Yangjiang
One knife company per 650 residents: Yangjiang produces 70% of China's cutlery and 85% of its knife exports through a 1,400-year vertical supply chain monopoly.
Yangjiang has one knife company for every 650 residents. Over 1,500 enterprises across a metro area of one million people produce 70% of China's total knife and scissors output and handle 80-85% of the country's cutlery exports. Products ship to over 130 countries. The export value for the first four months of 2025 alone reached ¥1.33 billion. The city has held the title Capital of Knives and Scissors for fourteen centuries and shows no sign of relinquishing it.
The concentration is more extreme than almost any industrial cluster documented in economics. Detroit at its peak had one auto company per several thousand residents. Xuchang, China's wig capital, has one hair company per roughly 1,200 people. Yangjiang's one-per-650 ratio means that the city does not merely specialise in cutlery — it is structurally organised around the production of bladed instruments the way an ant colony is organised around foraging.
The supply chain explains how this density sustains itself. Yangjiang's cluster is vertically integrated from raw material to retail: stainless steel strip smelting, CNC machining, mould manufacturing, heat treatment, electroplating, polishing, sharpening, packaging, branding, and e-commerce distribution all happen within the same metropolitan area. A knife that begins as a steel billet in the morning can ship as a finished product by afternoon without leaving the city. No input requires an external supplier. No process step requires an external service provider.
About 70% of Yangjiang's knife companies operate as OEM manufacturers for international brands. The premium kitchen knife in a European department store was likely forged, ground, and polished in a Yangjiang factory, then branded and boxed for export. The city's manufacturers have begun transitioning from OEM production to independent brand building — a shift from anonymous production to costly signaling, where the Yangjiang origin itself becomes a mark of quality rather than a secret to be concealed behind a German or Japanese brand name.
The competitive exclusion is nearly complete. Once Yangjiang's cluster reached critical mass — combining 1,400 years of metallurgical tradition with modern robotic arms, laser cutting machines, and automated grinding systems — no other Chinese city could justify the investment to compete. The supplier density means that any new knife factory benefits from cheaper inputs in Yangjiang than anywhere else, reinforcing the cluster's gravity. The result is a natural monopoly built not on patents or regulation but on the accumulated infrastructure of a millennium of specialisation.
Yangjiang manufactures over 5,000 types of hardware knife and scissors products. The annual output exceeds ¥52 billion. The city has achieved what OPEC attempted and failed — a single-geography production monopoly in a commodity category — except that Yangjiang did it with craft tradition and cluster economics rather than cartel agreements.