Jiaxing Fastener Industry Transformation Promotes "Growing Up"

China Standards Reports "Because of the continuous recovery of the world economy and the steady development of the domestic economy, the export of fastener products in our city has achieved rapid growth in 2010." Deputy Secretary-General of Jiaxing Fasteners Import & Export Enterprises Association Feng told reporters yesterday that last year the city’s fastener industry not only won international lawsuits, but also expanded emerging markets such as “brick” countries, making the fastener exports of the city continue to grow rapidly over the past year since the beginning of this year.1 The monthly export value was 84.36 million US dollars, an increase of 55.79% year-on-year.

Last year, the total import and export of fastener products reached 80,152 million US dollars, an increase of 51.44% year-on-year, including exports of 7,799,500 US dollars, an increase of 51.80%. “Accelerating the recovery of export recovery, further increasing market diversification, and increasing export unit prices are the main characteristics of fastener exports in the city last year,” said Zhang Feng. According to statistics, the export value of fastener products in our city last year accounted for 48.67% of the province.

In the eyes of people in the industry, the global economic recovery is the main driving force for the rapid growth of fastener products exports in our city. Since 2010, consumption and investment in major developed countries have gradually recovered. The EU debt problem and the huge fiscal deficits of some countries are generally within a controllable range. According to statistics, the export of fasteners to the EU increased by 72.33% year-on-year in 2010. In addition, the rapid growth of exports also benefits from emerging markets such as the BRICS. At the same time, in response to the financial crisis, the Chinese government introduced a series of policy measures to support the development of foreign trade, and it also drove the rapid growth of the export of fastener products in our city.

In response to international trade relief surveys, the success of the news has also provided confidence for the fastener companies to resume production. Following the success of China's fastener industry in responding to the United States' "double reverse" investigation on fasteners in China in 2009, the fastener industry responded to international trade frictions in 2010 again: June 28, 2010, the Ministry of Commerce announced to the European Union. Imported fastener products are taxed; on August 10th, the WTO preliminary ruling that the EU levied high anti-dumping duties on fastener products in China was illegal; on December 3, the WTO once again ruled that the EU imposed anti-dumping duties on China's fasteners. Practices violate WTO regulations.

The company's active transformation and upgrading also increased the added value of fastener products and increased its competitiveness. Such as Jinyi Industrial Co., Ltd. relying on high-speed railway construction, invested heavily in research and development of high-speed rail fastener technology, and developed new fasteners for high-speed rail. Both Zhejiang Qifeng Hardware Co., Ltd. and Zhejiang New Oriental Fasteners Co., Ltd. have established railway product R&D centers and obtained railway product procurement access certificates issued by the Shanghai Railway Bureau.

The transformation and upgrading are effective. According to Zhang Feng, the global economic recovery is the main driving force for the rapid growth of Jiaxing fasteners exports. Since 2010, consumption and investment in major developed countries have gradually recovered. The EU debt problem and the huge fiscal deficits of some countries are generally within a controllable range. “Although the fastener industry is faced with trade remedy measures adopted by many countries, especially the high anti-dumping duties levied by the European Union on China, the export of fasteners to the EU grew by 72.33% year-on-year in 2010, and the EU once again surpassed the United States as Jiaxing. The city's largest export market for fasteners.” In addition, rapid export growth also benefits from emerging markets such as the BRIC countries, which have strong growth in demand. Widely used in a variety of machinery, equipment, vehicles, ships, railways, bridges, construction and other fastener products, is catering to its exuberant demand. At the same time, in response to the financial crisis, the Chinese government has introduced a series of policy measures to support the development of foreign trade, including improving the corporate financing environment, improving export credit insurance, improving the level of trade facilitation, and expanding the pilot of RMB settlement for cross-border trade. This has provided support for improving the business environment of the company and maintaining its international competitiveness, which has greatly stimulated the rapid growth of the export of fastener products in Jiaxing.

Responding to frequent reports of international trade relief surveys has also provided confidence for the fastener companies to resume production. Following the success of China's fastener industry in responding to the United States' "double reverse" investigation on fasteners in China in 2009, the fastener industry responded to international trade frictions in 2010 again: June 28, 2010, the Ministry of Commerce announced to the European Union. Imported fastener products are taxed; on August 10th, the WTO preliminary ruling that the EU levied high anti-dumping duties on fastener products in China was illegal; on December 3, the WTO once again ruled that the EU imposed anti-dumping duties on China's fasteners. Practices violate WTO regulations.

In addition, the company has actively transformed and upgraded and added value to its fastener products. “In 2010, transformation and upgrading became the mainstream of the development of the industry. Fastener companies in Jiaxing kept pace with the times and carried out industrial integration according to their respective characteristics.” Zhang Feng said that if Jinyi Industrial Co., Ltd. relied on the construction of high-speed railways, the investment Huge investment in the development of high-speed rail fastener technology and the development of new fasteners for high-speed rail. At present, the company has become a high-speed fastener production base. Another example is that Zhejiang Qifeng Hardware Co., Ltd. and Zhejiang New Oriental Fasteners Co., Ltd. have all set up railway product R&D centers and obtained the railway product procurement access certificate issued by the Shanghai Railway Bureau.

Looking forward to many challenges in 2011 Looking forward to 2011, Zhang Feng believes that overall fastener exports in Jiaxing will continue to improve, but it also faces many challenges. First, the foundation for the recovery of the world economy is still not stable, and the prices of major raw materials have been rising all the way. It is understood that in 2010, the domestic iron ore market was changed from a long one-year price to a quarterly price, and a more flexible pricing mechanism made domestic iron ore spot prices increasingly elusive. Domestic iron ore prices have been advancing rapidly, with an increase of more than 50%. According to the prediction of China Steel Net, in 2011, the tight supply of domestic iron ore will gradually ease, and the price will show a trend of falling after a sharp increase, but the price will continue to surge at the beginning of the year.

Second, labor costs continue to increase. “The large labor shortage, especially the shortage of skilled workers, is a major problem faced by the fastener companies in the city.” Zhang Feng said that because the fastener industry is a labor-intensive industry, the local workforce can’t fully meet the needs of the factory's start-up work. The mobility of people is strong. In order to retain the employees, the company has to increase the staff's welfare while also increasing the training costs for the employees.

Second, trade protectionism has intensified. On the one hand, due to the lack of global economic recovery, it is difficult to effectively recover international market demand in the short term. On the other hand, Europe and the United States and other countries have put forward strategies such as “reinvigorate the real economy” and “industry return”, which have made the market competition more fierce. “As far as the fastener industry is concerned, since 2004, the fastener industry has encountered 14 trade remedy investigations initiated by seven countries and regions including the European Union, the United States, Canada, Mexico, Russia, South Africa and Turkey. Exports of fastener products are hampered.” said Zhang Feng.