigger and bigger. However, human strength is ultimately limited, so valves with higher precision are needed to control the turning and landing of aircraft. After World War II, it gradually shifted to civilian use.
The characteristics of basic components determine the large amount of "doing and enduring" in the early stage, with high investment intensity and slow returns. Cao did experience the "difficulty" of servo valves, but the high added value took a long time to see results. He wasn't afraid of paying tuition fees, stumbling along the way.
R&D alone consumed seven-tenths of Radk-Tech's years. Cao Yong emphasized again, "This process was very painful; I only then knew how difficult it was."
He stood up, lit a cigarette, and returned to my opposite side.
This former agent was also very honest. He said that he didn't have a very long-term and comprehensive strategy and thinking at the beginning; he just chose several models based on market demand, "These models sold very well in China, so I considered doing them. At that time, I just wanted to survive."
To this day, he admits that Radk-Tech's servo valves are still not on the same level as Moog's. Although, his product is already very good domestically.
After the product was made, there was another difficulty: how to be accepted and trusted by customers.
"Being recognized by the host factory and equipping the host is not easy," he raised his voice, his eyes wide.
Sun Ruihui introduced that in the past few years, when the manufacturing industry was booming, especially steel mills, the profit of one day was very high. "They think that imported valves are reliable, so why use yours? It's not much cheaper, and there are risks. If the production line stops, it's a waste of money. Psychologically, they don't want to change." The words are crude, but the truth is not. Industrial products run 24 hours a day, and unless it's a major overhaul, they rarely stop. The inability to stop requires the product to be incredibly reliable.
Difficult as it is, let's start with spare parts.
"We first sold them for emergency use," Sun added, there are two valves on the production line, one is the valve in use, and the other is the spare valve. Radk-Tech started by making spare valves. Step by step, constantly improving, failing, and improving again, until it was gradually accepted and recognized. It seems that this servo valve is a really tough nut to crack.
Today, Radk-Tech's servo valves have entered the steel and metallurgical industry, with China First Heavy Industries, the Second Heavy Machinery Group, the China Metallurgical Group Design Institute, Baosteel, and Shagang among its customers. Leading enterprises in the industry such as China Dongfang Electric Machinery and Shanghai Electric have also become its strategic partners. Hard work pays off.
From an overview, in Cao Yong's drawing, the second layer is the proportional valve. Proportional valves, from difficult to easy, are engineering machinery multi-way valves, industrial application plate proportional valves, and pilot proportional cartridge valves.
Speaking of engineering machinery multi-way valves, Radk-Tech is the only domestic company that has made multi-way valves with electric proportioning. Cao Yong described it as remote control replacing manual operation, which is not just about freeing up manpower, "This is a revolutionary breakthrough."
Taking the difficult pump truck as an example, "The three major domestic host factories (XCMG, Sany, and Zoomlion) are already using our products."
In his opinion, if the pump truck can be used, then others are no problem. Even the foreign rival, Hawe, does not dare to underestimate Radk-Tech; this time, Cao seems very confident.
However, Radk-Tech wasn't so lucky in the engineering machinery supporting market. He frankly admitted that he missed the peak. He invested heavily in multi-way valves but didn't catch the right opportunity. "It was also a problem with our own products," he said. Years of struggling entrepreneurship honed Cao's temperament.
In addition, Radk-Tech's plate proportional valve is also meant to compete with Bosch Rexroth. Cao is currently preparing a pilot proportional cartridge valve, a high-flow pilot proportional cartridge valve, which is expected to be available for sale around May this year.
“What about the bottom level?” I pressed.
Perhaps humor is a good antidote to hardship and weight; he smiled and wrote "Bloodbath," a complete fire sale. In other words, it's a price war, with fierce competition and extremely low profits; this is not what Radk-Tech wants. But at the very bottom of the value chain, China has gathered thousands of competitors.
PwC's "2011 China Corporate Long-Term Incentive Survey Report" mentioned a set of data: According to statistics, the average lifespan of small and medium-sized enterprises in China is only 2.5 years, while that of group companies is only 7-8 years. We can imagine how many business cycles have caused countless enterprises to rise and fall in ten years. Moreover, Norma is a small enterprise that has operated for ten years in pain.
To date, Radk-Tech's product series can replace 80% of imported products in the application areas of domestic industrial equipment. Since 2013, the rapid supporting of Radk-Tech's products has caused the overall sales price of similar foreign products in China to decrease by more than 25%, thus implicitly reducing the cost of mainframe supporting. Going from 0 to 1 is difficult.
Brick by brick, carefully constructed, in Cao Yong's eyes, today's Radk-Tech is only in its initial stage; everything is still in its infancy.
Accumulation, precipitation, and details; this is the supreme inner skill.
The second decade has just begun, and unexpectedly, an economic winter has arrived, especially the downturn in manufacturing, particularly in the engineering machinery industry. Radk-Tech's "luck" seems to be somewhat lacking.
Cash flow is very important for every manufacturing company. Cao Yong frankly stated that he is very worried about money; as long as the business is open, it's about money. Last year, Radk-Tech's sales revenue reached 50 million yuan, with a production capacity of 25,000 units. This is not small for a hydraulic component company. I specifically consulted Sha Baosen, honorary director of the China Fluid Power Association; in his eyes, this is a medium-sized company.
Another cigarette, continue.
Perhaps because he has been used to suffering along the way, Cao believes that the current new normal is the normal state, and Radk-Tech has been facing it with this mentality for a long time.
But after all, they are in the broader environment, and no one can ignore the current downturn. Cao and Sun both said that Radk-Tech is greatly affected by it. Now, sales under the "normal" state only account for 20% of the original planned low sales volume.
"The era in China when it was like 'Crazy Stone' in previous years is gone. Every enterprise needs to rethink its positioning, how to develop its products, and return to a very calm mentality," Cao Yong specifically instructed the reporter to carefully convey this passage, "You can do business well at any time. Make good products, make them exquisite, and the market will gradually accept you. China's manufacturing industry needs to calm down, accumulate slowly, precipitate slowly. If there is a problem with the product, improve it little by little, don't rush to sell it, and don't make too many product types. Just focus on a few, relentlessly pursue the ultimate." Earlier, during an interview with Sha Baosen, he also gave similar advice, hoping that companies could settle down and endure loneliness.
This process is painful and long; Radk-Tech is living proof. But without experiencing the piercing cold, how can one appreciate the fragrant flowers?
In Cao Yong's heart, his only goal is the degree of acceptance by the market and users. He wants to impress customers with confidence in his products and a sincere attitude. "I don't have very strong ambitions and goals; I just want to make good products, improve processes, technology, and defects, and slowly share the market, allowing users to gradually accept them."
The hardship wasn't in vain; the great value of Radk-Tech's ten years is accumulation and precipitation. This is also what makes Cao Yong feel relieved.
Key core basic components in China's equipment manufacturing have long relied on imports, which is a veritable pain point, and high-end hydraulics are the weakness of the hydraulic industry. The tough nut that Radk-Tech has cracked has, to a certain extent, promoted the advancement of hydraulics and even the entire equipment manufacturing industry.
Therefore, on the display board, he forcefully wrote two points: one is "accumulation, precipitation," and the other is "details." I think this is the supreme inner skill.
Years of seemingly "dangerous" reverse driving have honed Radk-Tech's profound inner strength.
He used the pilot proportional cartridge valve as an example, "In the eyes of many manufacturers in China, this is still a relatively high-end product, but for us at Radk-Tech, it's not considered difficult. We are also developing this product; it's not too difficult, and we can launch it soon. The previous technical and process accumulations have allowed us to develop such a product very quickly."
He also said that Radk-Tech has seen things that many peers in manufacturing cannot comprehend.
“Can you tell me?”
“I dare not say; it's just a kind of feeling.”
“Is it confidential?”
“It's not about confidentiality; it's a very comprehensive and complex matter.”
He then changed the subject, “Have you heard about the recent craze of going to Japan to buy toilet lids?”
Wu Xiaobo's article "Going to Japan to Buy a Toilet Lid" caused a sensation, pushing Chinese manufacturing to the forefront.
Although this article has the suspicion of belittling "Made in China," it has to be admitted that it hit our "pain point" hard. Many times when we talk about Japan, Germany, and China, it often represents precision and roughness. This is not "xenophilia" or "ideology"; we need to focus more on how to narrow the gap and better meet market demand. Market demand is the rigid demand.
Returning to hydraulics, both Sha Baosen, the director I interviewed earlier, and the middle-aged entrepreneur sitting across from me now admit that China's products still lack much—equipment, materials, processes, cleaning, deburring, etc.
Perhaps the "feeling" Cao Yong mentioned is the texture of the product, the sense. In his eyes, making a product is the process of transforming a person into a nobleman. "Why can people easily distinguish between foreign and domestic products?" The "rusticity" of Chinese manufacturing in some aspects means a comprehensive backwardness in various aspects.
During a press interview, he became quite emotional twice, stating his intention to "kneel." Why is this?
“If any Chinese company can produce a reliable seal, I, Cao Yong, will kneel before them. Radk-Tech still uses imported foreign products.”
“If any company can produce a refined, qualified electromagnet, I, Cao Yong, will kneel twice. It will take China another five years to achieve this.”
Hydraulic systems often involve high pressure, Sun Ruihui explained. Servo valves typically operate at 31.5M or 35MPa, which is very high pressure (1MPa equals 10 to the power of 6 Pa). Defective products can cause oil leaks.
Electromagnets are electro-signal conversion mediums. Good electromagnets have fast response times and small hysteresis. The workshop foreman specifically compared imported and domestic electromagnets for the reporter, and the test results showed a clear difference.
Of course, the limitations of China's hydraulic industry are not limited to these; the previously mentioned materials, cleaning, and deburring are all factors. “Moog and Rexroth are truly exquisite; any one of their products is excellent,” he said, his words tinged with both admiration and resentment.
Speaking of testing, Cao Yong firmly believes it is the essence of hydraulic components. The testing equipment in the workshop was specially ordered from Germany, costing tens of millions. “We are very clear about the status and results of our products' application at the customer's site. If you can achieve this, you are basically qualified to say that you have made a hydraulic component. Often, many people don't know what problems their products have after use.”
He also has a belief that for a long time, the Radk-Tech factory environment has been even better than the office environment. This is indeed my personal experience; with a casual touch, there is no dust, the floor is sparkling clean, and the tested products are all kept in iron boxes with lids. Attention to detail is evident everywhere.
Last November, the "China Hydraulic Industry Implementation of the Strong Foundation Strategy Project Promotion Conference" was held at Radk-Tech, a clear signal of external recognition of Radk-Tech. The large banner from that conference is still preserved at Radk-Tech, right next to the entrance.
Looking to the future, Radk-Tech remains focused on valves and only valves. “Starting this year, we will devote significant energy to replacing imported products in the special machinery market, industry by industry." The targeted special machinery markets include forging equipment, shield machines, ceramic presses, oil exploration, and high-precision CNC machine tools.

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