Wires and cables play a crucial linking role in my country's infrastructure construction. With my country's continuous development, the traditional industry model is no longer suitable for the ever-changing market and demands of the power cable industry. Therefore, for many companies, industry transformation is imperative.
While my country's wire and cable industry continues to develop, seven major problems severely restrict its healthy and sustainable development.
First, there is an oversupply of low- and mid-range products and a shortage of high-end products. my country's power cable industry has approximately tens of thousands of companies, but most are small-scale with low product quality. Few companies have the capability to win bids for key national projects. There are significant shortages of wires and cables in some special and critical fields, requiring reliance on imports when needed.
Second, there is significant duplication of production and construction, resulting in overcapacity. Wires and cables are relatively easy to produce, with low market entry barriers. In recent years, during the urban and rural power grid renovation projects, some companies "seized the opportunity" and rushed into the market; even the power sector competed to build factories for production. In recent years, the rapid pace of national infrastructure construction and the continued boom in the real estate industry have led to the emergence of numerous enterprises that produce the same products as others, resulting in product duplication and overcapacity.
Thirdly, local protectionism and monopolies are rampant, and the market lacks regulation. Due to overcapacity in the wire and cable industry and fierce market competition, some local governments engage in local protectionism, forcibly requiring the use of locally produced products; some power departments only use products from their own system or those of their affiliated companies, making it difficult for other enterprises to enter the market. Some regulatory departments also only inspect products from other regions, not local or system-specific products, creating unfair competition. In the low-to-mid-end wire and cable market, where technological added value is relatively low, price-cutting competition is quite common. Some "workshop enterprises" lacking the necessary production capacity, quality control, and testing methods have managed to infiltrate the industry, becoming the source of counterfeit, substandard, and inferior cable products. They disrupt market competition by lowering sales prices, exacerbating disorderly competition within the industry.
Fourth, rising raw material prices, coupled with intense market competition, make it difficult for cable products to increase prices, hindering the survival of enterprises. The main raw materials for the wire and cable industry are copper and aluminum, whose prices, while fluctuating in recent years, have maintained a continuous upward trend. Coupled with rising energy, transportation, and labor costs, the production cost of wires and cables continues to increase. To maintain profitability and production, some enterprises are forced to cut corners, lower product standards, and even produce counterfeit and substandard products.
Fifth, insufficient R&D investment and inadequate innovation capabilities. Some cable companies are short-sighted, focusing on production expansion and increased output, unwilling to invest funds and intellectual capital in developing new products, especially high-precision products; they also neglect improving product quality and building brand reputation. This results in domestic cable companies lacking independent intellectual property rights, being dependent on others for key technologies, and experiencing slow development of high-end technologies and products. Statistics show that only 30% of domestically produced cable brands have reached a level acceptable to the international market and capable of competing. The lack of professional talent, the reluctance of graduates from relevant universities to work in small and medium-sized cable enterprises, the prevalence of untrained employees in private enterprises, the severe shortage of technical innovation personnel, and the lack of dedicated funds for product research and innovation in most enterprises all contribute to insufficient independent technological innovation and prominent product structure contradictions among domestic cable manufacturers.
Sixth, low-price bidding hinders the healthy development of the cable industry, with downstream enterprises tying up significant amounts of upstream capital. In bidding processes, downstream customers often prioritize low prices, leading cable companies to engage in dumping at low prices to survive, ordering standard products while supplying non-standard ones. These downstream customers are often powerful large clients, tying up substantial amounts of cable companies' funds and impacting the normal operation of the entire industry.
Seventh, the numerous and complex requirements for cable grid access overwhelm cable companies. While wires and cables are essential products across industries, their performance requirements vary, leading to various restrictions on cable products entering the grid. Those without grid access qualifications are prohibited from use, forcing cable manufacturers to spend considerable human, material, and financial resources annually on these numerous qualification certifications. For example, even the most basic cables require a production license, low-voltage wires require mandatory 3C certification, mining cables require safety certification from the coal mine system, indoor communication cables require a network access license from the telecommunications bureau, television cables require a network access license from the broadcasting and television department, LAN cables for computer networks require a network access license, and flame-retardant and fire-resistant cables require a filing and approval certificate from the fire department, and so on. Even more concerning, some products require licenses from several user departments simultaneously. Companies are exhausted from obtaining various network access qualifications, and their product marketing costs increase significantly.
