Hardware tool industry needs no hurry and steady development

The hardware tool industry in China has grown into a major manufacturing hub, continuously striving to enhance product quality. According to customs data, in 2011, the export value of tool hardware reached $10.606 billion, marking a year-on-year increase of 26.7%. Among the categories, small power tools saw an export value of $2.614 billion, up 22.3% compared to the previous year. Saw products were valued at $1.12 billion, rising by 24.9%, while garden tools increased to $563 million, a 16.8% growth. Pliers and wrenches also showed strong performance, with exports reaching $608 million and $607 million respectively, both increasing by over 20%. Tool kits, another significant category, generated $4.31 billion in exports, a 15.9% rise. On the import side, the total value reached $5.166 billion, a 21.9% increase from the previous year. Measuring tools led the imports, with a value of $2.673 billion, up 26.4%. Small electric tools also saw a 16.1% increase, reaching $433 million. Wrenches imported amounted to $118 million, up 2.6%, while saws increased by 35.3% to $234 million. Utility tools rose sharply by 53.8% to $40 million, and pliers increased by 28.6% to $36 million. Garden tools, though smaller in scale, still grew by 28.9% to $49 million. Despite the overall positive trend, there are underlying challenges. Traditional hand tools like wrenches, pliers, and saws remain highly sought after in international markets, with sustained growth rates around 20%, indicating that Chinese hand tools are gradually capturing more market share. The continued growth in exports of items such as small power tools, garden tools, and kits shows that demand in key Western markets hasn't dropped despite the financial crisis. These products are popular among DIY enthusiasts. Notably, the import figures highlight a paradox: even though China is home to some of the world’s largest manufacturers of wrenches and pliers, the import volume for these items reached nearly $150 million. Measuring tools, although produced by companies like Oriental Seiko and Great Wall Seiko, still face a large trade deficit. In 2011, while exports of measuring tools reached $897 million (up 50%), imports surged to $2.673 billion, resulting in a deficit of $1.776 billion — one of the largest in the hardware sector. Industry experts suggest that many Chinese tool exports are still based on OEM production, with foreign brands rebranding domestic products for sale back in the market. This highlights the urgent need for Chinese companies to focus on brand building and channel development to avoid being stuck in low-profit manufacturing roles. Wang Qiuqin, Secretary General of the Jinhua Tool Hardware Industry Association, noted that in 2011, most local manufacturers operated at full capacity, but faced challenges in recruitment and expansion. Despite high order volumes, profit margins remained low, with only a few large companies achieving profits above 20%. Most firms struggled with profitability below 10%. A common issue in the industry is the lack of pricing power due to intense competition and homogenized products. Many companies rely on volume rather than value, which can lead to long-term constraints. The growing presence of Indian and Taiwanese tools in global markets adds further pressure. Zhou Jihua, however, remains optimistic. He believes that China's tool industry has developed steadily and healthily, with continuous improvements in quality and market share. As the industry grows, it has contributed to the decline of Western tool manufacturing. While competition exists, he believes that if China maintains its steady progress, it will eventually become a true global leader in the tool industry.

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