Liu Shan: The Countermeasures To Stop The Appreciation Of RMB Are Not Enough.

The government and academia all realize that in the background of RMB appreciation, export enterprises will have to undergo painful process in the process of China's economic pformation.

However, some unexpected events made the pformation process even more difficult.

The US sub prime mortgage crisis, oil price inflation, raw material prices continued to rise and labor costs increased. When these factors were not related to the appreciation of the renminbi, everything became worse.

To survive in this round of economic adjustment may be the highest goal of most small and medium-sized export enterprises, especially the private enterprises that produce textiles, clothing, footwear, toys and other consumer goods in Jiangsu and Zhejiang provinces.

The main problems facing private export enterprises are RMB appreciation, rising raw material prices, declining export tax rebate rate, rising labor costs and financing difficulties.

Some scholars have suggested that, in order to survive, SMEs should stop the appreciation of the renminbi.

But I believe that simply stopping the appreciation of the renminbi can not relieve the crisis.

Since processing trade accounts for more than half of the total export volume, the cessation of RMB appreciation will inevitably lead to the increase in the cost of imports of raw materials by such enterprises, thus causing a comprehensive crisis for Chinese export enterprises.

At the same time, if the RMB stops revaluation, it will also increase the import cost of basic industries such as steel and petroleum, increase domestic inflation pressure, and then affect private enterprises.

Therefore, the way to stop the appreciation of the renminbi is not enough. Instead, changing the way of appreciation may be an option.

In fact, the confusion of some private enterprises lies not only in cost but also in the expectation of RMB appreciation.

Because of the slight appreciation of RMB, private enterprises can not make accurate pricing in trade negotiations, resulting in the price of export can not keep up with the speed of appreciation.

In fact, it is more important for foreign trade enterprises to have an accurate expectation of appreciation than to stop the appreciation of the renminbi.

Of course, the government can not turn a blind eye to the difficulties faced by SMEs.

The author believes that the government should adhere to the policy of economic restructuring and help SMEs.

For difficult export enterprises, the government can take two measures.

On the one hand, we should give support to export tax rebates and trade credits so as to help SMEs overcome difficulties.

On the other hand, we should increase the intensity of policy tilt to support the pition from small to medium to internal demand.

For enterprises in pition, the government may wish to implement the policy of reducing income tax for two or three years so that it can survive and develop.