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A Bitter History Of Spinning The "Currency Wars"

2010/7/7 19:07:00 58

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For some time,

RMB

The news of the reform has always been the focus of attention of government officials and the economic community.

The voices of all parties were loud and noisy.

It is like a war about money. There is no smoke, but it is dangerous.

US President Obama has been putting pressure on China to ensure that the latter's exchange rate policy will not win unfair trade advantages for us. The RMB exchange rate reform seems imminent.

In the "war" of RMB exchange reform, textile and garment enterprises will pay a certain price to the battlefield. They may not be penetrated by bullets, but they are really "hurt".

For the domestic textile and garment industry of export oriented industry, because of its high dependence on foreign countries and lack of bargaining power, it is easily affected by the exchange rate of RMB.

RMB appreciation will give the textile and garment industry

Exit

Bring about negative effects.

In the summer of summer, many textile enterprises seem to be "colder". The price of raw materials has risen sharply, labor shortage has been strained, cost has been increased, financing difficulties have been raised, and the appreciation of RMB has increased.

On the one hand, textile enterprises are facing the throes of pformation. On the other hand, the appreciation of the renminbi, the difficulty in increasing domestic cotton production and the further enlargement of supply and demand gap will make the textile enterprises' future development "warm and cold".

RMB

exchange rate

The reform of the formation mechanism has many effects on China's foreign trade enterprises. The rise in labor costs and raw material prices in the short term may make exporters face certain operational pressures. Meanwhile, the debt crisis in the euro area will also affect Chinese enterprises' exports to a certain extent. In the long run, enterprises will continuously enhance their competitiveness through continuous improvement of employment strategies and operational mechanisms, further extend the processing value chain, and provide conditions for such value chain by increasing the overseas marketing service network.

The impact of exchange rate on textile enterprises is mainly reflected in two aspects: first, the direct pricing method, and the rise of the RMB exchange rate will lead to a decline in the income of textile enterprises.

Two, the rising exchange rate will weaken the export competitiveness of textile products, leading to many orders flowing to Southeast Asian countries.

Data estimates that the average net profit margin of the domestic textile and garment industry is only 3%-5%.

The appreciation of the renminbi will not only squeeze the profit margins of export companies which are not so high, but will also affect export demand at the same time.

At the same time, the appreciation of RMB will also urge the textile industry to have the effect of passive structural adjustment. The revaluation will create a forced mechanism for enterprises. If enterprises do not carry out industrial upgrading and structural adjustment, they may be eliminated, and the industry will also reshuffle.

Export-oriented enterprises should carry out structural adjustment to promote the pformation of China's economic structure.

The RMB exchange rate reform has become an irreversible trend, and behind such a reform, textile and garment enterprises should reflect on their next steps. It is particularly important for enterprises to improve their ability to cope with the sudden changes.