RMB To The Euro Exchange Rate Breaking 10 Textile Exports Difficult To Defend The Final Position

The soaring value of the RMB against the US dollar has made the EU a "safe haven" for Chinese textile and garment exporters.

However, this "final position" is also in danger of being left behind.

In September 2nd, the central parity of the RMB against the euro exchange rate broke through the 10 to 1 barrier for the first time, causing great concern in the domestic textile industry.

Yesterday, Gao Yong, vice president of the China Textile Industry Association, told the media that the China Textile Industry Association is paying close attention to the appreciation of the Yuan's exchange rate with the euro, and reminds exporters to take relevant measures to avoid exchange rate risks.

The European Union is currently China's largest export market for textile and clothing.

Over the past two years, the renminbi has continued to depreciate against the euro.

However, with the rising trade surplus between China and Europe and the weakening of the US dollar, the EU's attitude towards exchange rate has become increasingly tough since 2008.

In April and May this year, the yuan began to appreciate against the euro, and even exceeded the exchange rate against the US dollar.

In September 2nd, 1 euros to 9.9667 yuan, the yuan to the euro exchange rate hit a new high.

"For most textile exporting enterprises, the cost of raw materials and labor is paid in Renminbi."

Wang Qian, editor in chief of the first textile network, said yesterday that the depreciation of the US dollar and the euro has undoubtedly been a great challenge for domestic exporters to maintain a reasonable profit margin.

In fact, as early as in the past few months, the sensitivity of the fragile Chinese textile and garment industry to the exchange rate has been confirmed by data.

Statistics show that this year, China's textile and apparel orders for the three major traditional markets in the United States, Japan and Hongkong have been seriously damaged.

In the first 7 months of this year, the growth rate of China's textile and garment exports increased by only 5.21%, a 5.53 percentage point drop compared with the same period last year.

Among them, the US and Hongkong declined most significantly, shrinking by 8.12% and 20.41% respectively. In another important export market, Japan's export volume grew by only 0.18%.

Insiders generally believe that the appreciation of the renminbi will further stimulate the structural adjustment of the industry, but for small and medium-sized export enterprises struggling at the critical point of profit and loss, there is little room to deal with.

"In the second half of the year, the possibility of RMB changing the trend of continued appreciation is small."

Industry analyst Dai Ling said that the textile industry will remain in a painful period of adjustment in the second half of the year as exports are expected to decline further.