The Impact Of RMB Appreciation On Textile Industry

Because

First, from the chemical fiber industry itself, it directly affects exports; two, from the downstream enterprises of the textile and chemical enterprises downstream of yarn, fabric and clothing exports to Europe and the United States, because these enterprises are panic about the recent rapid appreciation of the renminbi, they will only receive small orders or stop completely, making the demand for chemical fiber products down sharply, and the chemical fiber enterprises will naturally be indirectly affected.

If enterprises use the method of raising prices to shift the pressure of RMB appreciation, they may backfire.

Because the export products of chemical fiber industry are mainly consumer goods and are not monopolized by oil and other industries, the price increase of enterprises is easy to be forced by the buyers. Even if they can raise prices slightly, there are not many foreign customers who can accept the raise price.

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In general, the increase of RMB within 2.5%, the impact on the chemical fiber enterprises is not very big, at least in the year will not have too much impact.

It is generally believed that if the appreciation of RMB exceeds 10% in one year, the impact on the chemical fiber industry will be very different.

Although the fluctuation of the RMB exchange rate is not large, the time is short and the frequency is fast.

As for the appreciation rate of the late exchange rate, it is hard to say at present.

This is not yet related to the expansion of the capacity of the chemical fiber industry, the soaring of upstream raw materials (cotton), the factors affecting emission reduction and power rationing, the adjustment of interest rate and reserve ratio on domestic policies, the inflation and natural disasters on the macro level, and the comprehensive factors of protectionism and Geopolitics in foreign trade.

1, profit impact

China is currently the leader of the world's textile giants. Under the influence of the international financial crisis, not only the export has declined, but also the pressure of RMB exchange rate appreciation has made the traditional export industry difficult.

In the first half of the year, a senior industry veteran admitted that China's textile industry, generally speaking, the current product profit is around 5%, which is still relatively good, most of which can be controlled at 3%.

If RMB appreciation is 1% now, nearly 20% of the enterprises have reached the extreme point of the profit balance point.

If the renminbi appreciates by 5%, he estimates that more than half of the enterprises are facing bankruptcy.

Second, the appreciation of the renminbi has weakened the export competitiveness of textile products.

In the case of RMB appreciation, the relative price of China's textile products in the international market has increased, and it has become more difficult to sign the bill with foreign merchants. The export sales revenue has declined, leading to some export enterprises turning to domestic sales, thus aggravating the competition of domestic textile enterprises.

At the same time, the rise in prices has also led to the loss of orders.

At present, many foreign orders have been sent to rival countries such as Vietnam, Kampuchea and India.

2, export impact

In 2009, China's textile and apparel exports totaled 171 billion 332 million US dollars, accounting for 14.26% of the total export volume of our country. The textile industry, as an obvious competitive industry with international competitive advantages, has always been an important part of China's exports of goods. The stability of the RMB exchange rate is particularly important for the growth of textile exports.

In the first half of this year, the Ministry of Commerce made a stress test of RMB appreciation.

The results show that the RMB appreciation will be 1 percentage points while the cost and price of other production factors remain unchanged, and the profits of textile and garment export enterprises will also be reduced by 1%.

Exchange rate losses are rigid losses, and can not be digested through consultation with customers and improvement of supply chain management.

3, employment impact

Last year, China's total export textile industry was nearly $18 billion.

In general, thousands of workers may lose their jobs at a reduced cost of one hundred million dollars. If the renminbi continues to appreciate, the industry's ability to bear may be lower and lower.

Textile and clothing is a labor-intensive industry with at least 25 million jobs and 80% of them are migrant workers.

This does not include other enterprises under the scale, as well as enterprises outside the textile and garment industry.

At the same time, the textile industry digested nearly 10 million tons of cotton, wool, linen and silk natural fibers in the year of agriculture, benefiting 100 million farmers.

The problem of employment is directly related to social stability, which is the biggest threat to the textile industry caused by the appreciation of RMB.

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4. Forecast and Prospect

The rapid appreciation of the renminbi is like throwing an atomic bomb into the industry. Its influence is long, and the scope of its lethality will be far-reaching.

China's current exchange rate trend is more or less the shadow of Japan, Germany, Japan and Germany when the world economic crisis broke out in 1929. During the 1920-1929 years of the great depression, European and American countries dumped commodities to Japan in the form of currency devaluation. At that time, the Japanese yen did not appreciate, which has led to a large number of domestic commodities stagflation and directly destroyed the productivity of their own country. I think the Japanese example is worthy of China's aftertaste.

Personally, the exchange rate of any country should be interactive.

Back to the present, with the deepening of the RMB exchange rate reform and the impact of political pressure and financial game by the European and American countries, the fourth quarter RMB exchange rate will gradually increase in stalemate and repeated trials. By the end of the year, it is very likely to touch the 6.55-6.60 pass, and the total annual increase will exceed 3%.

People in the industry should have a mental preparation ahead of schedule.

In short, in the textile industry has just emerged to recover, there are still many difficulties and pressures to deal with the critical period, the state should maintain the RMB exchange rate basically stable, even if it should be appreciated, it should be slow gradual, and give the enterprise a gradual digestion of bad time.

This will help to alleviate various pressures faced by the textile industry, ensure that the real economy will not be seriously affected, and will also maintain the international competitiveness of textile products, consolidate China's share in the international market, stabilize social full employment, and consolidate the economic foundation of the textile industry and even the recovery of the entire national economy.