How To Deal With The Continued Appreciation Of RMB?

In December 20th, the central parity of RMB against the US dollar was 7.3649, an increase of 6.01% over the beginning of the year.

Although export enterprises are under tremendous pressure, overall, the export volume of many enterprises will not rise or fall.

In the process of RMB appreciation, what measures should the company take?

RMB appreciation has tested the bearing capacity of export enterprises. Since 2007, the RMB exchange rate has been rising to a new high, which has brought enormous pressure and challenges to many foreign trade and export enterprises in China.

The continued appreciation of the renminbi has led the labour intensive enterprises to bear the brunt.

He Yuling, chairman of Guangdong Zhongjie shoe industry Limited by Share Ltd, said: "as a labor-intensive industry, profits are very limited, only 2% to 3%.

Now the appreciation of the renminbi and the rising price of raw materials have increased the production cost by 3% to 4%, coupled with the increase in labor costs, if the export price can not be raised, the enterprises may not survive.

Over the past two years, soaring prices of raw materials, the prevalence of international trade protectionism and the appreciation of the renminbi have almost appeared simultaneously. Ceng Heping, vice president of Galanz air conditioner, one of China's largest household appliance manufacturers, said: "it is not excessive to describe the pressure faced by enterprises by" unprecedented ".

Ceng Heping said that the rise of raw materials in 2007 brought great pressure to the air conditioning export market, coupled with the decline in the tax rebate rate and the continued appreciation of RMB, and the production cost of enterprises increased by at least 30% to 40%.

Professor Ding Li of Guangdong Academy of Social Sciences believes that in recent years, China's export enterprises are facing many problems, such as rising prices of raw materials, trade barriers, levying export duties and so on.

For many Chinese exporters with low profit margins, the appreciation of the renminbi has brought unprecedented pressure.

Ding Li said that the impact of RMB appreciation on the coastal areas is much greater than that of the mainland, especially those labor-intensive enterprises that produce low value-added products, such as textile and clothing, household appliances and other export enterprises. The impact and impact of RMB appreciation is even greater.

Experts pointed out that although different regions and sizes of export enterprises are affected by different degrees, but in general, the ability of export enterprises to resist appreciation is beyond expectations.

Statistics show that in the first 10 months of this year, China's trade surplus reached US $212 billion 360 million, an increase of nearly 60% over the same period last year, indicating that the overall export competitiveness of enterprises has not declined significantly.

The reason why export volume does not fall and rise is that, according to Cao manager of the Export Department of the Sha Sha group, from the first half of 2006, the export growth rate of the group has remained between 15% and 30%.

How to offset the adverse effects brought by the appreciation of the renminbi, the key word for the solution is "innovation".

Cao told reporters that with the constant changes in consumer attitudes, the group has paid more and more attention to the research and development of new products, especially the innovation of raw materials.

The group pays attention to "tap the potential from the market and make efforts in innovation", aiming at designing different products for different consumers, and launching four hundred or five hundred new brands every month.

Xiong Hong, general manager of the shipbuilding division of Guangdong machinery import and export Limited by Share Ltd, said that the appreciation of the renminbi will definitely have an impact on the enterprises, but it has enhanced our ability, and the innovation and competition consciousness of the enterprises has been stronger.

Compared with the past, the current products are more beautiful and more responsive to the needs of customers. Therefore, exports have not declined, but the scale is bigger every year, increasing at a speed of 5% to 10%.

Besides independent innovation, enterprises also enhance their competitiveness through optimizing management.

Ceng Heping, vice president of Galanz group, said that the issue of RMB appreciation and other issues put forward higher requirements for the management and development strategy of enterprises.

Enterprises need to optimize their business processes, strengthen research and development, improve their management level in an all-round way, and realize the popularization of scientific management technology in practice.

A good opportunity to improve our export competitiveness in the long run is predicted. Under the background of China's high foreign exchange reserves and high foreign trade surplus, the trend of continued appreciation of RMB will be difficult to change in the future.

Some export enterprises believe that the appreciation of RMB has brought some challenges to enterprises in the past two years, but in a strict sense, it will help improve the economic structure, eliminate low-level and disadvantaged enterprises and enhance the export level.

Dong Xiaolin, vice president of Guangdong University of Foreign Studies, said that facing the pressure of RMB appreciation, it is very important for enterprises to adjust the level of export trade.

Enterprises should reduce processing trade, increase the proportion of general trade and gain more profits.

This means that enterprises should accelerate the development of both ends and produce more distinctive products.

The more distinctive products, the less comparable in the international market, the higher the competitiveness.

At the same time, enterprises should establish a more perfect distribution channel, go directly to the consumer terminals, and respond more quickly and gain greater benefits on the basis of a better understanding of the market.

Professor Ding Li of Guangdong Academy of Social Sciences said that in the long run, facing the pressure of RMB appreciation, enterprises should reduce costs by strengthening management and increasing efficiency, and take the mode of independent innovation.

For China, appreciation can be used as an opportunity to improve the trade structure, enhance export competitiveness, enhance innovation capability in the dominant areas, and encourage the development of new and high technology industries.