China

1. Overview of China's Industry
China’s industrial sector is a cornerstone of the global economy, with its comprehensive industrial system and enormous production capacity positioning it as a central player in the global industrial landscape. According to data from the National Bureau of Statistics, China’s industrial added value reached 39.9 trillion RMB in 2023, accounting for 31.7% of its GDP. Of this, the manufacturing sector contributed 26.2%, making up approximately 30% of global manufacturing output, ranking first in the world. China is the only country in the world with a complete industrial classification system, encompassing all 41 major industrial categories, 207 sub-categories, and 666 smaller categories under the UN industrial classification system. This advantage of having a complete industrial chain provides strong supply security and a diverse range of cooperation opportunities for global businesses.

In key industrial product sectors, China’s production capacity and technological strength are also leading. For instance, in 2022, China’s crude steel production reached 1.018 billion tons, accounting for 52.9% of global output; cement production was 2.11 billion tons, accounting for 55% of the global total; and chemical fiber production accounted for 70% of the global market. Additionally, China’s performance in high-end industries has been increasingly prominent, with the global market share of products like industrial robots, CNC machine tools, and new energy vehicles continuing to rise, injecting innovation into the upgrading of traditional manufacturing.

Industrial exports are a key reflection of China’s global influence. In 2022, China’s industrial exports totaled 16.8 trillion RMB, accounting for 78.1% of the country’s total exports. Among these, exports of electromechanical products exceeded 10 trillion RMB, making up over 60% of industrial exports. This strong export capability ensures China’s critical role in international supply chains.

2. Policy Support and Industry Development Trends
The Chinese government has laid a solid foundation for industrial transformation and high-quality development through systematic policy support. The "Made in China 2025" strategy aims to promote advanced manufacturing, smart manufacturing, and green manufacturing, gradually enhancing China’s position in the global value chain. At the same time, the "14th Five-Year Plan" specifies that by 2025, the core competitiveness of manufacturing should significantly increase, with annual growth in manufacturing value-added to maintain over 5%.

Smart manufacturing has become the core trend of industrial transformation. As of 2023, China had built over 2,500 smart factories and 800 digital workshops. The industrial robot industry, as a key enabler of smart manufacturing, reached a market scale of over 40 billion RMB, with an output of 440,000 units, accounting for 52% of the global total. In the field of green manufacturing, China has set the "dual carbon" goals, aiming to peak carbon emissions by 2030 and achieve carbon neutrality by 2060. As of 2022, over 6,000 green factories had been established nationwide, with significant reductions in energy consumption across key industries.

Regional industrial development in China shows differentiated characteristics. The Yangtze River Delta region’s industrial robot industry value surpassed 200 billion RMB, while advanced manufacturing accounted for 50% of the industrial output in the Pearl River Delta. Central and western regions are leveraging resource advantages to develop clean energy, new materials, and high-end equipment manufacturing, with annual growth in industrial added value reaching over 6%.

3. B2B Market Analysis in Industrial Sectors
The B2B market related to China’s industrial sector offers extensive opportunities for global investors. According to the Ministry of Industry and Information Technology, the industrial equipment market in China exceeded 5 trillion RMB in 2022, with high-end equipment manufacturing accounting for 27%, maintaining an annual compound growth rate of over 8%. Core component markets, such as high-precision bearings, CNC systems, and industrial sensors, are the focal points of competition for domestic and international enterprises.

The digital transformation of industrial services has accelerated. According to the China Industrial Internet Research Institute, by 2023, there were over 2,400 industrial internet platforms in China, serving over 500,000 industrial companies. The demand for intelligent services has significantly increased, including predictive maintenance, industrial data analysis, and smart scheduling. The market for emerging services reached 270 billion RMB in 2022 and is expected to exceed 500 billion RMB by 2025.

The demand for consumables is also on the rise. In 2023, the industrial lubricant market in China reached 96 billion RMB, while the metalworking fluid market is projected to exceed 35 billion RMB by 2025. Foreign companies such as Siemens, Air Liquide, and Linde Group have a significant presence in the industrial equipment, services, and consumables sectors, while domestic companies like Sany Heavy Industry and Huawei are enhancing their competitiveness through technological innovation.

4. Market Opportunities and Challenges
The industrial market in China presents vast opportunities for international businesses, from high-end equipment manufacturing to new energy technologies. For instance, in 2022, China’s photovoltaic equipment manufacturing sector exported 50.9 billion USD, representing a 67% year-on-year growth. In the field of industrial internet, by 2023, China’s application scenarios had expanded to include manufacturing, testing, and maintenance, forming a broad network of smart solutions.

However, the rapidly growing market also presents challenges. With the implementation of the "dual carbon" goals, environmental protection and energy efficiency requirements have become increasingly stringent. For example, in 2023, energy consumption per unit of industrial added value for large-scale industrial enterprises dropped by 4.5% year-on-year. Traditional, high-energy-consuming industries face higher costs and technological upgrades in their transition to green production. Additionally, the high reliance on international supply chains for core components like advanced chips, industrial software, and critical parts means that foreign companies need to address both compliance and localization strategies when entering the market.

International businesses that engage in thorough market research, optimize their technological deployment, and actively integrate into local industry ecosystems will be better positioned to seize the unique opportunities presented by China’s industrial market.

5. Regional Characteristics and Cluster Effects of Chinese Industry
China’s industrial development shows a high degree of clustering. The manufacturing clusters in the eastern coastal regions are globally competitive. For instance, the Yangtze River Delta region (including Jiangsu, Zhejiang, and Shanghai) accounts for 30% of national industrial output, covering smart equipment, automotive manufacturing, and chemical sectors. The Pearl River Delta region (centered around Guangdong and Shenzhen) stands out in electronics, information technology, and new energy equipment manufacturing, with industrial robot production in 2023 exceeding 180 billion RMB, growing by 15% year-on-year.

The central and western regions are leveraging resource advantages and policy support to develop clean energy and high-end equipment manufacturing. Sichuan and Chongqing’s aerospace and equipment manufacturing sectors saw notable growth, with the aerospace manufacturing industry increasing by 12% in 2023. Xinjiang and Inner Mongolia are focusing on photovoltaic and new materials industries, with photovoltaic module production accounting for 30% of China’s total.

Local governments further support regional industrial clusters with favorable policies. For instance, the integrated development policy of the Yangtze River Delta provides financial support and tax incentives for advanced manufacturing, while the free trade zone in the Pearl River Delta attracts many international companies for technological cooperation and product exports.

The unique advantages of regional industrial clusters offer precise landing points and cooperation opportunities for international companies operating in China. By deeply integrating into regional industrial ecosystems, companies can more effectively tap into the potential of China’s industrial market.