Service Enterprises Spit Bitter Water: Business Just Improved, Appreciation Difficult To Bear

China and the US have been close to the showdown over the RMB exchange rate issue.

130 US Congressmen of both parties have jointly written to the Obama administration, demanding sanctions against China to manipulate the RMB exchange rate. Then Senator Schumer threw out the latest version of the Schumer bill, calling on the Ministry of finance to list the list of countries with fundamental misconduct in exchange rate and take a series of punitive measures against them.

In April 15th, the US Treasury will announce whether China will be listed as a currency manipulator in the published report, and the issue of RMB exchange rate will be pushed to the top of the storm.

The Chinese government is tit for tat.

Chen Deming, premier of the State Council, yesterday appealed to the responsible country not to engage in trade wars and currency wars after the spokesman of the Ministry of foreign affairs and Minister of Commerce Wen Jiabao made a strong tone.

Facing the showdown moment, Sino US negotiations will race against time.

Why has the United States been so aggressive about the RMB exchange rate recently?

Analysts generally believe that this is the United States to do everything possible to seek an important step in economic recovery.

Xie Dongming, an analyst with the overseas Chinese Bank of Singapore, admitted that the appreciation of the US dollar is just to boost its exports.

After Obama proposed the strategy of doubling exports, it was destined that the currency war between China and the United States would escalate.

The United States has recently played a huge role in the huge trade deficit between China and the United States. The mainstream economists of the United States represented by Krugman have repeatedly increased the volume of the RMB exchange rate, which undoubtedly helped fuel the escalation of the RMB exchange rate war.

The more pressure the United States is, the stiffer China's waist is.

The Chinese government has repeatedly expressed its strong counterattack to show its position that it can not appreciate because of external pressure.

Economist Lu political commissar said that after the financial crisis, China's economy took the lead in recovery. It shows that China's position is different from the past. At the moment, China is not unable to make concessions in the right circumstances, but the premise is not to sacrifice the core interests.

It has been widely reported that the Ministry of Commerce and the Ministry of industry and Commerce recently carried out the "RMB exchange rate pressure test" for labor-intensive industries, but the Ministry of Commerce has officially denied that it also shows that the renminbi is unlikely to appreciate in the near future.

At the moment, the focus of attention is focused in April 15th – does the US Treasury really classify China as a currency manipulator?

Once the United States really takes this step, the consequent consequences will become more and more serious. Many analysts believe that this will lead to further trade conflicts and even trade wars between China and the United States.

"Once the United States regards China as a currency manipulator, the next step is to impose a tax on exchange rate manipulation."

Xiao Yaofei, deputy director of the international economic and Trade Research Center of Guangdong University of Foreign Studies, said that the United States is unlikely to unilaterally levy, which is undoubtedly equal to launching a trade war. If the United States gets the issue of exchange rate tax to the WTO ruling, it has no precedent and takes a lot of time. During that period, China and the United States may still reach a settlement.

Despite the escalation of the quarrel, China and the US are still fighting against the clock to negotiate.

It is reported that Zijin Mountain Vice Minister of Commerce this week organized a delegation to the United States for consultations.

Some analysts believe that even if China's currency appreciates, it will also take place after June of this year.

Businesses are pouring water: business is just getting better and appreciation is hard to bear.

Faced with the Sino US war of RMB exchange rate, enterprises have already felt it.

The export enterprises of the Pearl River Delta have no exception.

Many businesses say that appreciation is more than 3%, and business is hard to do.

"The external demand has just turned better, and the profit from the external profit is still very low, with a sudden appreciation of more than 3%, and many textile enterprises may not be able to withstand it."

Ling Fangcai, chairman of Guangdong textile import and export Limited by Share Ltd, once appreciated, it is difficult for enterprises to spit out their meager profits and want to raise prices not overnight. Besides, Chinese enterprises' bargaining power is not strong enough.

Some orders will not be answered because they can't earn money. He is worried that customers will be lost.

Li Zhuoming, executive vice president of Guangdong Toy Association, admitted that although exports have been revival, business is still not good enough. Any toy enterprise in Guangdong is worried about RMB appreciation.

Cai Minqiang, chairman of the wedding dress export company, Guangdong Rui Rui group, even said: "in the past few years, a good RMB appreciation 3%-5% has barely been able to bear, but now the business is only slightly better. Last year's inventory has just been digested, but the price is still in 2007 and 2008. Even if the people's currency appreciates 1%, it will also have a headache."