Commentary: The Impact of Property "Purchase Restriction Orders" on the Wire and Cable Industry

11/03

2021

Wires and cables are indispensable building materials in the real estate industry. With the implementation of the property "purchase restriction order," they have also been somewhat affected. However, with China's investment in the power grid and the construction of light rail, greater opportunities will arise for the development of wires and cables, especially with the annual growth rate of power conductors and cables reaching up to 15%.

　　The "purchase restriction order" is regarded as a "heavy weapon" for real estate market regulation in the near future. This year, the number of cities implementing the "purchase restriction order" will increase to 72. Undoubtedly, the "purchase restriction order" will be strengthened: on one hand, more cities will introduce the order to expand its implementation scope; on the other hand, cities that have already introduced the order may update or upgrade their restriction policies.

　　Wires and cables are indispensable building materials in the real estate industry. With the implementation of the property "purchase restriction order," they have also been somewhat affected. However, with China's investment in the power grid and the construction of light rail, greater opportunities will arise for the development of wires and cables, especially with the annual growth rate of power conductors and cables reaching up to 15%.

　　In recent years, due to the accelerated construction of China's power grid and the successive investment in ultra-high voltage projects, a huge market has been created for the wire and cable industry. Over the past 15 years, the wire and cable industry has maintained an average annual growth rate of over 15%. Currently, the industry's total industrial output value exceeds 400 billion yuan, surpassing the United States to become the world's largest wire and cable producer.

　　At present, based on extensive technology introduction, digestion and absorption, as well as independent research and development, China's wire and cable industry has formed a huge production capacity. The supporting cable materials and cable equipment manufacturing industries have also initially formed a relatively complete supporting system. The main characteristics are: large enterprises have obvious advantages in market competitiveness and strong profitability; small and medium-sized enterprises have better asset operation capabilities; private enterprises have flexible market-oriented operation mechanisms and develop rapidly, especially the wire and cable manufacturing enterprises in economically developed coastal areas, which show prominent advantages. In terms of assets, the state-owned economy accounts for only 15%, foreign-invested enterprises nearly 25%, and the private economy accounts for more than 60%. Among the top ten enterprises in sales revenue in the wire and cable industry, the vast majority are private enterprises. The East China region is the most important manufacturing area for the wire and cable industry, accounting for 50% of the country's assets and output value, generating 60% of sales revenue, and earning 70% of the industry's profits.

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