There is a question that seems to come up repeatedly when visiting China: how do they do it? How can two companies have access to broadly similar machinery, similar raw materials and similar technology, yet one can produce at enormous scale, continually develop its products and export around the world, while another struggles to compete? And perhaps more importantly, why does the same phenomenon appear across so many industries?
From electric vehicles and batteries to electronics, machinery, renewable energy and increasingly sophisticated wire and cable products, China has demonstrated an extraordinary ability not only to manufacture at scale, but to build the industrial ecosystems that allow that manufacturing to become increasingly competitive.
For the wire and cable industry, the numbers are difficult to ignore. In 2024, China exported approximately $31.4 billion of products classified under HS 8544, covering insulated wire, cable, other electric conductors and optical-fibre cables. That made it the world’s largest exporter in the category, ahead of Mexico at approximately $18.0 billion, the European Union at $15.4 billion and the United States at $12.6 billion. China’s exports under this classification amounted to approximately 3.28 million tonnes.
But perhaps the more interesting question isn’t how much China produces. It is why it is able to produce so much, so competitively, and increasingly at such a high level of technical sophistication. The easy answer is cheap labour. The more we look at China’s manufacturing development, however, the less convincing that explanation becomes.
China has spent decades building manufacturing capability, engineering expertise, infrastructure and supply chains. Its advantage increasingly comes from the interaction between all of these things. A manufacturer isn’t simply operating alongside its competitors. It may be surrounded by machinery suppliers, raw material producers, component manufacturers, specialist engineering companies, logistics providers and customers. The machine itself may not be the competitive advantage. Everything around it might be.
Imagine a manufacturer developing a new product. It needs a new component, and its supplier is nearby. The supplier needs a particular tool, and there is a company nearby that can manufacture it. The production line needs modifying, and engineers with experience of similar processes are readily available. A customer wants the product at a higher volume, and there is already a domestic market large enough to support the investment required to scale. The distance between an idea and a finished product becomes shorter, and when that happens repeatedly across thousands of companies and millions of products, an ecosystem begins to develop its own momentum.
It isn’t just about making things cheaply
A visit to Chinese carbon wire producers in 2008 offers an interesting perspective on just how far the country’s manufacturing industry has come. At the time, the factories were basic, working conditions were poor and the products were competing heavily on price. Yet the Chinese industry did not remain there. Over time, manufacturers moved into increasingly sophisticated applications, including specialist alloys, medical wire, stainless steel and aerospace-related materials.
The important point isn’t whether every company followed precisely the same trajectory. It is what the trajectory demonstrates. Manufacturing capability can develop remarkably quickly when investment, competition and technical knowledge reinforce one another. The question changes from “How cheaply can we make this?” to “How quickly can we make this, at what quality, at what scale and for which new market?”
The domestic market is an important part of this story. A manufacturer with a large home market has somewhere to develop a product, test it, learn from customers, refine the manufacturing process and increase production before taking that experience overseas. Demand creates production, production creates experience, experience creates efficiency and efficiency creates scale. Then the cycle starts again.
The electric vehicle industry illustrates this particularly well. The International Energy Agency estimates that almost 22 million electric cars were produced globally in 2025, with China accounting for around 16 million, or nearly three-quarters of global production. China’s electric-car production exceeded domestic demand by around 20%, while Chinese electric-car exports more than doubled to a record 2.5 million vehicles.
The same concentration is even more striking further up the supply chain. China accounted for more than 80% of global battery-cell production in 2025, while its share of cathode active material production was around 85% and anode active material production exceeded 90%. The IEA describes China’s EV and battery supply chain as a tightly clustered ecosystem extending from critical mineral refining and components through to battery and vehicle manufacturing.
It is difficult to look at those numbers and describe what has happened simply as success in car manufacturing. It is success in building an ecosystem, and that ecosystem extends far beyond the vehicle itself.
Government policy is another part of the equation, and it would be impossible to discuss China’s manufacturing success without acknowledging it. China’s industrial model combines market competition with significant government involvement in infrastructure, investment, strategic industries and industrial policy. But it would be misleading to describe Chinese manufacturing simply as state-owned. There is substantial private-sector activity and intense competition between manufacturers. The more interesting point is the environment in which those companies operate.
The battery industry provides a particularly clear example. The IEA reports that China accounted for more than 80% of global battery manufacturing capacity at the end of 2025. It also notes that building a production facility is only the first step in developing a competitive industrial base. New facilities can take more than five years to reach output levels close to their nominal capacity, while established manufacturers benefit from accumulated expertise and supply-chain relationships. That accumulated knowledge is difficult to buy overnight.
The ecosystem is the advantage
This is perhaps where the Chinese model becomes most interesting. A Western company can buy the same machine as a Chinese company. It can employ skilled engineers and source the same raw materials. It can even produce a technically comparable product. But what happens around that factory matters.
If a component needs changing, how quickly can it be sourced? If a production line needs adapting, who can make the modification? If a customer suddenly wants ten times the original volume, how quickly can production scale? If a new material becomes available, how quickly can it be incorporated into the product? The answers depend on the ecosystem.
China’s experience with electric vehicles provides a particularly good illustration. The IEA notes that China’s electric truck market is almost entirely supplied by Chinese manufacturers using Chinese batteries and Chinese chassis, with CATL alone supplying around 80% of the batteries used in Chinese electric trucks in 2025. The organisation describes this as a well-connected domestic network with strong local supplier density.
That kind of integration is difficult to reproduce simply by building a factory, and it also helps explain why protectionism on its own has limitations. The European Union imposed definitive countervailing duties on Chinese battery-electric vehicles in 2024 following its anti-subsidy investigation. The additional duties range from 7.8% to 35.3%, depending on the manufacturer. Those measures can change the economics of importing Chinese vehicles into Europe, but they cannot instantly create Europe’s missing battery supply chains, manufacturing expertise or economies of scale.
This is what makes the Chinese model particularly difficult to compete with. The competition is not simply between two products or two factories. In some cases, it is between two industrial systems.
There is another characteristic of a deep manufacturing ecosystem worth considering: its ability to adapt. The Covid pandemic provided an extraordinary example of how manufacturers around the world had to respond to completely unexpected demand. In China, companies with established engineering capabilities, machinery expertise and production capacity were able to move into products and equipment outside their traditional markets.
For the wire and cable industry, the broader lesson is significant. A company that understands materials, machinery, tooling, automation and production processes has options. When a new market emerges, it may be able to adapt existing knowledge and infrastructure rather than starting from zero. That ability to move quickly is increasingly valuable in a world where technologies and markets can change much faster than the traditional industrial investment cycle.
From commodity to capability
Perhaps this is where the story becomes most relevant to the Western manufacturing sector. There is a temptation to look at China purely as a competitor and ask how Western companies can protect themselves from lower-cost imports. That is an understandable question, but it may not be the most useful one. A better question might be: what does China do particularly well, and which parts of that approach could be applied elsewhere?
The first lesson is to think in ecosystems rather than individual companies. A successful manufacturer needs suppliers, machinery companies, engineers, universities, customers, logistics providers and infrastructure around it. The second is scale. Large markets give manufacturers somewhere to learn, experiment and improve, while also making it easier to justify investment in specialised machinery, skills and product development. The third is speed. Research and innovation are important, but turning an idea into a commercially viable product quickly can be just as important. The ability to move from development to production is a competitive advantage in its own right.
Perhaps most importantly, manufacturing capability is strategic. Once an industrial capability disappears, rebuilding it can be extraordinarily difficult. Skills disappear, suppliers disappear, investment moves elsewhere and knowledge is lost. The result is not simply fewer factories. It is a thinner ecosystem.
That is particularly relevant as governments across Europe consider industrial strategy, energy security, defence and supply-chain resilience. The opportunity for Western manufacturers may therefore not be to reproduce every product China already makes. It may be to identify where the next opportunities are emerging and develop the capabilities required to compete in those markets.
This is where the wire and cable industry has an interesting position. The next major markets for wire and cable are unlikely to be limited to the traditional applications we have known for decades. Electrification is increasing demand for conductors. Data centres require huge amounts of power and connectivity. Renewable energy requires new transmission infrastructure. Electric vehicles require increasingly sophisticated electrical systems. Aerospace and defence demand lightweight and high-performance materials. Nuclear technology requires specialist cabling and instrumentation.
The question for Western manufacturers may therefore not be, “How do we make exactly the same products more cheaply than China?” It may be, “Where are the markets where we can become exceptionally good?”
That is a different strategy. Trying to win every commodity market on price may be an unwinnable battle. Developing specialist capabilities, engineering expertise, intellectual property and trusted supply chains could be a much more sustainable one.
China’s own development provides some evidence that moving up the value chain is possible. The country has not remained confined to the low-cost manufacturing model that shaped its reputation in previous decades. Its position in batteries, electric vehicles, advanced materials and other industries demonstrates how quickly manufacturing capability can evolve when investment, competition and technical knowledge reinforce one another.
What can the West learn?
Perhaps the most important lesson from China isn’t actually about China. It is about industrial ambition.
The UK and Europe do not need to replicate China’s political or economic model, nor would it necessarily be desirable to do so. But there is a strong case for thinking more seriously about the ecosystems that surround manufacturing. Where are the skills? Where are the suppliers? Where is the investment? Where are the customers? Where are the universities and research organisations? Where can a company develop a product, manufacture it, test it, improve it and scale it? And perhaps most importantly, what happens when that company wants to grow?
These are questions that matter to wire and cable manufacturers just as much as they matter to automotive, aerospace, energy or technology companies.
The future demand for wire and cable will not come solely from the markets we know today. It will come from the technologies being developed now. That could mean new materials for aerospace, specialist cable for nuclear applications, increasingly sophisticated electrical systems for data centres, or new requirements created by defence, robotics and autonomous systems.
The opportunity may be to identify those markets early and build the capability to serve them.
That is perhaps the real China question. Not whether China can be stopped, and not whether the West can simply copy it, but whether the UK and Europe are prepared to decide what they want to be exceptionally good at next and then build the ecosystems required to make it happen.
China has demonstrated what is possible when manufacturing is treated as an ecosystem rather than a collection of individual companies.
For the wire and cable industry, there is a valuable lesson here. The objective does not necessarily have to be competing with China on every product it already makes. It could be identifying the products and technologies the world will need next, and making sure that we are among the companies capable of supplying them.
Because the real competitive advantage may not be the factory itself.
It may be everything that surrounds it.
