2 / 3 The Actual Profit Margin Of Textile Enterprises Is Only 0.62%.

MACY, S, the top selling clothing retailer in the United States, produced a lot of clothing from India, Vietnam and Bangladesh this year, which surprised Zhou Shijian, executive director of the China International Trade Association. Two years ago, the clothes sold here were mostly labeled "MADE IN CHINA".

Zhou Shijian just returned from the US inspection in mid July. "This is mainly to understand the future trend of the RMB exchange rate against the US dollar and the policy trend after the expiration of the Sino US textile agreement at the end of this year.

The industry has been worried that after the expiration of the agreement, next year, China's textile exports to the United States will be blowout.

Now it seems to be a bit of a worry. Even the Americans are saying that the appreciation of the renminbi has already closed the Chinese cheap clothes outside the US.

Zhou Shijian told the first financial daily that cheap and fine is still the mainstream consumer standard in the United States. Under the influence of the subprime crisis, this phenomenon is particularly obvious.

Now the major stores in the United States are already on sale, and 6~10 dollars and one piece of clothing is everywhere.

In the 1~6 month of this year, influenced by the RMB appreciation and the US subprime mortgage crisis, China (mainland) had some changes in the import and export of its major trading partners. The growth rate of trade with the United States and trade with Hongkong (a considerable portion of goods re exports to the United States) slowed down significantly. The increase in exports to the United States dropped by 4.8 percentage points, and the growth rate in Hongkong dropped by 15.5 percentage points.

The appreciation of the renminbi has begun to show its destructive effect on traditional clothing export commodities such as China.

In the first half of this year, the export of clothing and accessories was 49 billion 960 million US dollars, and the export volume increased by only 3.4%, an increase of 18 percentage points over the same period last year. It also lagged far behind the 21.9% growth of China's foreign trade export volume in the first half of this year.

Although the export of textile yarns, fabrics and products reached US $25 billion 220 million, an increase of 9.8%, Cao Xinyu, vice president of the China Textiles Import and Export Chamber of Commerce, pointed out that this is just a representation, mainly due to the rapid development of the textile and garment industry in the surrounding countries and regions, and the increasing demand for raw materials and semi-finished products in China. Therefore, this means that the competition of China's textile and garment industry will become increasingly fierce.

According to the data of the textile and apparel Office of the US Department of Commerce, the number of textiles and clothing imported from the United States decreased by 1.68% and 7.74% compared to the same period in the first quarter of this year. The export momentum of Vietnam to the United States remained strong, the number of textiles and clothing exports to the United States increased by 29.69% and 33.06% respectively, and the number of textiles and clothing exported to India by the United States increased by 0.54% and 1.72%, respectively.

Although the market share of Chinese textiles and clothing is still in the first place in the United States, with the rapid increase in the cost of "made in China", some orders have been pferred from China to other Asian countries.

The clothing that the terminal sells for only a few dollars, Chinese enterprises can make little profit from it.

Many garment exporters say that the profits of a garment are usually only tens of cents, and some are even negative.

Zhong Haosen, assistant general manager of the Guangdong textiles import and export Limited by Share Ltd and general manager of the business department of Garry, said that since the RMB appreciation accelerated this year, the average profit of each export garment has shrunk by 50 cents.

In Dalang, Dongguan, the largest export base of woollen goods, a processing export sweater could earn RMB 30 yuan in the early 90s of last century. At present, there is only about 1 yuan profit, and some orders even lose money.

According to the statistics of China Textile Industry Association, under the combined influence of various factors, the actual profit margin of 2/3 in the whole industry is only 0.62%.

Improving product prices is one of the most commonly used methods in enterprises.

According to our recent survey, 28.67% of the 170 respondents said they would raise the prices of export products.

But in the global economic downturn, the cost of rising is not so easily passed on to overseas buyers.

Some companies say that this year WAL-MART's big buyers are more vicious than before, while some small and medium buyers are affected by the subprime crisis, reducing the number of goods purchased in China.

As a result, the increase in prices may lead to the loss of orders, and no increase in prices may lead to losses. Many labor-intensive export enterprises have been caught in a dilemma.

"Because our products belong to high-tech products, some of them can have a gross margin of up to 100%.

Therefore, the current appreciation of the renminbi has little impact on us.

Mr. Chen is an overseas business manager of a high-tech product company in Guangzhou. He told our reporter that the audio and video products developed by his company have a good market in Africa. This year, millions of dollars were placed in Africa.

Compared with traditional labor-intensive products such as clothing, shoes and toys, China's electromechanical and high-tech products have a higher overall profit, especially those with independent research and development of high value-added products, and the ability to resist exchange rate risks is stronger.

In the first half of this year, China's export of mechanical and electrical products was 388 billion 780 million US dollars, an increase of 25.4%, an increase of 1.6 percentage points over the same period last year, accounting for 58.3% of the total export volume of the same period.

The export of high-tech products was 196 billion 170 million US dollars, an increase of 21.8%.

However, there are also worries behind this.

Zhou Shijian believes that if the RMB continues to appreciate, the mechanical and electrical industry will also be affected. Before there is a certain profit margin, the two sides still have room for profit, but once approaching the border line, there may be problems similar to those encountered in labor-intensive industries.

In a report, China Chamber of Commerce for import and export of mechanical and electrical products made a detailed analysis of the data in the first four months of this year, and found that the export of US household electrical appliances has declined in the first four months. Especially in February, the number of exports to the United States dropped by 21.2%, and the amount of exports decreased by 15.7%. Although exports to Europe still maintained two digit growth, from the perspective of export product structure, we made a great contribution to household appliances, while the small household electrical appliances showed a marked decline.

The report also points out that although the home appliance market in Africa, Latin America and ASEAN has increased in recent years, its scale and profit can not be compared with that of the European and American markets.

"The most urgent task is to stabilize the foreign trade policy, especially the exchange rate policy, and the appreciation of the Renminbi should be moderated moderately.

Transformation and upgrading is necessary, but we need to push forward smoothly. In the process, the government should invest a lot in supporting R & D and innovation.

At the same time, in the process of adjustment of export structure, we should focus on market orientation, not only emphasize high-end technology, but also prevent the labor intensive traditional export product market from shrinking once it will cause a large number of enterprises to go bankrupt and the corresponding unemployment problem.

Zhou Shijian suggested this.

Before the Ministry of Commerce released the spring China foreign trade situation report in 2008, Li Yu, vice president of the Research Institute of the Ministry of Commerce, told the first financial daily: "since last year, some policies of the Ministry of commerce are helping China's foreign trade in pformation, and pformation has to pay a price. Some enterprises in the Pearl River Delta and Yangtze River Delta region have indeed encountered problems, but this is an inevitable process."

From the present point of view, the export of mechanical and electrical products has maintained a relatively fast growth in contrast to textiles, clothing and footwear.

Li Yushi explained to our reporter that mechanical and electrical products are an important force to boost China's exports this year. In the current world economic instability, the situation in the developing countries is not bad. In general, China's electromechanical products are relatively low grade and have a good market in developing countries. This also reflects that China's exports to ASEAN and other developing regions this year are still growing at a high speed.