Exchange Rate Reform Boosts The Upgrading Of Shoe Enterprises In The Pearl River Delta

On June 19, the People's Bank of China announced that it would further promote the reform of the RMB exchange rate formation mechanism and enhance the flexibility of the RMB exchange rate; On June 20, the official website of the People's Bank of China published "Answers to Journalists' Questions", emphasizing that this exchange rate reform is aimed at steadily promoting and improving the exchange rate formation mechanism, and "the RMB exchange rate will not be subject to one-time revaluation adjustment".

Floating exchange rate to promote industrial upgrading and improve opening up

Industrial and Commercial Bank of China's 4.28+0.112.64% leveling provides impetus and pressure. " With regard to China's economic adaptability, the Central Bank "answered questions from reporters" and expressed optimism that "China's economy has reached a high level of marketization, and more enterprises have the flexibility and ability to actively adjust and respond to market changes".

"Under the pattern of world trade, China's export-oriented enterprises have formed an irreversible growth trend." Jiang Yaoping, vice minister of the Ministry of Commerce, also held a similar judgment. In the first half of this year, the Ministry of Commerce, the Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Finance, in the name of industrial upgrading, frequently conducted stress tests in Dongguan, Foshan, Shenzhen and other Pearl River Delta cities, and the linkage between exchange rates and trade became the focus of research.

"Orders in 2010 have recovered." The world's largest Women's Shoes Zhang Huarong, the manufacturer and chairman of Dongguan Huajian Group, said in an interview with our reporter that since this year, international orders have increased rapidly. At the beginning of the year, the RMB is expected to appreciate. In the middle of the year, there has been a backflow of orders transferred overseas. "China's production and consumption have become irreplaceable. At least in the Pearl River Delta, the opportunities brought by the exchange reform will outweigh the challenges.".

Discrimination of "China's scale"

Since last year, the ratio of China's current account surplus to GDP has gradually declined, and the balance of payments has further approached a balanced state. However, in the context of the financial crisis, China's dominance in the surplus market has triggered a rebound in overseas markets.

In March this year, the two parties of the United States jointly signed the "2010 Monetary Exchange Rate Regulation Reform Act", in which the "exchange rate deviation standard" is specifically for RMB. According to this indicator, once the US side determines that the value of the RMB is low and calculates the difference, it can impose countervailing duties of the same range on the whole of products imported from China. "No appreciation, no tax increase" is unprecedented.

The EU's action is also significant. Since this year, more than 30 countries, including Peru, South Korea, Canada, Brazil and Argentina, have made final anti-dumping determinations against China's shoe industry at the same time under the leadership of the EU, forming a trend of "global encirclement". Dongguan alone accounted for 42.7% of China's total shoe exports, with 2 million employees and 1.5 billion pairs of shoes production capacity, facing difficult transformation pressure.

"Essentially, this is a dramatic change in the pattern of international trade, and it is no longer simply a question of 'market fairness'." Wu Zhenchang, the initiator of the EU Anti dumping Response Alliance for Chinese Shoes, and the chairman of Guangzhou Chuangxin Shoes, said that there are as many as 1000 Chinese leather shoe export enterprises, most of which are private or foreign-funded enterprises, It is the most market-oriented part of China's foreign trade. The EU suppresses it with the "non market economy standard", meaning no longer in the legal sense.

"We have always said that Chinese shoes and European shoes are complementary to each other in the market." Wu Zhenchang recalled that they provided sufficient evidence to the European Court of Justice to prove that most of China's leather shoes sold to Europe are middle and low-end, and do not conflict with European high-end leather shoes, but the other side said "China's model". "The first time I heard it, I was impressed," said Wu Zhenchang.

The fast, efficient and large-scale shipping production mode unique to China cannot be replicated in the world. When the production and marketing reach a certain scale, the upstream and downstream become interdependent. Especially in the OEM industry, Made in China and European and American brands have been connected by blood.

"European and American brands have been highly dependent on us." Wang Zhentao, the chairman of Aokang Group, also participated in the anti-dumping lawsuit against the EU. After the imposition of anti-dumping duties, Italian GEOX and other important customers even took the initiative to bear the 16.5% anti-dumping duty.

The "bargaining space" of Chinese goods in the international market seems to be larger than expected. The "new trade theory" proposed by Krugman, the Nobel laureate in economics, is based on the reality of international trade, namely, "China's scale".

Krugman's view is that even if there is no comparative advantage, economies of scale can themselves be the cause of trade. Intra industry trade under China's low technology conditions makes specialization and mass production possible, which leads to lower prices and greater commodity diversification, thus affecting international division of labor and trade, and in turn seizing the dominance of high-tech countries. Based on this, Krugman strongly advocated to launch an exchange rate war or trade war against China, and tried to use the country to forcefully reverse the market advantage of "China's size".

The way of industrial upgrading

Zhang Huarong said that the market advantages and wealth advantages gained by "China's scale" are indeed conducive to enterprise Upgrading and transformation, the transformation path is not necessarily technology research and development, but can be the construction of research and development channels.

In fact, the "three industry orientation" is a major goal of this exchange rate reform. According to the Central Bank's "answer to the reporter's question", the floating exchange rate will promote the export from simple processing to deep processing and fine processing, lengthen the production chain, refine the division of labor, optimize the allocation of resources between the tradable goods sector and the non tradable goods sector, and promote the transfer of the employment force to the service industry.

Zhang Huarong has planned for independent research and development and construction of independent brands for a long time, and has invested 100 million yuan in succession, but the shipment of independent brands is less than 2% of the company's total output. He came to the conclusion that behind the brand technology is a strong market accumulation. Therefore, he changed his strategy. According to the strategy of Wang Yang, Secretary of the CPC Guangdong Provincial Committee, "it is better to run a factory than a market", he built an Asian headquarters base of the world shoe industry in Houjie, Dongguan, a hub of global shoe enterprises, integrating the global shoe industry production base, procurement center, research and development center, information center and price center, More than 5000 staff from the United States, Britain, France, Italy, Brazil and other countries engaged in shoe industry research and development, trade. At present, the Ministry of Commerce has listed the project as a key support project.

Dongguan also launched the Implementation Opinions on Promoting the Development of Creative Industry Parks in due time. According to local conditions and in combination with the renovation of old industrial parks, it will select 2-3 creative industry parks with certain industrial agglomeration basis to build demonstration parks.

"With the foundation of scale, there is the power of industrial integration. The technological advantages of Europe and the United States are not terrible," said Zhang Huarong. However, in his view, under the situation of scale formation, Made in China still has two worries.

One concern is the perception of labor-intensive industries. Zhang Huarong said that it is very dangerous to regard labor intensity as the elimination standard. This foreign exchange reform has an impact on such industries, especially on both domestic and foreign enterprises. For example, more than 80% of the raw materials in the textile and clothing industry are purchased domestically, but they need to export. The impact of the foreign exchange reform on such industries is huge. In this case, if the state does not support it, enterprises will be forced to reduce costs by various means, which may lead to major distortions.

Another concern mentioned by Zhang Huarong is the deviation of exchange rate and interest rate.

Zhang Huarong said that he was most worried about the appreciation of the RMB abroad and the devaluation of the RMB at home. As a result, the profit of low-end manufacturing industry is getting thinner and thinner, and technology upgrading is difficult, which will inevitably lead to a large number of funds entering the stock market and property market to find opportunities, or "trigger the transfer of funds from manufacturing industry".

It is good to invest hundreds of millions in factories, create tens of thousands of jobs, and get 5% - 8% profit, but the return on investment in real estate and stocks is much higher. "I am very confused now," Zhang Huarong said.