Exchange Rate Floating Promotes Shoe Enterprises To Open Wider To The Outside World

In June 19th, the people's Bank of China announced that it would further promote the reform of the RMB exchange rate formation mechanism and enhance the RMB exchange rate flexibility; in June 20th, the central bank official website published the "answering reporters' questions", emphasizing that the exchange rate reform aims to steadily improve the exchange rate formation mechanism, and "the RMB exchange rate will not be reassessed once and for all."

Exchange rate floating to promote industrial upgrading and opening up to the outside world

ICBC's 4.28+0.112.64% level offers momentum and pressure.

The central bank has expressed optimism that China's economic marketization has reached a high level, and that more enterprises already have the flexibility and ability to actively adjust and respond to market changes.

"Under the pattern of world trade, our foreign oriented enterprises have formed an irreversible trend of growth."

Jiang Yaoping, Vice Minister of the Ministry of Commerce, held similar judgments.

In the first half of this year, the Ministry of Commerce, the Ministry of industry and commerce, the Ministry of development and reform, and the Ministry of finance, in the name of industrial upgrading, carried out stress tests on many Pearl River Delta cities such as Dongguan, Foshan and Shenzhen, and the linkage between exchange rate and trade became the focus of the survey.

"Orders in 2010 have been revived."

Zhang Huarong, chairman of the world's largest female shoe manufacturer and Dongguan Huajian group, told an interview with our reporter that international orders have increased rapidly this year, and the RMB appreciation is expected at the beginning of the year. The overseas orders are returned in the middle of the year. "China's production and consumption can not be replaced, and the opportunity brought by the reform will be greater than the challenge in the PRD."

Differentiation of "China scale"

Since last year, the ratio of China's current account surplus to GDP has been decreasing, and the balance of payments is approaching to equilibrium. However, under the background of the financial crisis, China's dominance in the surplus market has led to a rebound in the overseas market.

In March this year, the United States bipartisan joint "2010 currency exchange rate supervision reform law draft", of which "exchange rate deviation standard" specifically for the renminbi.

According to this index, once the US side finds that the value of the RMB is low and the difference is calculated, the same amount of countervailing duty can be imposed on the imported products from China as a whole.

"No appreciation will increase taxes", the sharpness of the means.

The movement of the European Union is also small.

This year, driven by the European Union, more than 30 countries, including Peru, Korea, Canada, Brazil and Argentina, have made anti-dumping decisions on China's footwear industry at the same time, forming the trend of "global encirclement and suppression".

In Dongguan alone, its footwear industry occupies 42.7% of the total export volume of Chinese shoes, and 2 million of the workforce and 1 billion 500 million pairs of shoes are faced with difficult pformation pressure.

"In essence, this is a drastic change in the pattern of international trade and is no longer a question of" fair market ".

Wu Zhenchang, the chairman of the European Union's anti dumping alliance with Chinese footwear products and the chairman of Guangzhou Chuangxin footwear industry, said that as many as 1000 Chinese leather shoes export enterprises, most of them are private enterprises or foreign-funded enterprises, are the most marketable part of China's foreign trade, and the EU has been suppressed by the "non market economy standard", meaning is no longer at the legal level.

"We have always said that Chinese shoes and European shoes are complementary to the market."

Wu Zhenchang recalled that they provided sufficient evidence to the European Court of justice that China's leather shoes sold to Europe were mostly medium and low grade, which did not conflict with the European high-grade leather shoes products, but the other side threw out the "China scale" theory.

"The first time I heard it, I was impressed."

Wu Zhenchang said.

China's unique fast and efficient mass production mode can not be duplicated in the world, and production and marketing will reach a certain scale, and the upstream and downstream will become interdependent.

Especially in the foundry industry, China made and European and American brands have been linked to each other.

"European and American brands are highly dependent on us."

Wang Zhentao, chairman of AOKANG group, also took part in the anti-dumping lawsuit against the European Union. After collecting anti-dumping duties, GEOX and other important customers in Italy even took the initiative to propose 16.5% anti-dumping duties.

The bargaining space of Chinese commodities in the international market seems larger than expected.

The "new trade theory" put forward by Krugman, the winner of Nobel economics, is based on the international trade reality of "China scale".

Krugman's view is that even without comparative advantage, economies of scale themselves can be the cause of trade.

China's intra industry trade under low technology conditions makes specialization and mass production possible, resulting in lower prices and greater degree of commodity diversification, thus affecting international division of labor and trade, and in turn, capturing the dominant power of high-tech countries.

Based on this point, Krugman urged China to launch a currency war or trade war and try to reverse the "Chinese scale" market advantage by the state.

The way of industrial upgrading

Zhang Huarong said that the market advantage and wealth advantage gained by "China scale" is indeed conducive to upgrading and pformation of enterprises, and the way of pformation is not necessarily technological research and development, it can be the construction of R & D channels.

In fact, the "three production oriented" is a major goal of the exchange rate reform.

In accordance with the central bank's "answering reporters' questions, exchange rate fluctuations will push exports from simple processing to deep processing and finishing, elongate production chains, refine the division of labor, optimize the allocation of resources between the trade sector and non tradable sectors, and promote the shift of the employment force to the service sector.

Zhang Huarong has long planned to build independent research and development and independent brand, successively invested 100 million yuan of funds, but the independent brand shipment volume is less than 2% of the total output of the company.

He concluded that behind the brand technology is a strong market accumulation, so he changed his strategy. According to the strategy of Wang Yang, Secretary of the Guangdong provincial Party committee, "running factories as the market" strategy, the world shoe industry concentrated Dongguan thick street to build the world footwear industry Asia headquarters base, which integrates the global shoe production base, procurement center, R & D center, information center and price center. It gathered more than 5000 staff from the United States, Britain, France, Italy, Brazil and other countries engaged in footwear R & D and trade.

At present, the Ministry of Commerce has included the project in key support projects.

Dongguan also timely launched the "implementation of opinions on promoting the development of creative industrial parks", according to local conditions, combined with the renovation of old industrial parks, chose 2-3 creative industrial parks with certain industrial agglomeration basis, and built demonstration parks.

"With the scale foundation, there is industrial integration strength, and the technological superiority of Europe and the United States is not terrible."

Zhang Huarong said.

However, in his view, under the situation of scale and molding, there are two concerns about China's manufacturing.

One concern is the recognition of labour intensive industries.

Zhang Huarong said that labor intensive as a standard of elimination is very dangerous. This exchange reform is a shock to such industries, especially in the first half of the enterprises, such as textile and garment industry, more than 80% of raw materials are domestic procurement, but to export, and the impact of foreign exchange reform on such industries is enormous.

Under such circumstances, if the state does not support, enterprises will be forced to reduce costs by various means, and there may be major distortions.

Another worry Zhang Huarong mentioned is the divergence of exchange rate interest rates.

Zhang Huarong said that he was most worried about the appreciation of the renminbi and domestic depreciation. As a result, the profit of the low-end manufacturing industry was getting thinner and the technology upgrading was difficult. It would lead to a large amount of capital entering the stock market and the property market to find opportunities, or would lead to the pfer of capital in the manufacturing industry.

It is good to invest hundreds of millions of factories, create tens of thousands of people, and get 5%-8% profits. Investment in real estate and stock returns are much higher.

"I am very confused now."

Zhang Huarong said.