Page 11 - 2016年线缆竞争力报告(摘要版)

8 The competitiveness report on "the Top 10 competitiveness enterprises in the wire and cable industry of China in 2016" (Abstract Edition)

revenues per employee and the ratio of export revenues to total revenues.
Scale sub-sectors, growth sub-sectors, and efficiency sub-sectors measure the competitiveness of enterprises from
different aspects. We hope that for all the samples, the three sub-factors are not relevant, at least less relevant, so
that it can reflect the whole competitiveness of China’s wire and cable enterprise more fully. However, we can also
predict that in the maturing of China’s wire and cable market, due to the regulating role of market mechanism, the
3 aspects is bound to have some relevance, especially between the efficiency sub-sectors and growth sub-sectors,
demonstrating the resource configuration to the most efficient enterprises.
The Chart below indicates that on the whole, the correlation of the 3 sub-sectors is increasing. This shows that
China’s wire and cable market becomes more and more market-oriented, efficiency-based, and allocating production
elements on the power of market. Through the data above, we can conclude that the competition has become
increasingly heated and polarized in China’s wire and cable market. The stronger stronger, and the weaker weaker.
The dominant position of competitive advantage of the scale is increasingly obvious in China’s wire and cable
market.

The correlation coefficient changes of the 3 sub-sectors in the last 3 years

correlation coefficient between
scale and growth sub-sectors
correlation coefficient between
scale and efficiency sub-sectors
correlation coefficient between
growth and efficiency sub-sectors

The topic our competitiveness report study in 2016 is the impact of the cost of China’s wire and cable on the
competitiveness of the enterprises. The results show that at present, wages, energy price that people concerns have quite
large impact on the profitability of the enterprises. Generally speaking, some competitiveness wire and cable enterprises
in China are able to bear the pressure caused by the higher wages and energy prices. The results also show that market-
oriented of interest rate will not over-affect the international competitiveness of China’s wire and cable enterprises, on
the contrary, in response to the “capital substituting labor ” caused by rising wages, those competitiveness wire and
cable enterprises should accelerate their pace of capital market as well as internationalization.
When accepting the conclusions above, it should be pointed out specially that: although the impact of the factors
above respectively on the enterprises cost can be endured by the wire and cable enterprises, but if the factors
occur at the same time, it may be difficult to handle in a short period. Faced with large changes in cost structure,
enterprises need a period of adaptation and adjustment to accept the increased pressure resulting from the integrated
costs. So we believe that although the competitiveness wire and cable enterprises in China have the ability to accept
the change of cost structure in long term, at present, when a variety of economic uncertainties occur in China and the
global economy may step into a period of serious decline due to Brexit (Britain + Exit), if the factors driving cost
rising come out in a short term, many China’s wire and cable enterprises might be caught into financial difficulties.
In the end, on behalf of all stuff of Accreditation Committee and Organizing Committee of “the top 10
competitiveness enterprises in China’s wire and cable industry”, I extend my greetings to all the colleagues in this
industry for your support and concern on the selection in the last 3 years. In the coming year, we will transmit the
forefront and precious information to industry as always, and contribute to improving the competitiveness China’s
wire and cable enterprises.

Accreditation Committee of "the top 10 competitiveness enterprises in China’s wire and cable industry"
Sep. 2016