RMB Appreciation Slows Export Growth And Domestic Industry Readjustment Speeds Up

According to the latest data from the Ministry of Commerce, because the RMB exchange rate continued to rise against the US dollar, in the first two months of this year, the 42 key commodities monitored by the Ministry of Commerce paid more than 18 billion 590 million US dollars in foreign exchange, leading to a 14.4 percentage point increase in the total import growth over the same period.

The change of exchange rate is becoming an important factor to make China's foreign trade undergo a slowdown in exports and import expansion.

Customs statistics also confirm this fact: in the first quarter of this year, China came out.

The amount of US $305 billion 900 million, an increase of 21.4%, was 6.4 percentage points lower than that of the same period last year. The import volume reached US $264 billion 480 million, an increase of 28.6%, which is 9.4 percentage points higher than that of the same period last year.

The cumulative trade surplus was $41 billion 420 million, down 10.6% from the same period last year, and a net decrease of $5 billion 20 million.

The price of our products begins to be under pressure in foreign markets, especially in the US market.

In particular, some low value-added industries, such as clothing, luggage and footwear, have been caught up in the "export difficult" situation.

Cai Minqiang, chairman of the largest wedding dress manufacturer in Chaozhou, said that from the order to delivery is usually about half a year, and during this period, the appreciation of the renminbi consumed most of the profits.

Since 2007, the cost of enterprises' export exchange has been increased by 20% to 25%.

Guotai Junan Securities recently issued a report that "although the enterprise can through the order negotiations or internal digestion part of the negative effects, but in the long run, the appreciation of the renminbi will still have a significant negative impact on export dependent enterprises."

This year, the overall export price of textile and clothing has increased by about 7.18%, while the appreciation rate of RMB will be over 10%.

That is to say, only RMB appreciation will squeeze about 3% of the profits of the textile and garment industry, while the average profit margin of the entire textile and garment industry last year is only around 3.9%.

Statistics show that Guangdong, a major trade province, has seen a significant decline in exports to the US in the first quarter of this year, with automatic data processing equipment and its components, clothing and accessories, plastic products and toy exports down by 8.6%, 25.6%, 10.7% and 6.3% respectively.

In the Yangtze River Delta region, export oriented enterprises are also in a difficult position: the export of garment enterprises dropped by 70% in the first quarter, and exports of computers and accessories dropped by more than 40%.

The recent export speed of machinery and electricity industry, which is the first place in China's export industry, is also slowing down.

Reporters learned from China Machinery Industry Federation that the export value of machinery industry increased by 31.83% in 2007 compared with 2006, but the value of export delivery increased rapidly, but the contribution rate to sales output value was dropping.

Judging from the statistics of the Federation, the value of export delivery in most months of 2007 is decreasing month by month.

China's shipbuilding industry is experiencing the pressure brought by the appreciation of the renminbi.

More than 80% of our ship's holding orders are from overseas customers. According to the international shipping market practice, ship building orders are priced in US dollars, and shipowners pay five times according to the progress of construction.

Compared with advanced shipbuilding enterprises, China's shipbuilding investment cycle is longer, generally from signing contracts to delivery needs two to three years.

The collection period is so long that it is priced in US dollars, which makes the profitability of ship enterprises closely related to the level of RMB exchange rate.

According to relevant data, the renminbi will lose about 2 billion yuan per RMB appreciation.

In this wave of rapid appreciation of the renminbi, some industries with independent intellectual property rights have performed well.

Han Xuesong, director of China Construction Machinery Industry Association, said that in 2007, the export volume of China's construction machinery industry was 8 billion 700 million US dollars, and the import volume was 4 billion 940 million US dollars.

Although the demand for international market is decreasing due to the international economic situation, the export of Chinese construction machinery still goes against the trend.

Han Xuesong believes that the decline in international demand has little impact on the export prospects of China's construction machinery industry, mainly because the independent research and development capabilities of industry products are improving and products are more competitive.

Fan Jianping, chief economist of the national information center and director of the economic forecasting department, said that while maintaining steady growth in exports, China should speed up the pformation of the mode of foreign trade development, optimize the export structure, encourage the export of independent intellectual property rights and independent brand products, improve the quality, grade and added value of export products, expand service exports and develop service outsourcing.