Dialysis RMB Exchange Rate Appreciation Of Six Months, Whether The Future Can Continue?

Entering the 2008, the appreciation of the RMB against the US dollar accelerated significantly. From less than 100 days in the beginning of the year, the RMB exchange rate broke through the 7.2 and 7.1 passes, with an appreciation rate of about 3%. In April 10th, it broke through the integer pass of 7 and entered the "6 era" of the RMB exchange rate.

Since then, the rate of appreciation has slowed down and repeated until June.

Since June 2nd, the RMB has returned to the rapid appreciation channel.

Because of the innate influence of the US dollar and the accelerated appreciation of the RMB against the US dollar, it has brought profound changes to the operation of foreign trade enterprises and the adjustment of industrial structure.

"This half year exchange rate trend exceeds our expectation and also increases the pressure of enterprise survival."

Zheng Jianfan, chairman of Ningbo Hengda Knitting Co., Ltd. said, "when China carried out the reform in 2005, the industry predicted that the renminbi would rise to almost the same as Hong Kong dollar, but the exchange rate change has gone far beyond expectations."

Ningbo Hengda Knitting Co., Ltd. has a large scale, with a dyeing factory, weaving mill, knitting factory and import and export company, and set up points overseas. Under the current exchange rate changes, they rely on a complete industrial chain, and the company can still support it.

However, Zheng Jianfan said that many other small companies were forced to close because profits were severely compressed.

In fact, since last year, some foreign trade enterprises such as the Pearl River Delta, Shandong Peninsula, especially textile and garment labor-intensive enterprises have closed down or pferred out.

Behind this phenomenon, the acceleration of RMB appreciation has made the profit compression of enterprises one of the major reasons.

Before the exchange rate reform in 2005, the appreciation rate of RMB against the US dollar has exceeded 20%.

Take the three month long order as an example, Zheng Jianfan gave the reporter an account: at the end of last year, he received an order of US $1 million to calculate the middle price of the RMB exchange rate at the end of last year, 7.3046 as the quoted price. In March 31st this year, the price of the RMB was settled at 7.019, and the exchange rate loss was 285 thousand and 600 yuan.

The profit margin of textile exports is generally around 5%, the expected profit of this order is 365 thousand and 200 yuan, and the actual profit is less than 80 thousand yuan.

"Under such a trend, enterprises are afraid to take longer orders and larger orders, resulting in unstable production."