Textile Export Enterprises Cope With RMB Appreciation

According to the industry, it is estimated that up to 9 of the enterprises will be

It is understood that since the reform of the RMB exchange rate formation mechanism in July 2005, the renminbi has been appreciating slightly.

In April 10, 2008, the central parity of RMB against the US dollar broke 7, and entered the "6 era".

Since the beginning of this year, the central parity of RMB against the US dollar has been running in the range of 6.826 to 6.828.

In June 22nd, when the central bank resumed the second trading day after the reform, the central parity of RMB against the US dollar was 6.7980, breaking the 6.80 pass.

Affected by the appreciation of the renminbi, such as household electrical appliances, electricians, automobiles, steel and textiles, and other labor intensive industries.

As for the textile and garment industry with the largest impact, the industry has estimated that up to 9 of the enterprises will have a significant impact once the RMB appreciates.

Zhou Shijian, a senior researcher at the Sino US Relations Research Center at Tsinghua University, estimates that at least 25 million of the employment crisis in the textile and garment industry alone does not include companies other than the scale and those outside the textile and garment industry.

"Employment is directly related to social stability, which is the biggest threat to RMB appreciation."

Insiders said that the appreciation of the renminbi would be a trend. The cumulative appreciation of the RMB against the US dollar would be between 4% and 5%.

It is not the right time for export oriented textile enterprises to complain about the appreciation of the renminbi. "The impact of the financial crisis has not yet been restored, and if the RMB appreciates again, if the export price is not raised, there will be no profit."

According to experts estimates, if the RMB appreciation is above 3%, the profit of China's small and medium-sized textile enterprises with export will probably turn to zero.

Export enterprises cope with RMB appreciation

Because China's textile and garment enterprises are dominated by small and medium-sized enterprises, the sensitivity to RMB appreciation is very strong. When profit margins are close to breakeven point, if the RMB appreciation restarts or even accelerates this year, most enterprises will not be able to find it.

The Ministry of finance of Xiangcai securities expects that the appreciation of RMB will be between 3%-5% this year, and this increase will be the upper limit for most enterprises.

However, the counterpart chamber of several labor-intensive products roughly estimated that the net profit margin of the industry will drop by 1 percentage points every 1 percentage points, while the average net profit of these industries is only 3%-5%.

The appreciation of the RMB will undoubtedly weaken the competitiveness of the export enterprises in the international market.

Many export enterprises have taken a number of measures to digest the pressure.

In recent years, most textile enterprises have continuously improved technology, energy conservation and consumption reduction, implemented automatic production and reduced labor costs to digest the impact of RMB appreciation.

The cost of products has been hard to reduce.

Some executives complain that if the RMB has appreciated again and again, enterprises will have to raise their quotations, which will inevitably lead to the loss of orders from some new customers.

"At present, the increase in Renminbi is still within our tolerance, but the pressure of operation has been very large."

The chairman of Zhejiang Sai Feng shoe industry Co., Ltd., said he had learned before the rumor of RMB appreciation that many measures had been taken by the company.

According to introducing, as early as 2004, the company tried to change the business mode, gradually reduce the share of export wholesale, and establish cooperative relationship with foreign chain stores.

"Chain stores, as the terminal of the market, are relatively low in price sensitivity, which is conducive to the stability of corporate profits."

You Kelong said.

In the same year, the enterprise made adjustments to the development strategy, and began to prepare for the pition to the domestic market and tap new profit points while consolidating the international market.

Data show that in February 2010, China's textile and garment exports totaled 12 billion 638 million US dollars, which has been increasing for the three consecutive months, up 89.34%.

In terms of classification, textile exports rose by 78.19%, and clothing exports rose by 96.29% over the same period.

In the 1-2 months, the export volume of textiles and clothing increased by 39.42% and 23.71% respectively.

Under the environment of demand in Europe and America, production orders of domestic export enterprises are gradually increasing.

At present, although there are second risks in the European and American economies, the employment rate index has stabilized, and there are signs of improvement.

With the improvement of employment rate, consumer demand will gradually pick up, especially after more than a year of clothing consumption atrophy, clothing demand will show a greater degree of rigid demand pull.

Therefore, the volume of orders for domestic textile and garment export enterprises will not decrease in the same period.

Experts pointed out that in the context of weakening RMB appreciation and price advantage, for export enterprises, we should speed up pformation and upgrading, increase investment in technological pformation, speed up product upgrading and upgrading, improve product quality and added value, enhance bargaining power in the international market, enhance the international competitiveness of products, and make up for the impact of RMB appreciation.

He said that if conditions permit, it is best to adopt RMB settlement to avoid exchange rate risk.