Cables and cables: special national conditions create special cable industry

In China's wire and cable industry, the commentary on the “industry concentration is not high” for the vicious expansion of the industry scale is eloquent. It is believed that only by strengthening the “concentration” of the cable industry, can it produce the “worldly brands and multinational corporations that clamor loudly”. 'Full participation in global competition'. How to evaluate the concentration of the cable industry can not be separated from China's specific national conditions and focus on concentration. It should be understood that it is the special national conditions that have created China's special cable industry.

According to statistics, according to statistics from the National Bureau of Statistics in 2009, a total of 4,653 state-owned and above-scale enterprises in the national cable industry (actually a total of nearly 10,000 enterprises), 98.8% of them are small and medium-sized enterprises, and only 19 large-scale enterprises are 19 large-scale enterprises. Enterprises only account for 11.7% of the market. The three largest U.S. producers accounted for 54%, Japan 7 accounted for 86%, and the United Kingdom accounted for 95%. Therefore, based on these data, it is concluded that although China is a major cable manufacturing country, no one company can truly be regarded as the industry leader, and there is no scale in the industry chain, and there are no world brands and multinational corporations that clamor loudly. It is difficult to fully participate in global competition.

Not to mention whether these data are accurate, but according to the proportions of large, medium, and small enterprises in the world, China's wire and cable industry accounts for 98.8% of small and medium-sized enterprises, which is in line with the scale of industrial enterprises in the world today. SMEs around the world have made important contributions to global economic development, not just large enterprises. China's wire and cable industry is known as the country's second largest industry in addition to the automotive industry. This second-largest industry contributes to the country’s construction, not only for large-scale enterprises, but also for small and medium wire and cable companies.

Industrial enterprises above designated size refer to all state-owned enterprises (enterprises with a registration type of '110' in the Trade and Industry Bureau) and non-state-owned industrial enterprises with a product sales income of more than 5 million yuan (inclusive). According to the criteria for the classification of enterprises according to the regulations of the government’s statistics department, the number of companies, sales, and total assets are taken as the basis. Among them, large-scale enterprises: number of 2000 or above, annual sales of 300 million and above, total assets of 400 million and above; medium-sized enterprises: number of people below 200-2000, annual sales of 3,000 to 300 million yuan, total assets of 4,000 to 40 million Less than RMB; Small-scale enterprises: The number of people is less than 300, annual sales are less than 30 million yuan, and total assets are less than 40 million yuan. It is said that the threshold was later raised, and annual sales are calculated: Larger companies that are larger than 500 million yuan, 50-50 million yuan are medium-sized enterprises, and those that are lower than 50 million yuan are small-scale enterprises.

In accordance with the above criteria for the scale of enterprises, cable companies with annual sales of more than 500 million yuan are classified as large-scale enterprises, and there are not only 19 companies in the country. It is estimated that 95% of the companies are small and medium-sized enterprises with annual sales of 500 million yuan or less. Therefore, it is one-sided to emphasize only the degree of industry concentration rather than the specific national conditions.

First, SMEs can solve employment problems. China is a big country with a large population in the world and a big manufacturing country. In solving the employment problem of residents, SMEs have assumed social responsibilities; SMEs have assumed the burden of industrial economic development in solving the problems of manufacturing industry development. But relying on a large-scale company with a proportion of less than 2%, it is impossible to do so. The same is true for the wire and cable industry. No matter what size companies are, they are proclaiming how many people have solved their employment problems.

Second, the SME team needs to expand. Can not be compared with the industry concentration in industrial countries. Industrial enterprises in those countries have undergone centuries of capitalist development, and corporate trust, or monopolization, is one of the characteristics of capitalist industry. The large cable industry in those countries has grown to the point of monopolization of large enterprises. In China, if such a situation occurs, then how will more than 95% of SMEs survive? As for the current market share of China's 19 large companies, which account for only 11.7%, indicating that these large enterprises are not big enough, their market competitiveness is not strong enough, and they must look for their own reasons. They can't just complain about SMEs' spoils. Relying only on the 19 large-scale cable companies, can the industry become the second largest industry in the country?

Again, SMEs do not receive leading development. The rapid increase in the number of small and medium-sized cable companies in China is not a flood of beasts, but a concrete manifestation of the country’s industrialization.

No matter in the enterprise management experience or product technology, small and medium-sized enterprises urgently need large enterprises to stand out to lead and guide and form a powerful new force in the big companies' large-scale flag. At those industry conferences, people heard almost all the condemnation of SMEs, but did not say how to lead SMEs to advance together. There is almost no organization in the industry that speaks for SMEs. As a result, the emotions of rivalry between companies of different scales have been created, leading to disorder and chaos in market competition.

Finally, the 'concentration' of SMEs is not conducive to self-development. Any enterprise is developed from scratch and from small to large. Any business owner (except state-owned enterprises) is deeply afflicted with the difficulties in creating the family business. In the 1980s, China once had two cable groups in the north and south, and a network of small and medium-sized enterprises came in. The result not only dragged down the development of the main state-owned large enterprises, but also restricted the hands and feet of the joining SMEs, but it was just a glorious banner of the soldiers. In the past ten years, small and medium-sized enterprises in China have surpassed large-scale enterprises in attracting employment, scientific and technological innovation projects, the number of patent applications, and total profits and taxes paid. And if SMEs are 'concentrated' as they were before, can there be such a prosperous situation now?

In short, I believe that it is no longer necessary to stand on a standpoint and strengthen what the industry's 'concentration' means. Every enterprise that is responsible for the healthy development of the whole industry, and every entrepreneur who is interested in making China's wire and cable industry a global brand, should take practical actions to assist and promote the healthy and harmonious development of SMEs.