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In recent years, the Chinese wire and cable industry has experienced a significant shift, driven by an industry standard jointly developed by a U.S. cable company and a third-party agency in China. This move is pushing the massive Chinese market into what many are calling the "standard era," raising concerns about whether over 7,000 local companies will be left behind at the starting line.
July 2013 marked a pivotal moment for the Chinese cable industry, as several landmark events set the stage for transformation. At the beginning of the month, Baosheng Group, a major state-owned cable manufacturer based in Nanjing, was acquired by the China Aviation Industry Corporation. The news sent ripples through the industry, sparking questions: Is this the beginning of a long-overdue consolidation in a sector that has historically been fragmented, chaotic, and lacking in quality?
The discussions surrounding these developments have not yet reached a conclusion. By mid-July, a series of “security and innovation†forums began touring China’s four main cable markets—Tianjin, Hangzhou, Guangzhou, and Xi’an—with plans to expand to Zhengzhou, Kunming, and Changsha. These forums brought together experts, scholars, and industry leaders to discuss the future of the sector. The events were lively and well-attended, but what caught many off guard was the organizer: General Cable, a U.S.-based company that had only entered the Chinese market a year earlier.
Headquartered in Highland Heights, Kentucky, General Cable has a 170-year history of producing copper, aluminum, and fiber optic cables for energy, industrial, construction, and communications sectors. In 2012, it generated $6 billion in sales, ranking third globally. In comparison, top Chinese firms like Far East and Shanghai Cable barely exceeded $2 billion. Despite its global stature, General Cable remains relatively unknown in China, partly due to its late entry and strategic acquisition of Alcan Cable in 2012, which allowed it to quickly establish a presence in the world's largest cable market.
Many wonder why a global giant like General Cable would focus on organizing high-profile forums rather than directly pushing its products. The answer may lie in the upcoming industry standard for aluminum alloy cables, jointly drafted by General Cable and the Shanghai Cable Research Institute. This standard, expected to be released later this year, could give the company a strong foothold in shaping the future of China’s cable market.
China’s cable industry has long struggled with a lack of real standards, leading to fierce price wars and low profit margins. With over 7,000 companies competing, most operate in the low-end segment, resulting in a market where “bad money drives out good.†The average profit margin is below 5%, and production capacity far exceeds demand, creating a cycle of overcapacity and financial strain.
Amid this chaos, aluminum alloy cables offer a new opportunity. Unlike traditional copper cables, they provide better mechanical properties and cost efficiency, making them an attractive alternative. While China still relies heavily on copper, the rising cost of copper and increasing demand for more sustainable solutions have sparked interest in aluminum alloys.
General Cable, with its advanced technology and early market presence, is positioning itself to lead this transition. Its factory in Tianjin, along with its brand recognition and influence on the new industry standard, puts it in a strong position to shape the future of the Chinese market.
As the industry moves toward greater regulation and higher standards, the question remains: Will this shift empower local companies or further consolidate power in the hands of foreign players? For now, the answer is still uncertain—but one thing is clear: the Chinese cable market is on the brink of a major transformation.