Wenzhou'S Footwear Exports Dropped The Biggest In The First Quarter.

In the first quarter of this year, the total export volume of the city was 2 billion 438 million US dollars, an increase of 10.6 percentage points year-on-year. Since the beginning of this year, China's exchange rate has been fluctuating frequently. The majority of Wenzhou's small enterprises with export oriented enterprises are facing new business difficulties, which will further affect the rapid development of Wenzhou's national economy. According to the sample of 44 small businesses selected by Wenzhou Banking Regulatory Bureau recently, exchange rate fluctuations have a great impact on Wenzhou's small business operations and financing.

According to statistics, by the end of 2007, the total export volume of the city was 10 billion 148 million US dollars, an increase of 25.6%, down 5.1 percentage points from the same period last year. The export products such as footwear, clothing, synthetic leather and lighters decreased by 6.6, 18.9, 13.1 and 29.1 percentage points respectively.

In the first quarter of this year, Wenzhou's total foreign trade imports and exports totaled US $3 billion, an increase of 17.6% over the same period last year.

Of which, exports amounted to 2 billion 438 million US dollars, an increase of 19.4%, an increase of 10.6 percentage points year-on-year, 7.2 percentage points more than that of the whole province, and the average monthly rate of decline in the first quarter was 1.4 percentage points faster than that in the second half of last year.

From the export market, seven market export growth rates of the top ten export markets, such as the United States, Germany and the United Arab Emirates, have dropped. From exports, the export commodities such as footwear, clothing, synthetic leather, spectacles, lighters and electromechanical products increased by 14%, 0.8%, 30.3%, 7.2%, 1.1% and 28.4% respectively.

The change of international economic environment has also affected the operation and development of Wenzhou's export enterprises to a certain extent.

In addition to affecting the financial sector, the subprime mortgage crisis in the United States has also spread to the sectors such as building materials, home decoration, retail, auto parts and so on, and the export risks of related industries suddenly increase.

According to statistics from China Export and Credit Insurance Corp Wenzhou office, from March 2007 to February 2008, the total amount of Wenzhou foreign trade export losses reported by the company increased to 8 million 793 thousand and 800 US dollars, up 639% over the same period last year.

It is pointed out that the continued appreciation of the renminbi has caused a sharp decline in the export growth of Wenzhou, which has further affected the rapid development of Wenzhou's export-oriented economy. Coupled with the problems of tight funds, rising costs and slow structural pformation in the new situation of macroeconomic regulation and control, Wenzhou's gross national product growth rate tends to fall.

In the first quarter, Wenzhou's GDP was 50 billion 703 million yuan, calculated at comparable prices, an increase of 10.5% over the same period last year, down 3.5 percentage points from the same period last year, 1.3 percentage points lower than that in the whole province, and the rate of decline is about 0.7 percentage points higher than that in the whole province.

The accelerated appreciation of RMB and the pure profits of enterprises are already a major problem for small and medium-sized export enterprises in Wenzhou. Since the reform, RMB appreciation has exceeded 15%, and this year the increase has exceeded 4%, which is much higher than that of the same period last year. The cost of foreign exchange swap has increased by 20% to 25% over last year.

The most obvious enterprises affected by exchange rate fluctuations are mainly leather shoes, clothing, lighters, glasses and electromechanical industries. The small businesses in these industries are more direct in terms of operation and financing because of their relatively low quality.

The impact of RMB appreciation is the garment industry.

According to the statistics of Wenzhou foreign trade and Economic Cooperation Bureau, the export profit margin of most garment enterprises in Wenzhou is around 5%.

With RMB appreciation of 1%, the profit of garment industry will drop by 4%.

Other industries such as shoes, lighting appliances, pen industry and other industries, the average profit decreased by 5%, 6%, 10% or more.

This year, foreign trade enterprises at least 15% of the profits have been squeezed.

Because of the decline of the US economy and the reduction of consumption power, some foreign trade products are facing the request of us customers to cut prices, so that the prices of the export products of Wenzhou's small enterprises are squeezed.

In the sample survey, the total profit of small enterprises surveyed at the end of 3 was 48 million 170 thousand yuan, an increase of 16.97% over the same period last year, including 13 small businesses involving exports, and the total profit grew by only 12.61%. The total profit of 17 of the surveyed small enterprises was negative year-on-year, and 5 of them involved exports, and the profits of a spectacle export enterprise fell by more than 70% over the same period.

According to Wenzhou Guan Sheng group, because the appreciation of the exchange rate is faster than expected, the company is now facing a loss.