Call For &Nbsp; China'S Export Enterprises Face Risks Of Reduced Profits.

The house is leaking for a rainy night.

International famous credit in May 18th Insurance And the credit management agency, CAS, predicted that China's GDP will grow by 10% this year and the RMB's appreciation will be 3% to 5%. The chief economist of Goldman Sachs also said that the Chinese government was about to allow the renminbi to appreciate by as much as 5%. Subsequently, Societe Generale of France also predicted in its recent research that the value of the renminbi would rise by 5-10% in April or May. Compared with the Greek debt crisis, the "black swan", the recent appreciation of the renminbi is expected to be more like the "white swan" that everyone expected.

Economists also give different views on the prediction of the time window for RMB appreciation. Standard Chartered economists believe that China should take action before the Sino US Strategic Economic Dialogue in from May 24th to 25th. Wang Tao, chief economist of UBS Securities, put the time window in the second quarter, reaching 6.4 to 6.5:1 at the end of the year. Wang Qing predicted that the yuan will rise by 2%-3% in the summer or early three quarter.

"The appreciation of the renminbi will also have a big impact on the domestic manufacturing industry, especially in China's traditional manufacturing industry." Soochow Securities pointed out in a recent research report.

The report said that on the one hand, traditional industries such as household appliances, machinery and electricity, general machinery and other traditional industries will be hit hard. These industries are the focus of domestic enterprises' export, but most of their profit margins are relatively low. Once RMB appreciation, the prices of these industries will increase in disguise and profit margins may be affected. On the other hand, labor-intensive industries represented by toys, electronics, textiles, clothing and so on will have greater pressure, especially small and medium-sized textile enterprises, and the sensitivity to RMB appreciation is very strong.

According to the rough estimate of the chamber of Commerce, RMB The net profit of the textile industry will decrease by 1% if the value is increased by 1%, and the average net profit of the industry is only about 3%. If the appreciation of the RMB is confirmed, the textile and garment industry will have a significant impact of 90%.

"When the house leaks on a rainy night, the boat is late." If the RMB appreciation against the US dollar is only expected now, the real depreciation of the euro in the near future will make the European exporters accustomed to fixing the euro exchange rate begin to feel "sad" before. In May 19th, the euro fell to 1.2142 against the US dollar and hit a new low of 4 years. The euro continued to plunge not only against the US dollar exchange rate, but also on the RMB exchange rate since May 5th, once again saying goodbye to the word "9" and returning to the "8" era. Since May, the euro has depreciated 5.6% against the RMB exchange rate in just a half month.

To make matters worse, the world's major financial institutions are still looking at the future of the euro, which means that the euro will also fall against the renminbi.

The "exchange rate war" has started, and China's export enterprises are facing risks of reducing profits.

Whether it is the expectation of the appreciation of the RMB against the US dollar or the reality of the depreciation of the euro, it has once again proved that the "exchange rate war" has become the death and death of Chinese export enterprises.

"What we are more worried about is whether the future economy of the euro area will be affected and whether our future orders can be full." The owner of a shoemaking business in Xiamen, who has European export business, said.

Relative to the diminish profits faced by small and medium-sized export enterprises, large enterprises with export business will face greater risks.

One side of the risk comes from the prediction of the export market in the future. Huo Jianguo, President of the Ministry of Commerce, also said that the impact of the European debt crisis on China's foreign trade will appear in 5 and June, and the growth rate of China's exports to Europe may decline by 6%-7%.

At the same time, "many large companies, because they are self exporting, are generally priced once a year, and prices have been basically locked at the beginning of the year. Moreover, buyers in the US and Europe have relatively large orders at the beginning of the year, so the aim is to lock prices first, and after the appreciation of the currency, all the risks are spanferred to Chinese exporters. So for large enterprises, the longer the delivery contract, the larger the order, the greater the loss. One industry insider said.

How to fight the exchange rate war?

How does "exchange rate war" play? Many enterprises have already begun to use bank financial products to pass on the rising cost of RMB appreciation, such as foreign exchange hedging tools such as long term foreign exchange and trade financing. In addition, increasing the price of export products and increasing the proportion of domestic sales has also become a very important choice for many enterprises in a very special period.

The above methods become the most common choice for most enterprises. CSCL also said recently that in view of the trend of continued appreciation of RMB, in order to ensure that the company has sufficient liquidity in 2010 and even longer, it will continue to reduce Renminbi loans, increase foreign exchange liabilities and reasonably avoid exchange rate risks.

However, for large enterprises, especially large enterprises with relatively large capital, industry experts say that in addition to traditional measures to avoid exchange rate risks, strengthening capital management will be one of the important tactics for the large enterprises to launch the "exchange rate war". Under the influence of the current exchange rate, the gross profit margin of enterprises will be reduced. If we can speed up capital turnover, the return on capital can be several times higher than that of rigid sales profits.

"Most businesses avoid exchange rate The loss and massive accumulation of foreign currency ignores the value of capital flows. Fundamentally speaking, in the current situation, it is difficult to simply improve the profits of sales factors. From our observation, there is still a lot of room for enterprises to improve the efficiency of capital use. Enterprises can consider the profit margins raised by these non sales factors. Jie Hongbo, an expert on the comprehensive risk management and foreign exchange risk management research team of the SASAC, said: "through strict capital plan, quota management and authorization, approval, access control system to ensure the orderly operation of funds. More importantly, at the time when the exchange rate risk is prominent, we should effectively combine interest rate, exchange rate, investment and financing products, and changes in the financial and derivatives markets, and intelligently analyze and formulate corporate financial plans, calculate the cost of all kinds of funds, help companies arrange investment and financing structure, and effectively raise capital returns through effective capital management.

Yi Xianrong, a researcher at the Financial Research Institute of the Chinese Academy of Social Sciences, pointed out: "the way to avoid conversion risk by means of capital management is to correctly predict the appreciation or depreciation of the currencies of subsidiaries. If the currency of the place is expected to appreciate, the assets of the local currency will be increased to reduce the liabilities of the area. If the subsidiary is in a strong currency country, it should reduce the liabilities held by the currency. If a subsidiary is located in a weak currency country, the assets held in that currency should be reduced. "