The development of fasteners is now at a new turning point, signaling a shift in the industry's growth model. From the perspective of China's current economic stage, there is significant potential for expanding domestic demand, while also offering room to reduce reliance on external markets. In the coming period, the strictness of previous policies may ease, and regulatory approaches are expected to become more flexible and adaptive.
China’s economic growth has been closely aligned with its long-term trend line, and the rapid expansion of the fastener sector in recent years has created pressure for adjustment. As a result, the industry is entering a multi-year adjustment phase that began around 2008.
At this new starting point, the focus must shift from sheer volume to quality and sustainability. The country's economic structure suggests that domestic demand can play a more central role, and the need to adjust export strategies becomes even more pressing. While external challenges persist, internal reforms and policy adjustments will be crucial in shaping the future direction of the sector.
Some time ago, many fastener companies pointed to export difficulties as being caused by external factors. However, these challenges were also driven by policy changes and shifting market demands. Beneath the surface, years of rapid export growth have masked deeper issues—problems that became more apparent during times of economic uncertainty.
Low-price competition cannot last forever. Many small and medium-sized fastener companies have been operating on thin margins, with export profits dropping to between 1% and 3%, or even lower. With rising costs and tighter regulations, many firms are struggling to remain viable.
A lack of industrial transfer strategies has further complicated matters. Fastener exports are largely based on low-value, labor-intensive products. Moving production to inland regions could help reduce costs and maintain competitiveness. Companies that fail to adapt risk falling behind in both domestic and international markets.
Traditional marketing methods are no longer sufficient. Most Chinese small and medium fastener companies still rely on outdated self-export models, making it difficult to access foreign markets. As global conditions change and demand weakens, these old practices are proving increasingly ineffective.
Labor costs are also becoming a major concern. Wages for fastener workers have risen significantly, with daily pay increasing by 200–400 yuan compared to last year. This has led to a 10%–15% rise in labor costs for many firms. Additionally, many companies are not fully complying with labor laws, with about 30%–35% failing to meet legal requirements.
Some company owners blame the new Labor Contract Law for rising costs, arguing that low wages have been the foundation of China’s competitive edge in fastener exports. However, they also recognize that past growth was partly fueled by underpayment and non-compliance, which is unsustainable in the long run.
In conclusion, the fastener industry stands at a critical juncture. To survive and thrive, companies must embrace change—whether through policy adaptation, industrial restructuring, improved marketing, or better labor practices. Only by addressing these challenges can the sector continue to grow in a sustainable and responsible manner.
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