Five year's ago, Britain's largest machine tool firm, 600 Group, contracted Dalian Machine Tool Group, based in northeast China, to assemble products with no brand name.

Now the UK company is selling products under the Dalian Machine Tool Group brand.

What led to the turnaround? Dalian Machine Tool Group relied on innovation to bypass foreign restrictions on technology sales to China and learned to produce high-end products, said Wu Bolin, Secretary-General of the China Machine Tool and Tool Builders' Association (CMTBA).

In May, a delegation from the 600 Group, including 23 senior management, technology and marketing personnel, visited Dalian Machine Tool Group.

They decided during the visit that they would use their worldwide marketing network to sell the Computer Numerical Control (CNC) machine tools produced independently by Dalian Machine Tool Group.

A machine tool is the base for manufacturing industrial equipment and the CNC system is computer integrated manufacturing technology. CNC machine tools employ modern electronic information technology as the control system.

The first CNC machine tool was developed at the Massachusetts Institute of Technology in 1952. However, China only started researching the field in the 1980s. Now, 50 percent of the global high-end CNC machine tool market is dominated by Japan and 25 percent by Germany.

CNC machine tools are widely used and essential in aerospace, power generating, ship building and other high-tech and defence industries. This was why some countries imposed restrictions on exports of core technologies to China.

"You cannot gain a position on the world arena by following suit all the time. You must possess your own competitive technologies and products," said Chen Yongkai, chairman of Dalian Machine Tool Group.

The company has been followed by about 20 other domestic CNC machine tool producers. Shenyang Machine Tool Group, based in northeast China, has made breakthroughs in five-axis numerically controlled machine tools.

The five-axis numerically control system is the most sophisticated and the most widely-used machine tool technology, able to perform many high-precision manufacturing processes.

At the 10th China International Machine Tool Show (CIMT) in Beijing in April, two sets of five-axis numerically controlled machine tools from Shenyang Machine Tool Group attracted attention from foreign companies.

During the start-up stage, Chinese machine tool enterprises relied on taking in advanced experience and learning from industry leaders. "However, we were not able to take in core technologies, so we had to depend on ourselves to blaze the trail," said Wu.

"After several years of independent innovation, Chinese machine tool makers have mastered the core technologies and turned out world-class products," said Yu Chengting, deputy secretary-general of the CMTBA.

Those products have been widely used in the nation's key projects, including the Three Gorges Project, the Shenzhou-V space mission and China's first magnetic levitation (maglev) rail track.

CMTBA figures show China is now the world's largest machine tool consumer and third in terms of output value after Germany and Japan.

However, some Chinese buyers prefer imported products, claiming the functions and reliability of China's high-end CNC machine tools still need improving and lag behind those of the market leaders from Germany, Japan, the United States and Italy.

Of the 2,000 sets of high-end CNC machine tools sold in China in 2006, only 10 were made by domestic enterprises, CMTBA statistics show.

Domestic enterprises are still endeavoring to step up independent innovation to enhance competitiveness and product quality.

"We will introduce domestic products to more projects. Chinese machine tool makers should provide better training on how to use those products and excel in quality to compete with the market leaders," said Yu.

China's robust economic growth has brought bright prospects for domestic machine tool manufacturers. CMTBA forecasts show that by the end of 2010, the market demand for CNC machine tools will stand at 100,000 sets, but domestic enterprises still have a long way to go to fully establish themselves in the market.