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Though China is a large manufacturing country, it focuses on pure manufacturing industry. Almost 90% of the domestic profits are engulfed by the foreign companies, and owing to the negative competition among businesses of the same trade, the companies yield minimal profits. China manufacturing industry is not at risk.
China industry giant Germ-Year Industrial says it will undergo a business transformation from “fastener manufacturing” to “hardware sales logistics”. Even though the construction of China’s high-speed rail has benefited Gem-Year, obvious disadvantages are gradually revealed. Due to some uncontrollable factors such as the high-speed train accidents, the construction of the high-speed rail slows down, which causes Gem-Year’s net profits of the first three quarters in 2011 to decline by 50% over the same period last year. Under this pressure, Gem-Year plans to establish a complete hardware sales logistics system to integrate the fastener manufacturing and the sales service as one complete system.

Gem-Year expects after the completion of the sales logistics delivery items, it will contribute an annual average sales revenue of RMB2.004 billion and an annual average net profit of RMB154 million.