Editorial

社論：新機會與新挑戰NewOpportunities
andChallenges
Great Potential for New Energy Industry in 2023
The past three years of chaos may have disrupted the supply chain but haven’t been all dark days, because China awed
the world with new energy car industry. According to the latest figures by China Association of Automobile Manufacturers,China's production and sales of new energy vehicles (NEVs, including pure electric vehicles, plug-in hybrid electric vehicles
and hydrogen fuel cell vehicles) reached 7.058 million units and 6.887 million units respectively in 2022, up 96.9% and 93.4%
respectively, and have topped the world for eight consecutive years. In 2022, the global NEV sales reached about 10.65 million
units (63.6% year on year), of which China accounted for nearly 65%. By the end of 2023, China's NEV sales could grow 35%,
reaching a market scale of 9 million units. Although this growth rate is only about one-third the rate of 2022, it is impressivethat China has been able to achieve such growth despite the economic and inflationary challenges today.

China Fastener World no.68/2023

Automotive sales have naturally lifts the demand forautomotive fasteners. Several leading companies in China haveinvested in the NEV fastener market. Essence Fastening is oneof the major precision fastener manufacturers entering the newenergy industry.
Additionally, Fengning County in Hebei Province of China
is building a production base of auto parts. Chery Automobile’s
industrial park of automotive parts in Jinpu New Districtof Dalian City launched construction in March. A high-end
automotive industry demonstration area is under construction inAnji District of Hebei Province with the aim to establish a local
auto parts industry. Among them, Anji District made a turnoverof RMB 1.74 billion in 2022, up 46.6%. SAIC Motor is working
with the Guangxi government to build a world-class NEVindustry area. The number of NEV production bases in China
is increasing rapidly with strong development momentum.
It is important to note that NEVs use a large number ofprinted circuit boards which put the manufacturing technology
of ultra-miniature screws to the test. Thinner and stronger
boron steel and recycled plastic materials have found their use030 惠達雜誌

on car bodies, both of which require innovating new fastenerjoining technologies. Obviously, NEV fasteners requires high-end
and customized manufacturing technology. However, There still
are technical bottlenecks for Chinese fastener enterprises and it isnecessary to continue to upgrade and transform to cope with newforms of innovation in fastener manufacturing.
Besides NEVs, another booming new energy industry in
China is solar energy parts. There are many local Chinese
enterprises entering this field. For example, Ningbo Geobo
Hardware quickly entered the photovoltaic parts field, providing
one-stop parts procurement service for overseas fastener
wholesalers and photovoltaic panel mounting companies. (Referto the Ningbo Geobo Hardware report in this magazine.) NEVand solar energy markets will be the two points of focus this year.

CBAM, the Challenge in Focus
China has long been EU's largest trading partner. However, EUwill extend the implementation of the Carbon Border Adjustment

Editorial
Mechanism (CBAM) to the fastener industry on a trial basis starting October 1, 2023, and formally implement it in the end of2026 or the beginning of 2027. This will impose significant carbon taxes on fastener manufacturers who fail to meet EU's carbon
emission standards and who are unable to provide third-party verified carbon emissions data. This mechanism also poses a major
challenge to Chinese manufacturers.
During the transition period (starting from October 2023), EU will require that the amount of imported products, the carbon
content of the products, and proof that the exporter has paid the carbon fee and reported within one month after the end of "eachquarter". During the transitional period, the carbon content of products may not necessarily have to go through verification. Afterformal implementation, the amount of imported products, the carbon content of products, the number of CBAM certificates, andthe verification report shall be reported "annually at the end of May". The documents can be submitted directly to the European
Commission or to the importer.

Table 1. China's Fastener Export Value to the World (in USD)
2019

2020

2021

2022

Partner

ExportPartner

ExportPartner

ExportPartner

ExportWorld

6,419,097,042

World

6,959,807,809

World

9,283,111,503

World

11,178,859,446

U.S.A.

1,004,114,571

U.S.A.

827,330,702

U.S.A.

1,262,828,358

U.S.A.

1,660,619,069

Russia341,469,850

Vietnam

484,775,853

Russia544,069,130

Germany

608,159,340

Japan

310,276,769

Russia404,230,744

Germany

533,199,635

S. Korea

577,152,276

Vietnam279,867,089

Germany309,148,054

Vietnam

455,990,179

Vietnam

481,554,218

Germany

278,955,153

Japan

270,056,188

S. Korea

403,729,049

Russia479,092,270
416,772,285

India

223,169,272

S. Korea

249,571,286

Japan

346,439,775

India

S. Korea

197,021,826

UAE

213,085,446

India

296,460,697

Japan

399,601,381

Australia

189,499,451

India

203,159,577

Italy

277,124,224

Mexico298,089,922

UK

159,449,102

Myanmar199,601,983

Australia

266,443,260

UAE

297,718,909

Italy

153,851,235

Thailand

196,292,352

UK

258,863,173

UK

296,288,973

Table 2. China's Fastener Import from the World (in USD)

China Fastener World no.68/2023

2019
PartnerWorld

Import2,839,393,284

2020
Partner
World

2021

Import2,786,542,569

Partner
World

2022

Import3,280,746,110

PartnerWorld

Import
2,857,704,941

Japan

839,746,319

Japan

852,790,240

Japan

983,969,032

Japan

806,726,292

Germany556,294,921

Germany

561,700,799

Germany

630,243,449

Germany

556,832,553

U.S.A.

369,091,167

U.S.A.

315,945,338

U.S.A.

398,160,844

U.S.A.

392,529,165

Taiwan218,244,164

Taiwan234,702,416

Taiwan324,224,022

Taiwan284,625,712

S. Korea

160,280,472

Italy

141,111,449

Italy

172,577,180

Italy

140,189,255

Italy

124,061,441

S. Korea

130,805,250

S. Korea

132,572,356

S. Korea

118,696,684

France73,735,995

France62,370,515

France73,700,211

France67,104,206
47,406,276

U.K.

49,902,373

U.K.

46,517,579

U.K.

53,832,105

U.K.

Malaysia

26,830,637

Malaysia

28,608,755

Turkey40,893,282

Turkey39,145,466

Switzerland

24,756,491

Switzerland

28,247,190

Switzerland

33,779,764

Switzerland

32,677,036

China's carbon reduction accompanied by the aforementioned new energy industry (electric vehicles and solar energy)
boom is becoming a trend, but EU's carbon tax came fast and abruptly. Could Chinese fastener enterprises in this waveof new energy trend upgrade in time and develop fastener products and production line technology that can meet EU's carbon
reduction regulations. These questions test fastener leaders’ technological innovation and integration capabilities. Perhaps they
could succeed through collaboration with overseas enterprises and different industries.

China's Fastener Export Surpasses USD10 Billion Mark
From 2019 to 2021, China's fastener export to the world continued growing from USD 6.4 billion and USD 6.9 billion to USD
9.2 billion, and then exceeded the USD 10 billion mark in 2022, landing at USD 11.1 billion (Table 1). The U.S. has been China's
largest fastener export destination for the past four years, and China exports much (at least two times) more fasteners to the U.S.

032 惠達雜誌Editorial

On the import side, China's fastener import from theworld fluctuated, falling from USD 2.8 billion to USD 2.7billion, rebounding to USD 3.2 billion, and then fallingback to the USD 2.8 billion during 2019 and 2021. Japan
has been China’s largest source of fasteners in the past
several years, followed by Germany, the U.S., Taiwan,and Italy, as shown in Table 2. South Korea, France, andUK were respectively the sixth to eighth largest sources offasteners for China in the past several years. It shows there
is little change in China’s sources of fasteners.
Overall, although China is affected by factors suchas geopolitical pressure, domestic economic challenges
and global inflation in 2023, steady fastener import
and an uptrend in export are still expected. Market
research institutions predict that the global industrial
fastener market value will grow 4% to USD 110.9
billion and automotive fasteners will grow 7% to USD
17 billion in 2023. With the prospect of expansion, it
is a must for Chinese fastener manufacturers to capture
overseas markets.

Pressing the Start Button for Grabbing
Overseas Shares
Fastener Fair Global was the highlight of this spring where wesaw exhibitors of China pavilion form a strong force competing with
Taiwanese and Indian manufacturers for orders. Fastener World
interviewed Chinese, Taiwanese, European and American exhibitors
there and found they were facing two different situations. On one hand,
we met those who claimed less than ideal numbers of orders received
because inventory level remained high at the European customers’side. On the other hand, there were those very satisfied to have met 60
existing customers and about 20 new customers in the first two daysof the show, and these exhibitors hoped to book a larger booth next
time. Some exhibitors found more customers from Central and Eastern
Europe. Here we see fastener inventory level this spring was still quite
varied among European customers, but no matter what, exposure is
the window of opportunities to get orders. Some of the largest Chinese
fastener manufacturers revealed to Fastener World that they would
exhibit in Nashville and São Paulo shows this year, hoping to tap into
more markets.
With the market fully open in 2023, there are already Chinese
manufacturers planning to go in groups to Germany, the U.S., Italy,
Japan, India and Taiwan to attend exhibitions and visit local enterprises
this year. With the EU carbon tax as a new challenge, the newenergy industry and upcoming exhibitions this year are new business
opportunities that Chinese fastener industry is grasping.

by Dean Tseng, Fastener World 著作權所有：惠達雜誌

China Fastener World no.68/2023

than to other countries, indicating that China's fastenerexport is highly dependent on the U.S. Other major
fastener export partners with China include the UnitedStates, Germany, South Korea, Vietnam, Russia, India,Japan, Mexico, UAE, and UK. China's fastener export
to these countries have generally been growing for four
consecutive years, indicating that the global demand for
Chinese fasteners has been increasing up to last year.

惠達雜誌033