Page 27 - Analysis Report of Global Market in the Submarine Cable Field (2017)

6. Industrial features Figure 8 2015 China wire and cable manufacturing industrial sales
Although China’s wire and cable industry has history of more than 20 revenue ratio according to property of enterprise (unit:%)
years, and has made considerable progress, but has still not get rid of
the vicious circle of big and not strong, which is largely left behind
of world-class enterprises. There are still many problems such as low
industrial concentration, large number of enterprises of small scale,
insufficient scale economies, lack of independent innovation ability and
prominent contradictions of product structure.

Industrial concentration has improved, but still low on the whole
Generally speaking, China's wire and cable industry has characteristics
of multiple and small-scaled. According to statistics, until of the end
of 2015, there are more than 10 thousand of medium and small sized
enterprise within China’s wire & cable industry. There are medium-sized
enterprises of 3794, and countless smaller scale enterprises. In 2011-
2015, wire and cable industrial large enterprises’ accounting proportion
of sales revenue has gradually increased, which in 2015 reached 19.78% The product structure is undergoing significant changes
and still maintained within 20%. The industrial concentration is still The proportion of enameled wire and electrical equipment wire has
low, which has sharp contrast to the high concentration of industry in declined. Power cable, communication cable’s ratio has increased. This
developed countries. Wire and cable industry in Europe, United States, variation is related to the huge needs of power cable, overhead line cable
Japan as well as other developed countries have been experienced and communication cable resulted by the rapid development of China
hundreds years of historical development, whose market concentration power and communication industry. It is expected that this tendency
is relatively high. Among them, the top ten in the United States have a will continue in future. At the same time, the proportion of special cable
market share of 67%, Japanese top six market share is 65%, and French products of high value-added will also increase continuously.
top five market share of is 90%.
In future, with the constant change of the world economy structure,
In 2016, the private enterprises’ sales revenue accounted for nearly China’s cable industry will certainly face up with the reorganization
half of total industrial sales revenue, reaching 48.89%, followed by and shuffle. Especially in recent years, China’s economic development
enterprises of other property, of witch the sales revenue accounted was facing up with the bottleneck of energy and power shortage, but the
for 22.17%; sales revenue of foreign enterprises, Hong Kong Macao country has increased the investment in electricity, making the industry
and Taiwan investment enterprise accounted for 18.57%, and that of step into a leap forward period of development.
joint-stock enterprises accounted for 5.95%, while the state-owned
enterprises’ sales income only accounted for 1.72% of the total revenues Ⅱ Analysis of Global Submarine Cable Market
in whole industry.
The life of submarine optical cables is generally around 25 years, of
Figure 7 Sales value share distribution of enterprises of various which 20 years is one use cycle.At the same time, with the currently
scales in 2016 (unit:%) growing of global communication demand by double, submarinecable’s
using is saturated in some areas. Currently the transoceanic submarine
cable shows the tendency of replacement acceleration.
Table 1 Statistics of retired submarine cables in the Asia Pacific
Region

Insufficient sustainable power for development
More than 90% of the cable industry's production capacity is on low-
end products, with the average investment amount in R & D less than
1% of sales value. Domestic industry has difficulty in meeting demands
or support of high end products like aviation, aerospace etc. This part is In 2016, the Asia Pacific direct submarine cable transmission
mainly dependent on imports. Wire and cable industry lacks scientific system with capacity of up to 54T (APG) officially announced
research investment and high-quality talents, having relative weak connected in Shanghai, replacing the Sino-US submarine cable
innovative capability. system(CUCN)serving for 16 years, which officially declared
retirement, signifying that the communication capacity and
Private enterprises dominate, foreign investment and other communication speed between China and USA as well as among the East
enterprises occupy important places Asia each country will enter into a new era. This cable design’s service
According to 2013’s statistics, private and foreign-funded enterprises of life is 25 years. One of the reasons why it has retired 8 years ahead
China’s wire and cable industry accounted for a market share of 48.56% is that the system is no longer suitable for undertaking the important role
and 18.42% respectively, while other enterprises accounted for 22.51%, of main road communication between China and USA with the communi
and the three together accounted for 89.49%. It can be seen that private cation technology’s update and Internet transmission demand’s increase;
enterprises, enterprises of other property and foreign-funded enterprises another reason is that as the submarine cable line’s operating time is too
have taken the leading place in the industry. long, the maintenance cost of unit capacity of the submarine cable
system is higher than that of new submarine cable system.
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