The Appreciation Of The Renminbi Is Uncertain.

At present, many agencies and international investment banks predict that the RMB will increase by 3% or more in the next 12 months, but according to the latest research report of the national development and Reform Commission, the average profit margin of China's textile industry is only 3%.

The report was written by the textile and Quality Department of the national development and Reform Commission's Economic Operation Bureau. The report conceded that the average profit margin of the textile industry is currently only 3%. "Under the current growth mode of foreign trade, the appreciation of the RMB and the adjustment of the export tax rebate policy will have a greater impact on the production and operation of enterprises."

China's first textile network "pony sight" believes that the reform of the RMB exchange rate mechanism is an important part of China's improvement of the market economy system.

The adjustment of exchange rate is also a great challenge to the textile industry.

"Pony sight" analysis shows that in the long run, it has positive significance for easing textile trade friction, promoting the structural adjustment of textile industry and changing the mode of growth.

However, because the textile industry is a labor-intensive industry with large trade surplus and low average profit rate, the average profit margin of the industry is about 3%, which is 60% of the national manufacturing industry, and the ability to resist exchange rate risk is weak. The appreciation of RMB has a great impact on the economic operation of the textile industry.

1, it has a significant impact on the current profit.

In September 1st, the central parity price of 7.9540 is calculated, the appreciation will reach 3% or so by 7.72.

In order to maintain the competitiveness of product prices in the international market, some Chinese textile enterprises will have to lower prices to offset the impact of this appreciation. If so, the profit margin of 3% will be a bottom line for many textile enterprises to survive.

2, enterprises have insufficient response to the challenges brought by the reform of exchange rate mechanism.

Over the years, the renminbi has been devalued against foreign currencies, and the exchange rate reform with the background of RMB appreciation is a new challenge for enterprises. Especially, textile enterprises with high export dependence generally find it difficult to adapt to it, and lack the ability to avoid exchange rate risks by using a variety of financial means.

According to the survey, most textile enterprises believe that the appreciation of 2% is only the beginning of the appreciation cycle, and there is great concern for the continued appreciation.

Enterprises are afraid to take orders when they receive orders.

Most enterprises in Guangdong only have enough orders for about a month, less than the same period in previous years.

3, if the RMB continues to appreciate significantly, the textile industry will be unbearable.

The tradable goods in the cost of textile products (the cost elements that can be imported or the price linked to the international market) and the bargaining power of enterprises are the factors that offset the negative effects of appreciation.

The import value of tradable commodities such as cotton, wool and chemical fiber (and raw materials) will be larger. The appreciation of RMB will reduce the cost of imports. Although bargaining power can pass the effect of appreciation, the bargaining power of enterprises will decrease with the increase of RMB appreciation, that is, the continued appreciation of RMB, the bargaining power of industries and enterprises will continue to weaken, and the efficiency of export products will be greatly reduced. Therefore, the textile industry has a limited bearing on the appreciation of RMB.

According to the data of the first half of 2006, taking into account the proportion of tradable goods in cost and the bargaining power of the industry and other factors, taking the breakeven point of export products as the maximum appreciation rate of the RMB, the textile industry's export products can withstand an appreciation of 6%-8%.

4, the impact of appreciation on various industries is different.

The upstream and downstream industry chains of textile industry are closely related, the products are various, and the tradable products, bargaining power and export dependence of each link are different. Therefore, the impact of RMB appreciation on the different industries of textile upstream and downstream is different.

(1) the cotton spinning and chemical fiber industry is the basic industry in the textile industry, accounting for 33% and 13% of the output value of the whole industry.

Because of the large initial processed products, low added value and low bargaining power, the ability of export products to withstand the appreciation of the renminbi is the weakest. However, the proportion of raw materials imports is large (30% and 60% respectively), and the proportion of exports is small (exports account for 4% and 8% respectively).

Therefore, the appreciation of RMB has little impact on the cotton textile and chemical fiber industry as a whole.

(2) textile products such as home textiles and knitted fabrics have a large volume and wide profit margins, though higher than those in the initial processing industry. However, due to fierce competition, the bargaining power of export products is also affected, and the proportion of exports is relatively high (about 40%), and the direct import of raw materials is relatively small. The appreciation of RMB has a greater impact on the two industries.

(3) as the final product, garments are mainly small batch and multi varieties with high added value. Although the export proportion is high (close to 50%), the average profit rate of garment enterprises above designated size is over 4%, which is 1 points higher than that of the whole industry, and the bargaining power of the industry is relatively strong. The impact of RMB rising value on the garment industry is smaller than expected. However, many small garment enterprises under the scale are mainly based on order processing, and the added value is low, which is obviously affected by the appreciation of the renminbi.

It is estimated that the impact of exchange rate adjustment on various industries is as follows:

When the RMB appreciated by 2%, the profits of the whole industry decreased by 20%, of which the cotton textile industry dropped by 30%, the knitting industry dropped by 27%, the home textile industry dropped by 18%, and the clothing industry dropped by 11%.

When the RMB appreciated by 5%, the profit of the export products of the industry dropped by 66%, of which the cotton textile industry dropped by 94%, the knitting industry dropped by 82%, the home textile industry dropped by 58%, and the clothing industry dropped by 46%.

When the RMB appreciated by 8%, 6.5% and 5.5% respectively, the export of garments, knitted and cotton textile industry was changed from profit to loss.

I recall that in July this year, when the RMB exchange rate reform was 1st anniversary, China's first textile network, Oriental Morning Post and textile weekly jointly launched the survey of "the anniversary of the reform and revaluation".

A total of 100 enterprises were involved in the survey.

The proportion of male respondents was 70%, and the proportion of female respondents was 30%.

35% of the respondents were between 41 and ~50 years old.

30% of the respondents earned monthly income between 5001 yuan and 8000 yuan.

The survey shows that although the appreciation of RMB has a certain impact on China's textile enterprises, it can not deny the positive side that the exchange reform has played on textile enterprises. Many enterprises have achieved a successful breakthrough in the trade structure, improved the technical content and grade of the products, and finally made considerable gains.

although