A detailed analysis of why China is a major cable manufacturing country?

In recent years, China’s economy has grown continuously and rapidly. It not only provides a huge market space for the development of the communication optical cable industry, but also creates favorable conditions for the communication optical cable industry to accumulate capital, technology, and talents. The infrastructure construction of the communications industry is in full swing, and the broadband and cable TV networks and the two-way transformation of the cable television network are in rapid development. As an important branch of communications equipment, communication cables also develop rapidly with the development of the Chinese communications market. After 2000, China's communications cable market continued to grow at an annual rate of 15-20%, making it the fastest growing communications cable market in the world. In 2008, the total output value of China's communication cable has surpassed that of the United States, ranking first in the world, and it is a veritable country for the manufacture of communication cables. However, China is far from being a strong country in wire and cable manufacturing.

After 30 years of reform and opening up, China’s telecommunications cable industry has generally maintained a relatively good upward trend. The good market prospect has attracted a large number of foreign-funded enterprises. They have successively established joint ventures in China to build factories. The domestic competitive landscape has undergone tremendous changes. With the gradual withdrawal of state-owned enterprises and the vigorous development of private and foreign-funded enterprises, these foreign-funded enterprises have played a catalytic role in the improvement of China's wire and cable manufacturing and output, and have gradually narrowed the gap between China's wire and cable manufacturing technology and foreign advanced standards. However, as most domestic enterprises concentrate on the production of low-end products, and the products in the middle and low-end markets are seriously oversupply, and the competition of enterprises depends on mutual price reduction, the entire industry still suffers from low production concentration, disordered market competition, low technological development investment, weak development capacity, and qualified products. The low rate and characteristics of special wire and cable also depend on imports, and the overall competitiveness and profitability of the product are weak.

On the whole, the repeated investment in the industry of China's telecommunication cable, blind follow-up and follow-up phenomenon is very serious, the production capacity is oversupply, the contradiction between supply exceeding demand is prominent, and the market competition is fierce, especially in low-end communication with relatively low technology added value. In the cable product market, coupled with the sharp increase in raw material prices in the past two years, the degree of competition in the market has increased. At the same time, the development of the communications cable industry in various regions is uneven (mainly in Jiangsu, Zhejiang, and Guangdong), and the development of enterprises in various regions is not balanced. Some large enterprises have a large sales volume in the construction of national backbone communication networks. In the low-end products and local markets have their own regional markets and influences, the entire communications cable market has the problem of redistribution and integration. At the same time, due to the establishment of technological innovation systems involving enterprises as lagging behind the pace of economic development, China’s telecommunication cable manufacturing and manufacturing sectors lack the capacity for independent innovation, and key technologies are subject to human control. This has also seriously constrained China’s telecommunication cable manufacturing to high-end and branding. The direction of development.

From the point of view of the demand for communication cable products, the global market is maturing, and the overall market demand has dropped by about 5% annually. In addition, the increase of 40%-85% in raw material prices, especially the increase in the prices of copper, aluminum and plastics, has directly affected the line. The cost structure of the cable production industry indirectly affects the profits of manufacturing companies. In addition, the industry’s production capacity is excessive, buyers lack initiative, and they form a buyer’s market. Market prices will naturally have a downward trend, and price competition is inevitable. However, the information and communication industry is a sunrise industry full of vitality and vitality. The network economy also has a strong vitality. The development of information technology and network technology has become an important driving force for social progress. Domestic network construction has covered all 31 provinces in the country. In cities and most townships, the development of the information industry has provided a broad market for communication cables. According to the latest statistics from the China Internet Information Center, by the first half of 2009, the number of Internet users in China had reached 338 million, including 320 million people with broadband Internet access, ranking first in the world. The growing high-speed transmission and broadband services have increased the demand for data communications cables in China.

From the perspective of the supply of communication cable products, the world's communications cable industry has formed a pattern of monopolistic competition among several giants. However, the rapid development of the Chinese economy and huge market space and potential have attracted foreign brands to enter the Chinese communications cable industry one after another. They use various leading advantages such as capital, technology, and management to occupy the commanding heights of the market, participate in the domestic market through joint ventures or wholly-owned methods, and aggravate domestic industry competition; the concentration of domestic domestic cable industry is very low, and there are small However, there are many problems such as poor scale effect and outstanding product structural contradictions, which mainly center on low-profit low-end products and fierce competition. While foreign counterparts are seizing market share, their advanced experience in cable manufacturing, process improvement, and corporate management has also provided domestic companies with opportunities for learning, which is beneficial to domestic cable companies to improve their market competitiveness.

Judging from the development trend of the telecommunication cable industry, due to declining demand, the cable industry’s relative capacity surplus, intensified competition among enterprises, and the sharp increase in prices of major raw materials, many small cable companies are struggling or even withdrawing from the market. A few giant monopoly competition patterns. China's telecommunications cable industry can only expand its industrial scale, improve the level of industrial clusters, and achieve product structure optimization and high-end technology through technological advancement. A number of companies with good product quality, high-grade equipment and large production scale can compete in the competition. Occupy a firm market position to adapt to the development trend of industry demand. From the perspective of product development trends, the introduction of the triple play policy, the acceleration of NGB network construction in radio and television, etc., to accommodate the development of high-speed data access telecommunications networks, and the need for data communication cables extending from indoors to outdoors, data communication cables have With the trend of large logarithm development, at the same time, traditional local telephone cables will also develop toward high frequencies, and traditional local telephone cables and digital communication cables will further converge, which is an important development trend.

In general, due to the replacement of optical fiber and cable in the communications cable industry and the reduction of expenses for related investments by operators, the market capacity is declining year by year. “Light advances into copper” has become a major trend in the industry. Competition is intensifying and it faces a price war. Threats. However, due to recent national policies to improve the construction of urban and rural broadband networks, the integration of triple play networks, and the construction of next-generation radio and television network (NGB) networks, the nation’s construction of smart grids and other major trends has eased the cable to some extent. As the industry's market is shrinking, there is still room for cable industry to seize opportunities.