RMB Makes Chengdu Shoe Enterprises' Foreign Trade Business Difficult.

Orders, OEM production and shipping to dealers are the basic form of foreign trade chosen by Chengdu footwear exporters.

Their profits are realized through the export of products into dollars and then converted into Renminbi.

With the substantial appreciation of the renminbi, on the one hand, the price advantage of Chengdu's shoes exports is getting smaller and smaller. On the other hand, the dollar that can be earned back is less and less.

Like Zhou Zhonglin, Deng Ai's "Ai Shen" shoe factory at the helm is now earning less than 1.5 yuan for every pair of shoes produced. In June last year, the factory had a monthly income of less than 30 thousand yuan.

Combined wages, taxes and other factors, the average monthly income fell by 10%.

"Foreign trade is getting worse and worse."

Deng said that in recent months, they have not dared to rush to take orders. Last year 7 - September, the factory signed less than $300 thousand worth of bills.

At the same time, in order to prevent the loss of personnel, they have to pay money to maintain production.

So he had to consider giving up some foreign markets, and the proportion of domestic sales increased from less than 20% to 50% in the past.

At the end of last year, Deng Ai opened a store of his own products in Deyang and Mianyang, with a total investment of 1 million yuan.

But in the face of equally fierce competition in the domestic market, he said it is hard for him to see the future and only to cross the river by feeling the stones.

On the export side, in order to reduce the losses, he has negotiated with clients and made a monthly price adjustment according to the exchange rate changes.

In the face of revaluation, enterprises should do so. "The capital cost and income increase caused by RMB appreciation will change China's economic structure in the long run, reassign industries to different growth rates, and differentiate the performance of enterprises in different industries."

Li Yu, a professor at the school of business administration, Sichuan University, said that the impact of RMB appreciation on export products is self-evident. As the manufacturing industry is also a traditional industry's footwear industry, the challenges it faces are increasing.

Compared with other products, footwear products have a high degree of dependence on foreign products. Enterprises should sign short-term contracts with customers and add relevant provisions of Renminbi appreciation in the contract.

If in the delivery period, if the renminbi appreciates to a certain extent, the price must be readjusted.

In addition, export enterprises can make full use of modern financial instruments to avoid the risks caused by exchange rate fluctuations.