China's export of fastener products difficult to take the high-end route to survive

According to the Chinese Ministry of Commerce recently issued a news report, the EU issued an official announcement and decided to launch an anti-circumvention investigation on China's re-export of EU-based fastener products from Malaysia. As industry stakeholders fear, a new round of trade friction between China and the EU will come. Following the anti-dumping and countervailing investigations, this time the EU used anti-circumvention investigation as a remedy for Chinese products.

Exports of Chinese products are difficult

The European Union stated that since January 31, 2009, after the European Union formally imposed anti-dumping measures on fasteners originating from China, the export path of related Chinese products has changed significantly. The number of products transshipped to the EU market through Malaysia has increased, and the European market has increased. Continued low-price dumping has severely weakened the effectiveness of the existing anti-dumping measures. China, as the world's largest fastener producer, has been at a stage of rapid industrial development in recent years, and its ability for independent innovation is steadily increasing. Nearly 10,000 domestic production and trading companies have contributed more than 100 jobs. In November 2008, the EU began anti-dumping investigations on fasteners that China exported to the EU. On January 31, 2009, the European Union officially took anti-dumping measures against Chinese fasteners and imposed anti-dumping taxes of up to 87%. On December 3 of the same year, the European Commission decided to impose a formal anti-dumping tariff of up to 87% for five years on steel fasteners imported from China on the basis of the votes of 14 countries, 12 countries, and 1 country abstaining.

The EU is the main export market for fastener products in China. The EU's anti-dumping measures have severely hit China's fastener industry. In 2009, affected by 87% of punitive tariffs in the EU, nearly 900,000 tons of domestic fastener products could not be exported, and the industry’s total exports fell by 43% year-on-year. The use rate of fastener manufacturers’ equipment was also from the previous 84% once dropped to about 70%. In addition, foreign manufacturers are not hesitating to take advantage of dumping measures to step up their efforts to seize the Chinese domestic market. The domestic fastener industry has been greatly impacted and challenged. Currently, one third of the companies in the industry have stopped production, and one third of the companies are in semi-discontinued state. "If this investigation is finally established, we are likely to lose the European market again, and companies will inevitably suffer major losses," said a person in charge of a fastener manufacturer in Jiangxi Province.

Through interviews with a number of Chinese fastener manufacturers, the author learned that Chinese companies are turning to Malaysia to export their products to the EU. In order to re-enter the EU market, Malaysia, which has excellent ports and is relatively easy to obtain import coupons, has become the first choice for many Chinese companies. However, frequent “borrowing” and over-influx of products by enterprises has quickly brought Malaysia into the sight of EU investigators. As a result, an EU anti-circumvention investigation of Chinese companies emerged.

Take the high road to survive

At present, the market competition between China's fastener companies and foreign counterparts has gradually entered the white-hot stage. In order to deal with anti-dumping and anti-circumvention investigations in countries other than the European Union, how should China's fastener companies in distress respond? In an interview with this reporter, an official from the Quality Supervision Bureau of Jiangxi Province gave such an answer. In the face of trade barriers, companies can gradually shift their product sales focus to the domestic market, striving to pull overseas markets through the pull of the domestic market. pressure. According to him, at present, many fastener companies have vigorously developed domestic sales, and the quality of their products has become more and more in line with national standards. The official also stated that in the face of the EU’s anti-circumvention investigation, Chinese fastener companies should take the high-end route if they want to find a space for survival and development in the crisis.

According to the author's understanding, as the fastener industry in China is a labor-intensive industry, the added value of the export products is low. If the technical content is not improved, there may be more trade frictions in the future. Therefore, some scholars have suggested that domestic companies should make breakthroughs in technology in the future, improve their core competitiveness, speed up product structure adjustments and upgrades, and turn cost advantages into innovative ones.

At the same time, as for the anti-circumvention investigation recently proposed by the European Union, the person in charge of the Ministry of Commerce’s Law and Article Department said: “The Chinese government firmly opposes any abuse of trade remedy measures and encourages trade protectionism. At the crucial moment when the global economy is facing challenges and difficult recovery, The Chinese side believes that the EU should not pursue trade protectionism. The Chinese government is confident and determined to safeguard the legitimate interests of Chinese industry and create a fair trading environment."