At the beginning of 2024, a policy "nuclear bomb" has landed.
The state has suspended infrastructure investment in 12 provinces and cities
Cable treasure noted that the latest requirements: Tianjin, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Guangxi, Chongqing, Guizhou, Yunnan, Gansu, Qinghai, Ningxia, 12 provinces with high debt in addition to water supply, heating, power supply and other basic livelihood projects, provincial or municipal level shall not appear new projects in 2024. At the same time, the first-tier city of Shanghai will also suspend the approval of shopping malls, offices, industries, and R&D projects.
You must know that infrastructure accounts for a larger proportion of China's economy than real estate. In 2023, China's infrastructure investment will reach "23 trillion yuan", which is twice the "11 trillion yuan" of real estate investment and 18% of China's GDP. The impact of such a large-scale industry being halted will be far-reaching.
The hard times of the cable industry have just begun
However, any policy adjustment will bring labor pains. The wire and cable industry, as one of the largest supporting industries in the national economy, cannot escape. Real estate continues to be sluggish, and infrastructure projects have been stopped, which may be a big blow to the wire and cable industry that has serious overcapacity. Superimposed on the "first war" that is burning everywhere, the hard days of the wire and cable industry in 2024 have just begun.
First of all, the demand has declined, and the wires and cables cannot be sold. Infrastructure projects are one of the main consumption areas of the wire and cable industry, and infrastructure investment is restricted, which will lead to a significant decline in demand. This will directly affect the output and sales of the wire and cable industry, and some small cable companies may not be able to withstand such pressure and face closure, especially those that rely on orders for new infrastructure projects.
Second, market competition has intensified, and low-price competition may become the norm. The competition in the market will become more fierce due to the declining demand. In order to compete for limited orders, some cable companies may take measures such as war to reduce products to attract customers. This will make the industry's already low profit margin fall again, and the pressure on enterprises to survive will increase.
Third, the development of enterprises is limited and the scale is adjusted, and some wire and cable companies may be affected by market uncertainty, resulting in limited investment and development plans. In this year, let's make sure that we survive before we talk about follow-up development.
What should cable people do next?
Cable treasure thinksWithin the limited resources, the industry can only survive in the market by deepening the technology of the cable industry and reducing costs and increasing efficiency. In the face of the above-mentioned adverse effects, cable companies should not give up prematurely and take active measures to resolve risks. First of all, cable enterprises should strengthen internal management, improve production efficiency, and reduce production costs to ensure the profitability of enterprises. Secondly, cable enterprises need to increase R&D investment, improve product technology level, and enhance market competitiveness. In addition, cable enterprises can also try to open up the international market and reduce their dependence on the domestic market to reduce market risks.