Cabinet industry development needs transformation and upgrading

The cabinet industry is currently undergoing a crucial phase of transformation and upgrading, moving toward higher quality and more advanced development. This stage has revealed several challenges, including overcapacity in production, limited space for scale expansion, and the difficulty of sustaining growth through traditional methods such as investment-driven expansion. These conventional approaches are no longer aligned with the demands of this new era. Since the end of the reform and opening-up period, the Chinese cabinet manufacturing industry experienced rapid growth by adopting foreign technologies and equipment. This allowed it to catch up with advanced countries in a relatively short time. A key factor was the ability to leverage existing technologies and management practices, which helped boost productivity and efficiency. However, as the catch-up phase comes to an end, access to ready-made foreign technology is becoming more limited. The general level of technology can no longer meet the needs of this new stage, and the industry now requires advanced, competitive technologies that are often difficult to acquire. The slowdown in growth is an inevitable part of this transition. With China’s per capita GDP now exceeding $6,000 and the country moving into the middle-income bracket, it is facing the so-called “middle-income trap.” This is also the peak period for industrial product growth, and a decline in growth rates is natural. The cabinet industry must prepare itself mentally and understand this shift. It should not expect a return to ultra-fast growth but instead focus on structural adjustments and industrial upgrades. The emphasis should be on improving quality and efficiency rather than just increasing output. A major cause of overcapacity lies in the lack of innovation, blind following of trends, and low-level replication. Many companies engage in redundant construction and produce similar products, leading to market saturation. At the same time, overcapacity is also a result of market competition and a natural outcome as industries mature. The core issue is that current supply levels do not match market demand, and there is an urgent need to upgrade the quality and capabilities of production. Historical economic data shows that domestic demand for industrial products tends to decrease after the catch-up phase. The peak of industrial growth is closely tied to the stage of economic development, particularly per capita GDP. As China approaches the peak point of industrial growth, similar patterns are expected in the cabinet industry. This is a regular trend, and the industry must take it seriously. To address overcapacity, the cabinet sector should conduct a thorough analysis of its root causes, make informed and rational investments, avoid blind expansion, raise entry barriers, and prevent the creation of new excess capacity from the outset. This proactive approach will help ensure sustainable and high-quality development in the future.

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