I. Economic Operation Situation of the Friction and Sealing Materials Industry in October In October 2012, the production and operation situation of the entire friction and sealing materials industry showed a downward trend. Among them, the production and operation situation of the sealing materials industry was slightly better than that of the friction materials industry. The friction and sealing materials industry maintained stable production and operation. The output value of the friction materials industry decreased by 3.8%, while the output value of the sealing materials industry turned around and rebounded by 20%. The profit of the friction materials industry decreased by about 7%, and that of the sealing materials industry decreased by about 19%. The output of leading products in the friction materials industry decreased by 8%, while that in the sealing materials industry increased by 20%. The proportion of asbestos-free products in the entire industry continued to rise. The export delivery value of the friction materials industry decreased by about 17%, and that of the sealing materials industry decreased by about 14%. The sales revenue of the friction materials industry decreased by about 9%, and that of the sealing materials industry decreased by about 3%. Reasons: Mainly affected by the international economic situation, the supporting of main engines and export orders decreased, and the international demand declined, which dragged down the friction and sealing materials industry. The prices of some raw materials rebounded and workers' wages increased, leading to rising costs. In addition, due to the long holidays of National Day and Dragon Boat Festival, the number of effective working days decreased, which also had a certain impact on production and sales. II. Forecast and Countermeasures for the Development Trend of the Industry The development of the international economic situation is not optimistic. China's economy will linger at the bottom for a period of time. The automobile and motorcycle industry is closely related to the friction and sealing materials industry. In October, the production and sales of automobiles in China fell month-on-month; the growth rate of major economic benefit indicators of automobile enterprises slowed down; the production and sales of motorcycles decreased significantly; and motorcycle exports continued to decline. The friction and sealing materials industry will continue to be squeezed by the dual pressures of weak market demand and rising raw material prices, and the development trend is not optimistic. We will guide enterprises to practice internal skills, tap internal potential, reduce costs, and enhance anti-risk capabilities. At the same time, we will expand international exchanges, expand international influence, broaden export channels, and increase export orders. In addition, we will restrict the expansion of production capacity in the industry, stop low-level redundant construction, and guide large enterprises to merge and reorganize small and medium-sized enterprises, so as to expand industrial concentration and realize large-scale production.