GaoGou Town’s 42.6 Billion Cable Business

Wuwei City's Gaogou Town, a small riverside town on the Yangtze without notable natural resources, reached a wire and cable industry output of 42.6 billion yuan in 2025. Among China's four major cable bases, it is the only one to brand itself with "specialty" and has captured nearly 40% of the national specialty cable market.

The industry looks traditional, but copper accounts for most of the cost and margins are razor-thin; low-end capacity is already oversupplied. Gaogou survived and scaled up because it specialized early—skipping ordinary power cables and focusing on niche fields like naval vessels, nuclear power, and deep-sea exploration. These segments have high technical barriers, and major manufacturers are unwilling to handle small orders. During the 2008 financial crisis, local government coordinated banks under a "three noes" policy to stabilize the guarantee chain, allowing Gaogou to weather the industry shakeout.

Today's new story involves smart manufacturing and supply chain consolidation. Leading enterprises like Huaneng Cable have fully digitized their production processes; parameters for every meter of cable are traceable. Meanwhile, through trading platforms, 11 companies consolidated copper procurement to negotiate prices, reaching a scale of 964 million yuan. This cluster strength helps counter copper price volatility.

Looking at the industrial chain position, the Gaogou model essentially represents vertical deep-dive in niche tracks by a county-level industrial cluster. Replicability is difficult for two reasons: first, local firms need strong early-stage differentiation awareness to actively avoid red-ocean competition; second, it relies on local governments providing financial coordination and public services (such as inspection centers and research institutes) at critical moments, like in 2008. For this type of specialized cluster to build a true moat, it must extend from manufacturing into R&D and testing services. Otherwise, it remains vulnerable to disruption by giants with superior R&D budgets.

Original article: From "On the Brink" to 42.6 Billion Yuan: A Small Town on the Yangtze Produces a "Specialized Prodigy"-TMTPost Official Website