How was China’s Manufacturing Industry Development in 2023?
For over a decade, China has been the world's manufacturing hub, with output exceeding 30 trillion yuan and accounting for more than 30% of global industrial output. The COVID-19 pandemic and domestic lockdowns over the past two years disrupted cross-border supply of international industrial equipment and automation components, creating opportunities for domestic parts to enter the supply chains of major manufacturers. Companies such as Inovance Technology, Nachen Technology, Shenzhen DeepSense Intelligence, and Jiumu Technology rose in tandem (many of which have listed and seen their shares surge). In other words, Chinese manufacturing has begun penetrating the import substitution of imported equipment—and is even starting to export—despite the offshoring of international manufacturing. Meanwhile, China is actively reshaping its manufacturing base.
In addition, for domestic component manufacturers, raw material costs typically account for 60%, gross margins are around 40%, and net profit margins often exceed 20%. Although economic headwinds and weak consumer spending have dampened B2C investment, the government is steering capital toward real-economy industries, and returns within the industrial supply chain remain attractive. Forward-looking investors are quietly building positions in industrial companies.