The Chinese hardware mold industry presents four major development characteristics

  The continuous downgrade of credit ratings in Europe, America and other countries has led to increasing pressure on the appreciation of the renminbi. Major mold companies dare not rashly take on long foreign trade orders to avoid losses caused by exchange rate fluctuations; The crisis of integrity damages the healthy and orderly development of China's mold industry; Mold companies lack independent innovation capabilities and brand awareness, and repeat the production of mid to low end products, making them very passive in market competition.

The cost of molds continues to rise, profit margins are further compressed, and market share continues to decline.

The cost of mold materials includes steel, rubber, hardware raw materials, logistics costs, and other expenses, which have significantly increased in recent years due to the impact of inflation. The supply pattern of rural labor in China is shifting from "unlimited supply" to "limited surplus". The increase in labor force between the ages of 16 and 64 decreased at a rate of 13.6% per year from 2004 to 2011 and is expected to stop growing in 2015, indicating that the demographic dividend is gradually disappearing. Therefore, since 2010, more than 30 provinces in China have successively raised their minimum wage standards. Generally, the monthly salary of mold workers is over 2500 yuan, and some factories even offer them over 5000 yuan. The high labor costs have gradually eroded the price advantage of China's mold exports, and some European and American merchants have begun to transfer orders to lower cost countries such as India, Vietnam, and Bangladesh.

The continuous downgrade of credit ratings in Europe, America and other countries has led to increasing pressure on the appreciation of the renminbi. Major mold companies dare not rashly take on long foreign trade orders to avoid losses caused by exchange rate fluctuations. For export-oriented enterprises such as mold exports, a 1% increase in the actual effective exchange rate results in a decrease of about 0.3% to 0.5% in the export/sales ratio. Therefore, solely due to exchange rate factors, the average cost of raw materials such as hardware and plastics has increased by at least 10% to 20% throughout the year. At the same time, the currencies of other countries in the world are also continuously appreciating against the US dollar, with varying degrees of appreciation compared to the Chinese yuan. This dual exchange loss causes more severe trauma to export-oriented enterprises compared to the increase in raw material and labor costs.

The crisis of integrity has damaged the healthy and orderly development of China's mold industry.

In the debt crisis of private enterprises that has emerged since last year, the credit of Chinese businessmen seems to have once again fallen to the "freezing point".   Since last year, there have been hundreds of incidents where some mold manufacturers in Wenzhou, Guangdong, and Fuzhou have "fled" or committed suicide due to debt crises, resulting in the closure and shutdown of their enterprises, seriously damaging the credit of mold companies. The insufficient internal capital flow has led to a debt crisis, and the demand for cash settlement from external trading partners has created a situation of "internal and external troubles" for Chinese mold companies, resulting in even more severe financial pressure. The increase in active and passive defaults by enterprises has once again exacerbated the decline in credit, forming a vicious cycle that seriously interferes with the healthy and orderly development of China's mold enterprises.

Mold companies lack independent innovation capabilities and brand awareness, and repeat the production of mid to low end products, making them very passive in market competition.

On the one hand, domestic mold making enterprises have a serious problem of product homogeneity and lack of differentiation. They basically imitate and modify other people's products, resulting in similar styles, materials, grades, goals, and markets in their production. Most of them focus on the production of low-end molds, leading to a serious surplus of low-end products and rampant vicious competition.   The turning point of China's hardware mold industry lies in whether enterprises can win at the high-end, meet market demand, seize opportunities, and achieve a trillion dollar scale in the hardware mold industry.

The hardware mold industry plays an irreplaceable role in industry, and with the development of industry, it will inevitably have immeasurable development prospects. However, there are currently many problems that limit the development of the hardware mold industry, such as a significant gap between the production structure of enterprises and market demand. In the long run, this will inevitably lead to extremely serious problems in the hardware mold industry, further increasing product inventory, and the mid to high end mold market gradually being seized by foreign mold companies. The hardware mold industry wins in the high-end market, which is also in line with the current demand of the mold market and the fundamental factor in solving the price war. At this stage, the supply of middle and low-end molds exceeds the demand. However, hardware mold enterprises have always adhered to their duties and not pursued innovation, leading to further intensification of competition in the middle and low-end mold market, while the middle and high-end market has become hollow. Therefore, the hardware mold industry should solve the problems in the development of the industry, resist the vicious competition mechanism, adjust the mold production structure, and win the high-end with the help of the Internet.

With the development of the times, traditional industries need to keep pace with the times, undergo industrial transformation and seek new development. There are no backward industries, only backward production methods. Hardware mold enterprises should enhance their innovation awareness, cultivate and form professional R&D teams, vigorously develop R&D technology for high-end products, and achieve the localization of high-end products as soon as possible; Optimize industrial structure and promote industrial upgrading; Developing industrial clusters and enhancing the competitive advantage of industry groups; Stabilize the domestic market and actively explore foreign markets.