Relationship between Growth and Stable Development in China Fastener Industry

 

The boom in previous years of China fastener market created miracles one after another. However, the overspeed development can but appear for a short period. It could be even described as the elevated development compared with the past few years. The sustainable development of an industry does not depend on our zeal and hope, as we still face lots of difficulties; we even come across crisis. As the experts said, the explosive growth of China fastener industry happened under a specific period and conditions. When the market turns to be rational, China fastener industry will keep stable development for a longer period.

It is estimated that the macro economy of China will be on fast track in the coming 3 to 5 years. During that course, the pace of growth will keep going. Experience teaches us that when evaluating the health conditions of fastener industry, we should not only focus on output, speed or profits, but also judge whether it follows the market law as well.

China fastener industry has taken up more and more percentage in the international market share. It is anticipated that the world produces as many as 14 million tons of fasteners, 30% of which are from China mainland. Along with the trends of worldwide industrial division and manufacturing transition, the output of China fasteners will keep growing. However, great risks are always hidden behind the high-speed growth. Therefore, when realizing the market rules, we should be in a peaceful mind.

Since 2006, multinational fastener enterprises have entered Chinese market one after another. On the one hand, statistics show that the number of such companies reaches 250, which brings in opportunities and challenges to China fastener industry. On the other hand, foreign companies only have eyes on the low cost of China manufacturing, but the price advantage of enterprises seems to be weaker and weaker. In the past few years, many fastener enterprises regarded bargain as the tool to expand fastener market. Unfortunately, price reduction had lost its former power. The increase in price of raw materials such as steel, fuel, etc causes the sharp growth of fastener production cost. Fastener manufacturers are up against the cost pressure. China fastener industry is stepping into the complete shuffle period.

Though good as the opportunities are, the obstacles in system of China fastener industry seem to be incompatible with them. Although we have four production bases—Wenzhou, Ningbo, Haiyan and Yongnian, they are scattered and have few large-scale enterprises or influential groups. Moreover, there is seldom cooperation among enterprises. All of these are caused by management system, finance system, examination and approval system, etc. Fundamentally speaking, the production mode is the result of the transition from planned economy to social market economy. Fastener enterprises should notice these conditions in the fierce competition—high quality, low cost, short validity, variety and differentiation.

At present, we have no fastener industrial groups in strict sense. Although we have four production bases, it takes time to reach the scale in real sense. Industrial group is the outcome of being strong and big that covers the achievement of scale benefit, lean production, module technology. It is an inevitable trend for our fastener industry.