AssociationHKSFC Chairman
Tsui Ping FaiFirst of all, can you share with us
the import and export performanceof the fastener industry in Hong
Kong in the past 2-3 years?
A: According to the data of the Hong Kong
Trade Development Council (HKTDC), the overall
export started to be very weak in 2022 and is still
declining, and fasteners, which are the basic partsof the industry, are also seriously affected.
The import and export trade, one of the major
driving forces of the Hong Kong economy, hascontinued to retrogress. The figures for this May showthat both imports and exports fell worse than expected,
resulting in the cumulative value of exports falling by
16.3% year-on-year in the first 5 months this year, while
the cumulative value of imports dropped by 13.4%, andthe trade deficit increased to HK$175 billion (about 20.4billion euros).
HK Financial Secretary Paul Chan stated clearly thatHong Kong economy has so far been supported mainly
by consumption, and he dares not say outright that theupper limit of the economic growth forecast of 3.5% to5.5% can be maintained. Economist Wai-Kee Yuen isalso pessimistic about the outlook of import and export
trade, saying that it is already very good that importand export will not drag down economic growth for thewhole year.

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Fastener World no.203/2023 惠達雜誌Compared with China, the export quantity of China's fasteners in JanuaryJune 2023 was 2,374,964 tons, down 96,603 tons or 3.6% year-on-year comparedwith the same period in 2022; and the export value was US$5,891.164 million,
down US$4,832.31 million or 6.9% year-on-year compared with the same period
in 2022.
Over the past few decades, many Hong Kong fastenersuppliers have shifted their production to Guangdong ormainland neighboring cities because of their proximity. Whatadvantages does this create for the fastener industry inHong Kong?
A: The advantages of relocating Hong Kong's fastener manufacturing to theMainland China are as below:
a. Low-cost labor: The relatively low cost of labor in Mainland China cansave manufacturing costs.
b. Abundant supply of raw materials: Mainland China has a wide range ofraw material suppliers.
c. Superior manufacturing infrastructure: Mainland China has modernizedproduction facilities and infrastructure.
d. Market potential: Mainland China has a large market that offers potential
customers and business opportunities.
e. Export Convenience: China has well-established Customs clearance
procedures and transportation links, which are conducive to the export ofproducts to int’l markets.

Association
f. Geographic location: Hong Kong's proximity to Mainland China facilitates product transportation and logistics.
g. Government support: The Chinese government provides various policy support and incentives to encourage foreign-invested
enterprises to set up production bases in China.
h. Technology and Talent: China has a wide range of technical and engineering talent that can provide assistance and expertise.
What kind of fasteners do most of your member companies produce? What are the main applications? What isthe approx. ratio of their domestic and export sales? What specific contribution can these Hong Kong companies
having sufficient experience in import/export, production and sales make to the global fastener supply chain?
A: Generally, they produce precision fasteners, including screws, nuts, bolts, screw bolts, threaded rods, screw rings, screw caps,
screw sleeves, threaded inserts, screw knobs, mainly used in automobile manufacturing, aerospace, high safety requirements of toys
and electronics industry, medical equipment, power industry, building and construction, mechanical engineering, transportation andrelated equipment. With the economic development of Mainland China, the current domestic demand has increased significantly
compared to the previous reliance on foreign sales (domestic sales: 40% / foreign sales: 60%). Contributions to the global fastenersupply chain from Hong Kong fastener manufacturers investing in China include:· Production bases: Hong Kong fastener manufacturers have established production bases in Mainland China to improve production
efficiency and reduce production costs, thus adding capacity to the global fastener supply chain.
· Quality control: fastener manufacturers investing in Mainland China often have modern production facilities and quality control
systems in place, helping provide high quality products and raise quality standards in the global supply chain.
· Market expansion: the Chinese market is huge, and investments by Hong Kong fastener manufacturers can help expand theirmarket share, while also providing broader opportunities for the global fastener industry.
· Supply chain diversity: investment in fastener manufacturers in Mainland China increases the diversity of the global fastenersupply chain and reduces the dependence of the global supply chain on a particular region or country.
· Innovation and technology: Hong Kong companies investing in Mainland China not only help with production, but also withtechnological innovation and R&D, thus providing more advanced fastener solutions globally. All in all, Hong Kong fastenerindustry's investment in Mainland China contributes more supply capacity, diversity, quality standards and market opportunities to
the global fastener supply chain, thus strengthening the competitiveness of the global fastener industry.
· Int’l Trade Hub: Hong Kong is strategically located in Asia, making it a hub for int’l trade. Hong Kong's well-developed freightand logistics infrastructure effectively connects fastener manufacturers and consumer markets around the world.
· Int’l exhibitions and exchanges: Hong Kong regularly organizes int’l exhibitions and exchanges related to fasteners, providingopportunities for industry players to showcase their products, establish partnerships and learn about industry trends.
Regarding the EU’s CBAM measures in apilot phase since Oct. 01, has the fastenerindustry in Hong Kong responded to themeasures in various aspects? Has HKSFC
provided some assistance and counseling to
its members?

manufacture, the company may need to prepare to pay carbon
tariffs to ensure fair competition.

A: For the fastener manufacturing industry, responding toCBAM may involve the following steps:

Hong Kong Screw & Fastener Council holds regular meetingsto share the latest news on CBAM carbon emissions, organizes
study tours, and works closely with government agencies such as
the Hong Kong Productivity Council (HKPC), where government
consultants provide us with professional advice on CBAM.

Determining carbon emissions: first, fastener manufacturers
need to assess the carbon emissions of their processes, including
production, transportation and raw material sourcing.
Adoption of measures to reduce emission: based on results ofcarbon assessments, fastener manufacturers can adopt measures
to reduce carbon emissions, such as improving production
processes, using more environmentally friendly raw materials,
or improving logistics and supply chains.
Compliance with regulations: to ensure that your businesscomplies with CBAM's regulations, including reporting carbon
emissions data and complying with related regulations.
Preparing to pay carbon tariffs: if the imported product does
not have a similar carbon reduction policy in the country of214

Fastener World no.203/2023 惠達雜誌Hong Kong government support: businesses can work withthe government, HKPC and others for support, guidance andresources to meet CBAM requirements.

Apart from the voluntary carbon footprint
verification conducted by the industry and thesubsequent introduction of carbon reduction
and improvement programs, does the Hong
Kong government also provide guidance andsupport to the industry in terms of policy inrelation to CBAM?
A: (a) HKPC provides a full range of carbon management
services such as carbon footprint, auditing and consulting;(b) Green Hong Kong - Carbon Audit; (c) Council for
Carbon Neutrality and Sustainable Development; (d) Carbon

AssociationNeutrality Partnership; (e) Green Tech Fund.
HK Government set up a Green Tech Fund (GTF) in 2020to support research projects that could contribute to carbon
reduction and environmental protection in Hong Kong.
Local public research institutes, research centers and privatecompanies engaged in these projects can now receive more
adequate and targeted funding. HK Government has injected
HK$400 million into the Fund. The amount of funding
provided under GTF ranges from HK$2.5 million to HK$30
million per project.
The Chinese government: the completion of the "doublecarbon" goal is inseparable from the financial and tax policy
support. It also gave four major requirements, including
all levels of finance divisions to increase support for thedevelopment of green and low-carbon industries, technology
R&D, etc.; to improve the government's green procurement
standards, and increase the purchase of green and low-carbon
products; the implementation of environmental protection,energy and water conservation, and preferential taxes for newenergy and clean energy vehicles and boats; studying tax
policies related to carbon emission reduction, etc. In addition,
the Ministry of Finance is taking the lead in drafting the“Guiding Opinions on Financial Support for Carbon Peak
Achievement and Carbon Neutrality.”
Facing a global fastener market surroundedby powerful competitors, is there any way forHong Kong fastener industry to enhance its
int’l competitiveness and uniqueness? Whatresources can HKSFC provide to help members
increase their visibility in the market?
A: a. Invest in R&D and innovation: to meet market demands
and provide better solutions through continuous R&D of
new technologies and products.
b. Improve product quality: ensure that the quality ofour products is at the highest level to meet customer
expectations.
c. Customization: understand customers' needs and provide
customized products to meet their requirements.
d. Environmental and social responsibility: moreconsumers are concerned about environmental andsocial responsibility issues. Adopt sustainable production
methods and actively participate in social responsibility
activities.
e. Brand building: invest in brand building and increase
product awareness through effective marketing and brandpromotion.
f. Int’l cooperation: cooperate with int’l partners to develop
new markets and products.
H K SFC reg u larly orga n i ze s techn ic a l semi nar s ,participates in government-subsidized cross-borderdelegations, and organizes delegations to visit internationallyrenowned exhibitions in order to enhance the visibility ofmembers in the market and to promote int’l exchanges
in fasteners and various types of automotive and medical
manufacturing industries. We are committed to ensuring

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Fastener World no.203/2023 惠達雜誌that our members are able to keep abreast of market
conditions and share their experiences in technology, quality
management, investment and operation in a cohesive andenjoyable manner.
What activities have been planned byHKSFC in 2024?
A: In 2024, we plan to organize the following activities:
Four Region Fastener Associations Conference, participationin overseas exhibitions (e.g., Automechanika Frankfurt, Expo
Nacional Ferretera, Fastener Expo Shanghai, etc.). We will alsoorganize some industry learning and exchange missions tocountries like Turkey, Vietnam, Japan, etc. We will also organize
promotional meetings and sharing sessions for the industry
and members to further exchange and interact with each other.
What are your expec tations for thedevelopment of the fastener industry inHong Kong in 2024?
A: Due to Hong Kong's unique historical background,along with the rapid development of China's economy in thepast 2-3 decades, Hong Kong's fastener industry has been
well supported in investing in the Mainland's industrial
market and infrastructure, including supply chain and policy
support. In recent years, the Chinese government's focus
on Hong Kong and the Greater Bay Area has brought
new and rich opportunities to Hong Kong. However, thetrade wars and pandemic in the past few years have adversely
affected China's exports and global economic demand. We
look forward to an early end to conflicts around the world
next year, the realization of world peace, and a decline inenergy prices before the global economy recovers and theconsumer power of countries increases, further boosting
demand for manufacturing and industrial products, and an
early recovery of our fastener market.
In addition, the Chinese government has recently fully
liberalized the manufacturing sector for foreign investors
by removing all restrictions on their access to the sector
under the eight actions of the Belt and Road Initiative.
This has had a positive and far-reaching impact on foreign
investors setting up factories of various technologies inChina. As long as more foreign-invested factories areestablished in China, the demand for industrial supply
chain components such as plastics, electronics, and ourfasteners and hardware parts will increase. This is thefuture we are looking forward to.
Thanks to the technological advancement of our investors
and customers from various countries, it has had a good impact
on China's industry, positively contributing to our raw material
production, equipment, product technology and innovation,and even the optimization of our software and automation
management systems. We look forward to Hong Kong and ourindustry counterparts working together, keeping pace with thetimes, exchanging ideas, and working together to meet new
challenges and opportunities such as carbon neutrality. We
wish you all the best for the coming year.
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