前門豺狼，後門虎豹下的競爭出路

Survival Betweena Rock and a Hard Placeby Dean Tseng, Fastener World

Since the beginning of 2022, the global market took the brunt of two
shock waves—the war and the face-off between two of the world’s
largest political economic entities—triggering a sea change that virtually
flips the global supply chain structure. Meanwhile, on September 2 theOffice of the United States Trade Representative decided to launch 301
investigation and continue the imposition of tariff on China followed byreviews of these actions. The anti-dumping tax on China imposed by EU
remains effective. These factors are inextricably entwined, creating alarge pressure against the Chinese fastener market, and therefore it callsfor examining China’s fastener trade of the first half of 2022.

First of all, China and Taiwan are respectively thelargest and second largest fastener suppliers in the world.
To better objectively understand China’s fastener trade,
this article compares fastener trade of China to that of
Taiwan and analyze respective situations and challenges.
Next, the article will attempt to suggest several potential
countermeasures against the current crisis. Lastly, thearticle will point out a potential competitor that both China
and Taiwan have to be prepared for immediately.

Highlight 1: Comparison of China’s and Taiwan’s Fastener Trade
China’s Fastener Trade in First-half 2022 (USD)
Ranking0

ImportSourceWorldFirst Half ofExport2022
Destinations
1,475,295,976
WorldFirst Half of2022
5,148,551,761

ImportSourceWorldFirst Half of2022
108,226,355

ExportDestinations
WorldFirst Half of
2022
3,183,209,705
1,427,203,915

1Japan439,819,788

U.S.A.

858,125,493

Japan

36,177,839

U.S.A.

2

Germany

271,571,176

Germany

308,014,680

U.S.A.

21,424,773

Germany

260,847,004

3

U.S.A.

200,127,590

Vietnam

223,559,285

China

12,563,243

Netherlands

169,348,088

4

Taiwan147,377,359

S. Korea

221,971,974

Germany

7,266,443

Japan

149,510,874

5

Italy

69,391,472

Russia220,191,744

S. Korea

5,541,891

UK

109,955,298

6

S. Korea

61,354,528

Japan

201,985,763

Vietnam

3,009,690

Canada107,050,441

7France32,780,607

India

172,586,224

Netherlands

2,694,695

China

88,074,895

8

UK

24,980,984

UK

154,190,272

Philippines

2,570,308

Italy

71,511,493

9

Turkey18,765,358

Italy

146,440,438

Switzerland

2,110,473

Sweden71,109,514

10

Switzerland

15,773,304

Australia

145,622,009

Sweden1,740,430

Mexico70,972,853

China’s Fastener Trade in 2021 (USD)

China Fastener World no.66/2022

Taiwan’s Fastener Trade in First-half 2022 (USD)

Ranking

ImportSource

2021

0

World

1

Japan

2

Germany

3

U.S.A.

4

Taiwan5Italy6

S. Korea

78

Taiwan’s Fastener Trade in 2021 (USD)

ExportDestinations

2021

ImportSource2021

3,280,746,110

World

9,303,405,675

World

206,147,825

World

5,322,552,883

983,969,032

U.S.A.

1,263,573,726

Japan

78,090,806

U.S.A.

2,249,900,692

630,243,449

Russia544,573,376

U.S.A.

35,474,785

Germany

454,994,012

398,160,844

Germany

533,707,080

China

21,189,220

Netherlands

291,941,389

324,224,022

Vietnam

457,539,548

Germany

14,582,412

Japan

246,072,681

172,577,180

S. Korea

405,583,971

S. Korea

9,414,381

UK

209,199,205

132,572,356

Japan

346,444,260

Philippines

5,401,730

China

191,243,730

France73,700,211

India

298,269,602

Vietnam

5,375,493

Canada177,039,530

UK

53,832,105

Italy

277,500,682

Netherlands

5,205,645

Sweden121,737,174

9

Turkey40,893,282

Australia

266,465,334

Switzerland

2,937,108

Mexico119,553,758

10

Switzerland

33,779,764

UK

260,145,375

Sweden2,678,180

Italy

103,873,841

ExportDestinations

2021

In the first half of 2022, China exported USD 5.14 billion worth of fasteners to the world, which is 1.6 times more than Taiwan’s
global export value of USD 3.18 billion in the same period. In the value of fastener import from the world, China was USD 1.47
billion and Taiwan was USD 108 million. Taiwan demanded far less fastener import from the world than China did. China’s top056

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3 export destinations were the U.S.A. (USD 850million), Germany (USD 308 million) and Vietnam(USD 223 million). Taiwan’s top 3 export destinations
were the U.S.A. (USD 1.42 billion), Germany (USD260 million) and the Netherlands (USD 169 million),and Taiwan exported USD 88.07 million worth offasteners to China. It shows that the U.S.A. andGermany were the top 2 fastener export destinations
for both China and Taiwan in the first half of 2022. Interms of import, the top 3 sources for China were Japan(USD 430 million), Germany (USD 270 million), andthe U.S.A. (USD 200 million). Additionally, Chinaimported USD 140 million worth of fasteners fromTaiwan in the same period. Taiwan mainly imported
from Japan (USD 36.17 million) and the U.S.A. (USD21.42 million), and it also imported USD 12.56 million
worth of fasteners from China. Japan was the largest
fastener import source for both China and Taiwan.
Germany and the U.S.A. were respectively thesecond largest source for China and Taiwan.

In 2021, China exported USD 9.3 billion worth of fasteners to the world,which is 1.7 times more than Taiwan’s export value of USD 5.32 billion in
the same period and it resembles the aforementioned difference of scale infirst-half 2022. In the value of fastener import from the world, China wasUSD 3.28 billion and Taiwan was USD 206 million. China’s top 3 exportdestinations were the U.S.A. (USD 1.26 billion), Russia (USD 544 million)
and Germany (USD 533 million). Taiwan’s top 3 export destinations
were the U.S.A. (USD 2.24 billion), Germany (USD 454 million) and theNetherlands (USD 291 million), and Taiwan exported USD 191 million
worth of fasteners to China. The U.S.A. was the largest export destination
for both China and Taiwan. As for the second largest export destination,
it was Russia for China and Germany for Taiwan. In terms of import,
the top 3 import sources for China were Japan (USD 983 million), Germany(USD 630 million), and the U.S.A. (USD 398 million). Additionally, China
imported USD 324 million worth of fasteners from Taiwan in the sameperiod. Taiwan mainly imported from Japan (USD 78.09 million) and theU.S.A. (USD 35.47 million), and it also imported USD 21.18 million worthof fasteners from China. Japan was the largest fastener import source forboth China and Taiwan. Germany and the U.S.A. were respectively thesecond largest sources for China and Taiwan.

China’s Fastener Trade in 2020 (USD)

0

ImportSourceWorld

ExportDestinations
2,786,542,569
World
2020

2020
6,959,807,809

ImportSourceWorld

157,680,579

2020

ExportDestinations
World

3,969,360,344

2020

1Japan852,790,240

U.S.A.

827,330,702

Japan

61,494,765

U.S.A.

1,689,801,153

2

Germany

561,700,799

Vietnam

484,775,853

U.S.A.

27,844,570

Germany

340,191,792

3

U.S.A.

315,945,338

Russia404,230,744

China

15,143,539

Japan

209,498,781

4

Taiwan234,702,416

Germany309,148,054

Germany

10,329,451

Netherlands

195,105,056

5

Italy

141,111,449Japan

270,056,188

S. Korea

5,660,405

UK

136,840,671

6

S. Korea

130,805,250

S. Korea

249,571,286

Netherlands

4,058,735

China

129,131,272

7

France62,370,515

UAE

213,085,446

Vietnam

3,719,309

Canada128,760,834

8

UK

46,517,579

India

203,159,577

Switzerland

2,182,902

Sweden85,303,928

9

Malaysia

28,608,755

Myanmar199,601,983

Sweden2,033,164

Mexico77,878,026

10

Switzerland

28,247,190

Thailand

196,292,352

UK

2,017,286

Italy

70,888,895

In 2020, China exported USD 6.95 billion worth offasteners to the world, which is again 1.7 times more than
Taiwan’s export value of USD 3.96 billion in the same period.
In the value of fastener import from the world, China was
USD 2.78 billion and Taiwan was USD 157 million. China’s
top 3 export destinations were the U.S.A. (USD 827 million),
Vietnam (USD 484 million) and Russia (USD 404 million).
Taiwan’s top 3 export destinations were the U.S.A. (USD
1.68 billion), Germany (USD 340 million) and Japan (USD
209 million), and Taiwan exported USD 129 million worthof fasteners to China. The U.S.A. was the largest export
destination for both China and Taiwan in 2020. As forthe second largest export destination, it was Vietnam for
China and Germany for Taiwan. In terms of import, the top
3 import sources for China were Japan (USD 852 million),
the U.S.A. (USD 561 million), and China (USD 315 million).
Additionally, China imported USD 234 million worth offasteners from Taiwan in the same period. Taiwan mainly
imported fasteners from Japan (USD 61.49 million), the U.S.A.
(USD 27.84 million) and China (USD 15.14 million). Japan
was the largest fastener import source for both China andTaiwan. Germany and the U.S.A. were respectively thesecond largest sources for China and Taiwan.

China’s global fastener export grew 33.8% from USD 6.95
billion in 2020 to USD 9.3 billion in 2021, and reached USD 5.14
billion in the first half of 2022, having a potential to grow 7.5%
to USD 10 billion for the 12 months of 2022. Despite the virus
and city lockdown in the last two years, China’s scale continued
to grow, but a big concern is that the growth margin of this year is
likely to decrease over 20%.
Taiwan’s global fastener export grew 55.1% from USD 6.95
billion in 2020 to USD 9.3 billion in 2021, and reached USD 5.14
billion in the first half of 2022, having a potential to grow 12.7% to
USD 10 billion for the 12 months of 2022. Taiwan gained a large
number of orders from overseas last year and expects to grow one
fold more than China, but this is far less than the drastic growthlast year. For Taiwan, the concern is that the U.S and European
clients have yet to clear up their inventory; therefore, they have lesspurchasing demand for Taiwan.
Caught between the domestic impact (lockdown) and foreign
impact (AD tax imposed by EU and 25% tax by the U.S.A.),
China was still able to perform well in fastener export, because
the Chinese government provided subsidies and the Chinese
steelmakers offered highly competitive wire prices. Furthermore,

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China Fastener World no.66/2022

Ranking

Taiwan’s Fastener Trade in 2020 (USD)Editorial
China increased fastener export to places other thanthe U.S.A. and Europe. This indicates China’s impact
mitigation strategy to quickly scatter export and notconcentrate on a single market in the face of overseas
barriers. In contrast, exporting nearly 90% of fasteners
to the U.S.A. and Europe, Taiwan can reference China’s
experience and explore overseas regions other than theU.S.A. and Europe to be able to cope with future drasticchanges. The emerging countries will become a nichemarket for both China and Taiwan in need of increasing
export destinations.

Highlight 2: Action Taken inResponse to the Situation
The market change is huge and it creates a largepressure. Operating cost is higher now. Staff turnoverrate is high. It is difficult to keep or recruit talents. SomeChinese fastener companies said they would rather justmake reputation than make good screws. The difficult
issue for them right now is to persuade customers
coming with inquires into placing an order. Even if thecustomers do place it, the Chinese fastener companies
will have to wait very long to claim the payment, whichmakes cash flow management a difficult hassle.

Tax Rebate and Deferral

China Fastener World no.66/2022

This is a common issue for companies in the grandchallenging environment. To further help business and058

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More Chinese Companies are Shifting toE-commerceWith supply chain issues and peer competition, many
Chinese companies turn their focus and put their products
on one-stop online fastener purchasing platforms including
ZKH, GYPH, Tong Ming's e-commerce platform, andTao Ding Ding. They realized that clients are less willingto spend more time doing a blind search over the net only
to find more ads they don’t need, especially now whenmaterial and logistics prices are high. Therefore, a shift
to e-commerce is the best way to satisfy clients’ need tocompare prices and accurately find suppliers while having
the platforms’ guarantee on quality. More company owners
think it is already too late to wait for clients to come and thatthe immediate remedy is to increase exposure via the digital
Internet. Some of them turn to Fastener World’s exclusive
web page listing for registered suppliers and online purchaseand sales platform which links clients straight to buyers from200 countries, looking to expand product exposure overseas.

“Clustering” and “Overseas Warehousing” Underway
China’s fastener market scale amounted to RMB 145.87 billion last year.
The export grew 33% to USD 9.3 billion. Demand continues upward andmotivates many Chinese fastener companies to move into industrial parks.
Clusters of high quality fastener companies worth over RMB 10 billion haveemerged from multiple places. The biggest advantage of clustering is supply
chain and vertical/horizontal integration to further attract domestic andoverseas buyers.
In addition, overseas warehousing means shipping out domesticmerchandise through high-volume transport and distribute through overseaswarehouses. Distributing through overseas warehouses generates far lower costthan through warehouses in China. Already there is a hardware components
company in China having exported USD 20 million worth of products to theMiddle East via overseas warehouses. Overseas warehousing could open up a
new path within a series of challenges for Chinese fastener companies.

Look Out! New Economic Powerhouse
Coming up from the SouthOver the years Fastener World has been monitoring and forecasting
market development, and lately we have observed a sign indicating theU.S.A. is looking to help India become the second “world's factory”. The
future India could become an emerging nation with the highest potential in
the world. It also has a large population of labors who are mostly younger
than the Chinese. It can offer prices lower than China's, and it enjoys
preferential tariffs as an RCEP member. India could be a tiger awoken
from sleep and could sweep the world as a powerful competitor to fastenercompanies in many countries, so fastener business owners should prepareahead.

China Fastener World no.66/2022

stabilize the economy, the State Council of China deferred
tax for another 4 months beginning from September and thetotal deferred tax value has amounted to RMB 440 billion.
Meanwhile, the Council opens immediate tax rebate upon
application which will rebate RMB 3.2 billion for the Chinese
manufacturing sector. According to sources, this policy has
helped Chinese fastener companies in Yongnian District of
Handan City to rebate RMB 90.45 million, enabling them toinvest in product development and expand production.

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