Shift Pressure In The Industrial Chain?

Shanghai development

She believes that the international bargaining power of enterprises will be less affected by the appreciation of the renminbi, or they simply can not feel the pressure of appreciation, or can easily pfer pressure in the industrial chain.

Shenzhen MINDRAY biological medicine for medical devices

As the largest medical device manufacturer in China, MINDRAY's sales revenue has maintained a rapid growth of 40% to 50% in recent years, accounting for more than 50% of its sales revenue.

According to the statistics of the General Administration of customs, MINDRAY accounted for over 60% of the high-end medical equipment exported to China.

In the field of Chinese market monitors, digital black and white ultrasound products, and three classified hematology analyzer products, MINDRAY has seized the first share of the domestic market dominated by foreign giants for many years.

With these achievements, MINDRAY is relying on the strong core competitiveness of enterprises brought by the excellent R & D capability.

Even in the case of an increase in exports, appreciation of the renminbi and rising prices of raw materials, the gross profit margin of products is still rising.

"For us, compared with the pressure of RMB appreciation, what is more important is the development of the market."

Zhang Lirong, manager of Trade Department of Shaanxi saidhi Biotechnology Co., Ltd.

The head of the foreign trade department of several high-tech industries, including Saidy bio, told reporters that because of the high added value of high-tech products, it is not sensitive to the appreciation of the renminbi.

Ma Haiqian, who studied Shanghai Zhenhua Heavy Industries (Group) Limited by Share Ltd, also found that as the leading supplier of the global port machinery industry, Zhenhua heavy industry's quayside bridge products occupy 74% of the world market share and have strong international bargaining power.

In response to the pressure of RMB appreciation, Zhenhua heavy industries can resolve the adverse effects of RMB appreciation through measures such as raising international prices, making foreign exchange in advance, and requiring international customers to use Renminbi to settle accounts.

Low value-added products have weak bargaining power.

On the other hand, some low-end labor intensive industries, such as textiles, toys, etc., because the added value of products is relatively low, the bargaining power of enterprises is relatively weak, unable to pfer the appreciation pressure, and can only digest inside the enterprise.

Ma Haiqian's investigation of some enterprises in Shanghai found that the average profit margin of Shanghai's textile and garment industry is about 4%. If RMB appreciation is 1%, the industry will reduce its sales revenue by 1 billion 40 million. If the revaluation reaches 4%, most enterprises in the industry will face losses.

"The appreciation of a wave of RMB from 2005 to 2007, we almost did not support it." Zhang Peiliang, chairman of Zhejiang Zhuo Yang Home Textile Co., Ltd. confirmed Ma Haiqian's research. "The profit rate of the home textile industry is also at 3%~4%. We can imagine how large the RMB appreciation will affect us. If we don't ask customers to raise the price, the impact of the appreciation of the renminbi will almost offset our profits."

Even more disturbing to Zhang Peiliang is the competition of textile enterprises from neighboring countries.

A lot of American orders have been pferred to India, Pakistan and other countries in batches. Under the circumstances of many choices, domestic textile enterprises and customers have little advantage in negotiating RMB appreciation, because customers can easily hand over orders to lower price areas, and more importantly, there are no quota restrictions in neighboring countries.

Relying on the industrial chain to pfer pressure is not a long-term strategy.

Zhu Mingxia, a professor at the school of international trade and economics of the University of foreign trade and economics, believes that no matter what kind of enterprise is expected to shift the appreciation pressure of RMB in the industrial chain, it is not a long-term strategy.

"More importantly, we should do more internal work, pay attention to R & D and brand building, improve the technological content and added value of products, and enhance the core competitiveness of enterprises, so as to enhance the bargaining chip of enterprises in overseas markets and enhance their ability to resist risks."

At the same time, for enterprises wishing to expand overseas business, RMB appreciation is an advantage.

Zhu Mingxia believes that the stronger the renminbi, the stronger the purchasing power overseas.

Chinese enterprises can seize the favorable opportunity for the renminbi to continuously strengthen and reduce the cost of overseas investment, and to buy technology, annex enterprises and establish marketing channels overseas.

MINDRAY has made such an attempt.

During the financial crisis in 2008, MINDRAY invested $202 million to acquire Datascope, an American medical device manufacturer listed on NASDAQ. This is a bold and decisive overseas acquisition of Chinese enterprises in the context of the appreciation of the renminbi.

After the completion of the acquisition, MINDRAY has become the world's third largest manufacturer of healthcare monitoring equipment.