Jiaxing Leather Textile Export Enterprises Have Raised Prices In Canton

The appreciation of the renminbi continued to rise in the first quarter of this year, which has risen by more than 4%, while raw material prices and labor costs continue to rise, which has engulfed many foreign trade enterprises' net profit. Jiaxing export enterprises, which are unable to bear the burden of cost pressure and the burden of RMB appreciation, have been exacting in a nostril at the Canton Fair this spring, raising their export quotas.

Last night, the Jiaxing Trade Fair of the Guangzhou Trade Fair learned that the textile and clothing products were generally raised by 5% in the spring Canton Fair, and the products such as machinery and electronics increased by 10%.

The RMB appreciation has swallowed up corporate profits and is different from previous years. The pressure on Jiaxing enterprises to participate in this Canton Fair is very high, because the renminbi has appreciated rapidly since the beginning of this year, and has made a new high since the exchange rate reform.

Data show that in the first quarter of this year, the appreciation of RMB against the US dollar increased by more than 4%, the largest increase in the single quarter.

For foreign export enterprises, the appreciation of the renminbi means that the profits of enterprises have shrunk, and the increase of 4% in one quarter has made the profits of foreign trade enterprises in Jiaxing fall to the lowest point in history.

In fact, it is not just the appreciation of Renminbi, but also the rising cost of raw materials and labor, that makes foreign exporting enterprises on pins and needles.

People from the Municipal Bureau of foreign trade and economic cooperation said that the implementation of the labor contract law increased the average labor cost by an average of about 10%. With the increasing price of oil, hydropower and metals, the prices of raw materials, such as electronics, machinery, clothing, textiles, leather and so on, continued to rise, resulting in a substantial increase in production costs and a decline in profits.

Product export quotations rose quite a lot to resolve the pressure of rising production costs. During the paction process, exhibitors had to bite the price of teeth.

It is understood that in addition to improving export quotas, exhibitors choose to sign short-term orders for consideration of RMB appreciation expectations. Even in long-term contracts, the product quotation and exchange rate floating are linked in the additional terms to avoid risks arising from exchange rate changes.

In addition, great changes have taken place in the way of trade settlement.

Because of the continuous appreciation of RMB, the export of Jiaxing has suffered huge exchange rate spreads due to the settlement of the US dollar. At this fair, many suppliers in the city proposed RMB valuation or Euro settlement, in order to prevent exchange rate risk and reduce interest loss.

The pformation of foreign trade enterprises is imperative. In this Canton Fair, the exhibitors in our city have substantially increased their prices. Most foreign businessmen expressed their understanding and said that the move had little effect on bilateral pactions.

During the first half of the Canton Fair, the exhibitors in our city received nearly 18 thousand customers, unchanged from last year, reaching a contractual intention of $210 million, of which 78% were Electromechanical, textile and garment products.

Although the increase in prices has little impact on merchants' trading intentions, the trading situation also shows that products with independent innovation are favored by the market.

For example, Jiaxing watt electromechanical and Haiyan Hua handsome plastic electrical appliances have improved the technological content and added value of products, so for the first time, exhibitors attracted many customers.

The city's foreign trade department said that at present, most enterprises in Jiaxing are small in scale, lack of advanced technology and equipment, lagging behind in product upgrading, low added value and weak sense of innovation. If foreign trade enterprises want to open up international markets, they must increase investment in product design, research and development, adjust product mix, increase added value, and win by quality.