China'S Export Growth Was Low In February, And Shoe Leather Enterprises Were Hit Hard.

In March 10th, the latest figures released by the General Administration of customs and the National Bureau of statistics showed that in February, China's exports grew by only 6.5%, the lowest level in 6 years.

The trade surplus was down 64%, or 8 billion 555 million yuan, the first time in recent years.

What has happened to China's exports?

Although the recent snow disaster and the weak demand in the United States constitute the cause of the growth of export growth, it is easy to see that since the reform in July 21, 2005, the RMB has gone through 2 and a half years of unilateral appreciation.

The total export growth rate of China decreased from 35% in 2004 to 25.7% in 2007, and the export growth of shoes and furniture industry dropped by about 11% and 6% in 2006 respectively.

The recent accelerated appreciation of RMB has greatly eliminated the export intention of export oriented manufacturing enterprises, and the cost of maintaining China's export competitiveness and contribution rate will be higher and higher.

In Wenzhou, when the reporter was about to go to the shoe market, the taxi driver laughed and started the car lazily.

He gazed at the front and said to himself, "what's good for the shoe factory? There are more than 4000 shoe factories in Wenzhou. The more you sell, the more you sell."

The driver was silent for a while, and the car had already entered the city's main road. In order to prove what it was, the middle-aged man wearing glasses suddenly turned his head slightly and said, "I used to be a shoe factory owner. I can't make money, so I'll drive a taxi."

It was March 3, 2008, and the middle price of the US dollar to RMB exchange rate reached a low of 7.1058. This has left many export-oriented enterprises dying. In Suzhou, Xiaoshan, Guangzhou and Shenzhen, we have witnessed these enterprises that are facing pressure to survive.

The rapid appreciation of the renminbi has pushed the Chinese economy and trade to more than 20 years of rapid growth. These companies are pushed to the edge of the cliff. While their lives are hanging on the line, the RMB continues to appreciate, and the middle price of the exchange rate will soon break through the "7" integer mark.

"Breaking 7" means that since the reform in July 2005, the appreciation of the RMB has been nearly 16%. This will bring about many industries such as textiles, electronics, furniture and light industries on the brink of extinction, or their profits will be close to zero or have begun to lose money.

The unilateral appreciation of RMB has been going on for more than two years. "Breaking 7" not only marks the quickest stage of appreciation, but also the critical point for a large number of export-oriented enterprises to completely evaporate their profits.

The number of enterprises that we contacted in the interview exceeded nine, and the rapid appreciation of RMB pairs was almost impossible.

With the "7 constraints" coming, the heavy blow of RMB appreciation began to ferment, and a few enterprises with strong desire for survival began to compress costs, build up brand names, and bargain with overseas customers.

However, in all kinds of reflexed countermeasures, there is almost no shadow of R & D and technological innovation, because reality does not give them time to accumulate technology.

China's export-oriented manufacturing enterprises do not have any breathing space, and it is a luxury to expect them to fully and rationally move towards industrial upgrading.

They are hanging on the head of export tax rebate, labor costs, raw materials prices and other sharp sword, and now more RMB appreciation "break 7", which undoubtedly equals the speeding car to the cliff and stepped on the accelerator.

Appreciation of RMB appreciation.

Continued appreciation!

Accelerate appreciation!

As suddenly boiling water sped up to the boiling point, entering the 2008, the appreciation rate of RMB has been out of control again and again, and the exchange rate between the US dollar and the RMB has rapidly reached the "7" integer pass.

After breaking through 7.4 in December 10, 2007, the exchange rate of the US dollar accelerated against the central parity of the renminbi. Its curve, like a narrow narrow funnel, became steeper in an instant.

In the 5 trading days of ~2 20 February 14, 2008, the exchange rate continued to break through 7.19, 7.18, 7.17, 7.16, 7.15 marks, and closed at 7.1452.

It continued to explore and reached a 7.1058 low in March 3rd, and the appreciation of the renminbi accelerated again.

Since then, the renminbi has appreciated by 14.13% since the reform, and has appreciated by 2.80% in 2008. In the first two months of 2008, the appreciation of the renminbi has been equivalent to 43% in 2007.

The accelerated appreciation of the renminbi is expected to become increasingly strong. Standard Chartered Bank expects the RMB exchange rate to rise to 1 yuan at the end of the second quarter of 2008 to RMB 6.94 yuan, and China Merchants Bank predicts that the RMB exchange rate will be "broken 7" in the third quarter of 2008.

"Breaking 7" is coming soon, and people are pouring into the banks to settle accounts. In Shanghai, Chengdu, Lanzhou and other places, there has been a report of increasing foreign exchange settlement. Overseas hot money is convinced that the RMB will continue to appreciate rapidly. According to the Ministry of commerce data, FDI (real foreign direct investment) in China in January amounted to US $11 billion 200 million, up nearly 110% over the same period last year.

Unfortunately, these excessive and strong appreciation expectations will further stimulate the speed of appreciation. "Break 7" is near.

Tan Yaling, senior analyst at Bank of China global financial department, said: "the depreciation of the US dollar is not a simple short-term behavior or policy, but also has long-term comprehensive, forward-looking and foresight strategic planning and preparation."

Tan Yaling believes that after "breaking 7", the negative effect of RMB appreciation will begin to appear: "market expectations and market inertia will push up the trend of RMB breaking 7 yuan, but for China's economy and finance, it is not interest demand and positive situation, but on the contrary, it will be more passive and difficult.

The maintenance and maintenance of the 7 yuan level is a prudent gateway to China's economic and financial interests, including the interests of Hongkong, and deserves careful consideration.

Although the central parity of exchange rate is hovering around 7.1 at present, the pressure from the corporate level has emerged.

Profit margins leap "zeroing" and "breaking 7" will knock or even break through the profit margins of textile, furniture, light industry, electronics and other industries. Large and small garment factories, textile mills and accessories factories are standing beside the highways, most of which have been abandoned.

The glass is broken, the curtains are flying in the wind, and the company's tablets are incomplete.

A lot of pollutants are floating on the river, and sometimes they smell strange. This is the Xiaoshan which was named "China's textile industry base" by the China Textile Industry Association in 2004.

"Don't go, businesses don't want to be interviewed.

These factories do not have no orders, but they are too low profits to do so.

Exchange rate adjustment, labor costs rise, tax rebate reduction, these superimposed effects make them gasp, closing the door, the pfer of production. "

Before leaving, we were told by a director of the foreign trade department of the Department of foreign economic relations and trade of Zhejiang.

"More than 90% of the textile enterprises in the province are private enterprises, and most of them are small and medium-sized. If the RMB appreciation and export tax rebate policy continue this way, they will lose more than half by the second half of this year."

The chief said with great anxiety.

In fact, from 1 to October 2007, China's textile industry started less than 70%, and a small number of enterprises have already switched production and shut down.

There are more than 4500 textile enterprises in Xiaoshan district. The workers in Han Bo international on Beitang road are still producing in an orderly way. Shen Baozhong, deputy general manager, told us: "in 2007, because of the jump in exchange rate, we lost 120 million yuan in profits."

Han Po international is already a lucky business in the textile industry.

From 1 to October 2007, the net profit margin of the national textile and garment industry averaged 3.83%, and the most worrying thing was that in the more than 40 thousand enterprises of the whole industry, the profit margin of more than 2/3 was below the average level, and the profit margin of these enterprises was only 0.63%.

In 2006 and 2007, the export price of Chinese textile products increased by 7.37% and 7.26% respectively. The appreciation rate of RMB was 3.35% and 6.85% during the same period. The textile industry relied on the export price to digest the loss of RMB appreciation.

According to the first textile net calculation, the comprehensive price of textile and clothing in 2008 is about 7.18% (the price of textiles alone is expected to be only 2%), and this year the RMB appreciation is expected to reach 10%, which means that in 2008, the last method of raising prices against appreciation has failed.

Once the "break 7" is a foregone conclusion, the 14.3% appreciation will make most enterprises move from net profit to net loss.

The first textile network survey shows that more than 80% of the textile and garment enterprises think they can accept the RMB appreciation 5%~10%, while the RMB appreciation is 20%, only 3.13% of the enterprises can afford it.

"Breaking 7" is not only the turning point of the loss of the textile industry, but also the freezing point of light industry and electronics industry.

The textile industry said: "2008 is the most difficult year for the textile industry in the past 10 years". Yang Xumai, Deputy Secretary General of Wenzhou glasses chamber of Commerce, said: "2008 may be the most difficult year for Wenzhou's glasses industry."

There are 6 trade barriers, followed by the labor contract law. Nowadays, the wheel of RMB appreciation is rolling. "Glasses manufacturers in Wenzhou have collapsed in recent years, and the profit margin of the whole industry is only 2.5%.

Many enterprises have abandoned the half abandonment attitude towards the main industry of glasses, and have launched the third industry.

Yang Xumai said.

Shen Wei Min, executive director of Suzhou victory Technology Co., Ltd., said: "the profit of OEM based Suzhou victory 2004~2007 has been decreasing year by year, which is 13 million yuan, 10 million yuan, 9 million yuan and 6 million yuan respectively, while the volume of business in the same period is increasing at 5% speed."

With more production and less profit, Shen Wei Min worries for electronics manufacturers: "if the RMB exchange rate breaks 7, those smaller electronics manufacturers will be at the limit of survival.

If it reaches 6.5, it will be a fatal blow to many private electronics manufacturers.

According to statistics, the appreciation rate of the electronic industry will decrease by 5% if the value of RMB rises by 1%. If the appreciation is over 20%, its export profit margin will be negative.

Huang Weiye, President of Shenzhen Furniture Industry Association, said that since the appreciation of RMB, Guangdong's furniture export growth slowed down significantly, and furniture exports in 2007 decreased by 20% compared with the same period last year.

It is estimated that the profit margin of the furniture industry in 2007 is only 2.5%, while the profit margin of the software export industry is only 4%, the RMB appreciation is 1%, and the profit of the software industry will decrease by 0.7 percentage points. When the appreciation rate is 6%, the industry will go to overall losses.

Like a drowning man, a company's sudden change "upgrading" business is not about learning to swim, but struggling to survive. "The exchange rate changes too fast, and the upgrading and pformation of enterprises is impossible to synchronize with them. In this case, enterprises can only adjust their survival strategies."

Shen Wei Min said.

Without time to breathe, enterprises must survive in the face of RMB appreciation and smash their profits, and a mutational "upgrade" is being staged.

The existing technology strength is not enough to support enterprises in the momentum of the rainbow appreciation of the Renminbi before reborn.

Their attempts to reduce costs, negotiation strategies, brand building, meticulous management and information technology, though with the color of industrial upgrading, can always see the shadow of reflection.

We must reduce costs.

An electronics company began to reexamine its products and found that a single product could use less than 2 grams of copper through the rearrangement of the coil.

Shenzhen Baoan's FENDA speakers went out of danger: in the sharp compression of profit space, invested 1 billion yuan to build a new factory area, trying to reduce costs by expanding the scale.

Speed up product renewal cycle.

Old products can not be raised in negotiations, and new products will be developed continuously.

Federal furniture is only an office swivel chair. It launched five series of more than 40 new products last year.