Trade Barriers "The Tip of the Iceberg" Fast Export Pressure on Fasteners

The Appellate Body of the WTO Trade Disputes Mechanism issued a report at its Geneva headquarters, which ultimately ruled that China’s success with China in the EU’s trade dispute over fasteners.

"Actually, anti-dumping of fasteners began in November 2007 when the European Union launched an anti-dumping investigation against my carbon steel fasteners. The country involved 760 million U.S. dollars, Zhejiang Province involved 320 million U.S. dollars, and Jiaxing city involved 97 million U.S. dollars, involving the fastening of Jiaxing City. There are 90 production and trading companies.” Yang Fengdan, deputy secretary-general of Jiaxing Fasteners Import & Export Enterprises Association, told the author.

Yang Fengdan stated that at that time, one third of the entire industry had already closed down or was in a state of suspension. One third of the enterprises were in production but were in a loss state. Only one third of the enterprises could maintain a meagre profit.

The Chinese fastener industry therefore loses 400 million euros in foreign exchange earnings every year and loses 800,000 jobs. "Made in China" Loss of Price Advantage, Dongguan Enterprise Average Profit Rate Drops to 2%

International trade barriers are only the “tip of the iceberg” that plagues Chinese export enterprises. As domestic production costs become higher and exchange rates become unstable, the price advantage of Chinese export companies is gradually losing.

“Today the exchange rate was 6.43, which reduced it by one cent.” On July 21, a person in charge of a foreign trade business in Guangdong told the author that under the high cost of domestic labor and raw materials, the foreign trade enterprises in Guangdong, especially small and medium-sized enterprises, survived. Space has become narrower.

He said: “When we negotiate with customers, we basically consider the exchange rate movements after 3 months. However, customers do not recognize this method. They can only change the exchange rate according to the current exchange rate within 3 months. The enterprise can't afford it."

“This invisible has greatly increased the pressure on the company. We cannot raise the price during this period. We can only 'lose money and earn money'.” He told the author, in addition to the cancellation of the export tax rebate policy of his industry, there were more than 5 million last year. Yuan’s export tax rebate has not yet seen signs.

Jiang Di said: “In the second half of the year, the pressure for appreciation of the renminbi is still very high, while the demand in foreign markets is limited. Compared with other countries, our price advantage and competitive advantage are gradually disappearing. At the same time, our main market is in the Middle East, and Iran’s current Due to the sanctions imposed by the EU and the United States, the company spent a lot of twists and turns before exporting more than 10 machines to the Iranian market."

According to Jiang Di, since Iran was sanctioned, the local letter of credit issued by the relevant departments to the company was cumbersome, it took a long time, and the payment period was long, which increased the risk of the company.

The double squeeze of exchange rates, domestic labor and raw materials has made it more difficult for foreign trade companies to survive.

Chen Guanda, deputy secretary-general of the Fastener Industry Association of Zhejiang Province, told the author that although the current fastener industry is picking up, the exchange rate instability makes many companies afraid to accept long lists and can only pick up the list of “small, fast and smart”.