Indian entrepreneurs visit Chinese factory, stunned by a wall of photos, exclaiming: This is the arena of combat!
In May 2026, Anant Goyal, Chairman of the Confederation of Indian Industry, led a delegation of CEOs on a five-day visit to China. The group toured top-tier Chinese manufacturing enterprises including Midea, BYD, and Geely. After the visit, Goyal expressed deep reflections, stating it exceeded all expectations.
This news originates from India’s financial media outlet NDTV Profit, which published a detailed report on Goyal’s observations during his China trip on June 22, 2026. The article notes that Goyal noticed a striking figure: the profit margins of Chinese companies are only between 2% and 3%. Such a number would never be approved at any board meeting of a global corporation.
As the delegation entered the workshops of Chinese enterprises, they witnessed an entirely different reality.
Goyal observed that these companies invest massively in automation and R&D with long-term planning spanning a decade, rather than focusing solely on quarterly performance. They celebrate innovators—walls lined with photographs of patent certificates. Inside the factories are "invisible plants," commonly known as "dark factories"—fully automated production systems powered by robot clusters, industrial internet, and AI algorithms, operating without human intervention.
The competition here is unparalleled in its intensity—everyone is giving their all.
Initially, Indian CEOs couldn’t understand how Chinese companies could accept such slim profit margins of just 2% to 3%. But they soon realized the reason lay in scale. With a sufficiently large market, high volume and low margins can sustain massive operations. Market share itself becomes a moat. Whoever captures the market will survive the next round of technological evolution.
The reason also lies in cost structure. Land, capital, electricity, and other key inputs are kept at low costs, thereby reducing the break-even point for businesses. A 2% to 3% profit margin that would represent a loss in other countries may be considered a safe threshold in China.
Even more fundamentally, it comes down to time horizon. Western firms focus on quarterly reports; Chinese firms look at ten-year plans. This difference in temporal perspective fundamentally shapes investment decisions. Things that matter ten years from now must already be planned today.
Original source: toutiao.com/article/1868771453682688/
Disclaimer: The views expressed in this article are those of the author alone.