China Market Insider New Opportunities for German SMEs in the Chinese Fasteners Market

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FAULHABER Drive Systems

Wuxi InfiMotion Technology Co., Ltd.

Sectors such as electromobility and robotics are currently booming in China. This is also creating an attractive, expanded market for manufacturers of fastening elements.

The "China shock" has recently become a favorite topic of some media and lobbyists in Berlin. China is flooding the German and European markets with its goods and German SMEs are unable to defend themselves against "unfair competition" from China, it is often repeated.

However, many companies that really look at the market in China and base their analyses on data are currently experiencing a completely different kind of "China shock". It stems from the realization of how many new growth opportunities there currently are for German and European companies in China. There are a shocking number of them and they are shockingly large.

Fastener manufacturers are a good example. Screws, nuts, bolts, rivets and special fasteners of all kinds are sometimes referred to as the "unsung heroes" in the world of industrial manufacturing.

They rarely make the headlines and yet little would be possible without modern "C-parts". They are the backbone of modern high technology. As Germany has a large number of quality manufacturers in this segment and China is currently growing very strongly in the high-tech sector, there are enormous synergies here.

The Chinese business of German manufacturers of high-end fastening technology is growing at double-digit rates in some segments. Examples include the internationally active Würth Group from Künzelsau in Baden-Württemberg and Kamax in Homberg, Hesse.

In addition to the traditional industries that require many connectivity solutions, such as the automotive industry and mechanical engineering, there are new growth drivers such as robotics, e-mobility, wind energy and other renewable energies. All of these future industries are currently growing very quickly in China.

Electromobility, for example, is changing the requirements for fastening technology considerably. The price alone is a good indication of this. While fastening elements worth around 100 euros (120 USD) are completely sufficient for many conventional vehicles with combustion engines, similar parts for electric vehicles (EVs) are often more than 30 percent more expensive.

In the low-price segment, Chinese manufacturers of connection technology are now very good and often more cost-effective than foreign suppliers. However, the situation is different for special components for battery packs and 800 V high-voltage connectors, which have to meet extreme requirements in terms of corrosion resistance and precision. This is where German manufacturers or distributors such as Bossard from Switzerland still score highly.

Another good example is robotics, in particular the emerging field of humanoid robots. According to current forecasts, the sector could reach a global market volume of more than 80 billion euros by 2030.

Fastening elements often act as "joints" or are important components of the motors, where the highest precision and advanced material properties are again required so that the parts are light and yet powerful enough.

Not only traditional metal parts are in demand, but increasingly also products made from PEEK materials and other high-precision components made from thermoplastics.

Or take the "low-altitude economy" of drones, air cabs and everything that goes with them. Chinese producers of fastening technology (yes, they are getting stronger, the competition is growing) that focus on this future-oriented field, such as Shanghai Essence (Chaojie Gufen), saw their share prices rise by more than 200% last year, the trade journal "Zhongjin Zaixian" reported a few days ago.

The value of the shares of fastener manufacturer Finework rose by more than 700 percent within a year. In addition to advanced fastening system solutions for air cabs, the company also focuses on high-strength fasteners for the aerospace, nuclear and wind power industries.

Not every European company can keep up with such a product range. However, there is nothing to be said against a strategy that keeps an eye on future fields in China and uses its own decades of engineering expertise to manufacture certain parts for which demand in China is currently booming.

In the wind energy sector, there is also a trend towards ever-increasing technical demands on connection technology due to the megawatt capacities of huge turbines or in offshore wind farms. Due to the enormous centrifugal forces and harsh weather conditions, high-strength screws with advanced anti-corrosion technology are in demand. Intelligent parts are also increasingly in demand, for example for real-time monitoring.

Chinese manufacturers are steadily catching up, as statistics and reports from specialist media in the People's Republic show. "In the top segment of high-end products, there is still a noticeable gap to global market leaders," wrote the portal "Puhua Youce" just recently.

However, when it comes to special alloys, extreme design and detailed process knowledge (such as ultra-precise heat treatment), many Chinese companies are still reaching their limits. This is precisely the lucrative niche for German multinationals such as the Würth Group, as well as many smaller specialist suppliers.

The focus on digitalization and artificial intelligence is important for the Chinese market. The trend in fastening technology is already clearly moving in the direction of data- and model-driven solutions.

In the future, fasteners will increasingly be equipped with embedded sensors that monitor temperature, vibration or preload force in real time in order to meet the requirements of the Industrial Internet of Things (IIoT).

Conclusion: For German SMEs and many "hidden champions", the Chinese market offers enormous potential in 2026 and beyond, where the focus is on quality, technological expertise and the ability to offer complex system solutions instead of just mass-produced goods. That's a pleasant kind of "China shock", isn't it?