The wire and cable industry is a crucial supporting industry for my country's economic development, widely used across all sectors of the national economy. Wire and cable are essential components for transmitting electricity, conveying information, and manufacturing various motors, electrical appliances, instruments, automobiles, machine tools, and other equipment. They provide infrastructure for the power and communications industries, accounting for a quarter of China's electrical industry output and the second-largest sector in the machinery industry after the automotive industry. They hold a crucial position in the national economy.
What is the current status of wire and cable development in China?
Among the more than 20 sub-sectors of the electrical and appliance industry, the wire and cable manufacturing industry is the largest in terms of output value, accounting for a quarter of the total. The development of China's wire and cable industry exhibits two key characteristics: overall, the industry's overall scale is growing; and from a structural perspective, power cables continue to account for a growing proportion of the industry, suggesting a relatively optimistic market outlook for power cables. With the rapid development and continued expansion of China's power, petroleum, chemical, urban rail transit, automotive, and shipbuilding industries, particularly the accelerated transformation of power grids and the successive construction of ultra-high voltage (UHV) projects, the wire and cable industry has seen rapid growth, with an average growth rate of 27.62% from 2006 to 2010, far exceeding the GDP growth rate. The total industrial output value of the wire and cable manufacturing industry increased from 413.161 billion yuan in 2006 to over 925.5 billion yuan in 2010. my country has become the world's largest country in terms of both wire and cable manufacturing scale and market consumption.
In recent years, the proportion of my country's wire and cable manufacturing industry's total industrial output value to GDP has steadily increased, exceeding 2% in 2007. It declined in 2009 due to the impact of the international financial crisis, reaching 2.31% by the end of 2010. The wire and cable industry is playing an increasingly important role in the national economy.
What will be the future of China's wire and cable industry?
my country has a large number of small wire and cable companies, resulting in a low degree of industry concentration. This is evident in the following: China's wire and cable industry comprises over 9,000 large and small enterprises. In 2010, among the 4,765 wire and cable enterprises with a scale of 5 million yuan or more, 29 large enterprises held only 14% of the market share. This highly fragmented structure not only makes it difficult to achieve economies of scale but also exacerbates overcapacity and excessive market competition.
The regional distribution of enterprises in my country's wire and cable industry is also very distinct, with a primary concentration in East China, Central China, and North China, while the central and western regions have a smaller presence. East China's cable industry is the most prominent, accounting for half of the industry, and boasts significant advantages in scale, strength, and revenue.
The capital structure of my country's wire and cable industry is becoming increasingly diversified, with the position of state-owned and state-controlled enterprises weakening and the proportion of private and foreign-funded enterprises increasing significantly. In the production of medium and low voltage wire and cable, domestic private enterprises have become the dominant force. According to 2010 statistics, privately held enterprises in the wire and cable industry accounted for 69% of output value, 75% of the total number of enterprises, 55% of employees, and 71% of profits and taxes. Large-scale projects using wire and cable generally select suppliers through bidding. Large foreign-owned cable companies, due to their technological advantages, still hold an advantageous position in some sectors. Meanwhile, private enterprises, leveraging technological innovation, cost advantages, and flexible mechanisms, have gradually increased their market share. The growing strength of the private sector has driven market-oriented operations within the industry.
Power cables, electrical equipment wire and cable, and winding wires comprise the majority of the domestic wire and cable industry's product mix, and are primarily used in sectors such as power, communications, construction, transportation, automotive, shipbuilding, and home appliances. Among the major categories of wire and cable products in my country, as measured by conductor usage, power cables, electrical equipment wire and cable, and winding wires account for 89% of the industry's total copper usage, while copper usage in product categories such as communications cables is lower.
