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RMB Double Squeeze Foreign Trade Textile Enterprises On The Verge Of Life And Death Line

2013/5/6 22:15:00 22

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RMB Exchange Rate Textile Enterprises Textile Export

as of April 2013, the RMB had appreciated by 0.7% in 2013.

Since the reform of the RMB exchange rate regime in 2005, the RMB has appreciated by 31.68% against the US dollar since the end of 2012.

After the entry of P into 2013, the profits of foreign trade enterprises have been "evaporated" along with the increasingly frequent record of exchange refunds.

Under the dual pressure of RMB appreciation and internal depreciation, < a href= "http://www.91se91.com/news/index_c.asp" > export enterprises < /a > large area.

some experts believe that the trend of RMB will be devalued from appreciation to foreign trade.

However, the central bank vice president Yi Gang recently said in Washington that from the market situation, it is suitable to consider further expanding the fluctuation range of the RMB exchange rate.

This means that the risks faced by domestic exporters in the future may shift from the appreciation of the renminbi to the uncertainty of two-way fluctuation of exchange rate.

foreign trade profits evaporate /p >

< < a target= "_blank" href= "http://www.91se91.com/" > textile > /a > industry has no profit to export. Our company has to stop processing trade production. "

In April 28th, Ceng Xiang, chairman of the three dimensional digital textile company, told the author of "China business newspaper".

Zeng Xiang was the first group of Hongkong people who came to Dongguan to run the textile industry and worked in the textile industry for more than 40 years.

Because of its authority and position in the field of textile technology, the industry is known as "Zeng Ye".

"P >" our company has been doing this for more than 10 years. In the past few years, the a href= "http://www.91se91.com/news/" > the textile industry < /a > exports can not make money, everyone is losing money.

Zeng Xiang told me.

The biggest problem for exporting enterprises is that P keeps rising.

"RMB appreciation is too fast, rising continuously, textile export enterprises dare not take orders."

P, who frequented Hongkong and the mainland, recalled that it used to convert 120~130 yuan into 100 Hong Kong dollars. The last time he used only 100 Hong Kong dollars, he could only exchange RMB 77.8 yuan, and the renminbi appreciated more than 30% against Hong Kong dollar.

Less than P, the appreciation of the renminbi has been gaining momentum in this year.

April 26, 2013 is the last trading day before the May 1 holiday, and the central parity of RMB against the US dollar represents a high price of 6.2208.

In April this year, the renminbi broke 9 historic highs and appreciated by more than 0.45%.

In the first 4 months of this year, the renminbi has appreciated by 0.7% against the US dollar.

for export enterprises, this means that when the order at the beginning of the year is settled in US dollars, the profit will shrink by 0.7% directly.

For this reason, exporters complain.

"since October last year, the appreciation of the renminbi has been nearly 3%. The appreciation of the renminbi has reduced the profit considerably. Now we only dare to take the short list within 3 months."

In April 23rd, Mr. Wu, who had done more than 20 years of gift and foreign trade, told the author at the 113rd Canton Fair: "thanks to the appreciation of the renminbi and the cost increase, we have raised the price of 10%, but I wonder if customers can accept the price increase."

After the P price increase, Mr Wu did not have confidence in the company's earnings forecast this year.

"Last year, the gross profit margin of the company was 20%, the net interest rate was 7%, the gross profit margin is estimated to be 15% this year, and net interest rate is hard to say, which is very much related to the appreciation of RMB and domestic inflation. I reckon this year will be worse than last year."

"if the US dollar continues to rise to 6, our company will have to close."

Mr Wu estimated that the value of the US dollar appreciation to domestic foreign trade enterprises would be 5.8.

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RMB double extrusion

While P appreciates the value of the renminbi, it is also losing its value.

The result is domestic inflation, rising prices and rising cost of export enterprises, of which labor costs are the fastest rising.

Mr. Huang is a salesperson of < a href= "http://www.91se91.com/news/" > foreign trade company < /a > Import and export department. He told me that because of inflation, the labor cost of the furniture production of the company increased by 30% compared with that of last year, and the monthly salary of furniture industry workers increased from 2000 yuan / month in the same period to 3000 yuan / month this year.

In this labor-intensive furniture industry, labor cost can account for 1/3 of enterprise cost.

Similar to other traditional export enterprises, Zeng Xiang introduced that the monthly wages of skilled workers in the textile industry even surpassed the furniture industry, which has risen to 4000 yuan / month in Dongguan.

with the depreciation of RMB, another cost "big head" - raw materials are also rising.

Mr. Huang and Mr. Wu indicated that raw materials in the industry increased slightly over the same period last year.

> a href= "http://www.91se91.com/news/" > textile industry < /a > the day is more bitter, because they simply can not control the cost of raw materials.

Because the country implements the quota of cotton import quota and restricts the import of large quantities of overseas cotton to the domestic cotton market, domestic textile enterprises mainly use the domestic a href= "http://www.91se91.com" > cotton < /a >. At present, domestic cotton is higher than the international 3000~ 4000 yuan / ton, which causes the pressure of the export enterprise's production cost to be enormous.

Because of the "cost plus" pricing model used in textile products such as yarns, the cost of reference for export orders is lower than that of international cotton prices, so yarn order prices are at a low level.

The production of domestic cotton with high cost is constantly falling in price, which means that the larger the volume of production, the more profits will be consumed.

A large number of textile enterprises have to close.

Zeng Xiang told the author: "the products exported by the company are settled in US dollars, but export enterprises should pay wages in Renminbi instead of RMB. The appreciation of the renminbi indirectly increases the cost."

Under the deteriorating living environment, a large number of Hong Kong textile enterprises have to move out in recent years. The relocation route is no longer possible from the Pearl River Delta - the Yangtze River Delta - the mountain area. Now, the whole industry chain has to move to Southeast Asia, Burma and India, so as to reduce the impact of RMB appreciation, labor and raw material costs rising.

"Making a" a target= "_blank" href= "http://www.91se91.com/" clothing "/a" cost "is not a price in Vietnam.

For example, Lining made 30 yuan for a garment in the country, maybe 20 yuan in Vietnam, and the domestic brands do not order with the domestic manufacturers.

Zeng Xiang regrets that the price of domestic textile export enterprises has been unable to compete with those of Southeast Asian enterprises, and the order of domestic textile enterprises has been largely lost.

"the textile industry has only 20 years in the domestic life cycle. It is too short. If the RMB is stable, the textile enterprises still have to do export, but the appreciation of the renminbi and the fluctuation of RMB are also expanding."

He felt infinite emotion.

After the textile industry has been pferred to a country and region, it often has a vigorous period of 30~50 years.

in recent years, the domestic economy has been ups and downs, the RMB has appreciated constantly, and the domestic and foreign trade policies have been changing frequently. Zeng Xiang has to adjust the company strategy accordingly.

After struggling for 3 years and seeing no improvement, he now no longer deals with processing trade exports, and in turn he starts importing trade.

No doubt, when the renminbi appreciates, it will be unfavorable to exports, but it will be beneficial to imports.

"now the currencies of Europe and Japan are depreciating, so the other thing is that we buy their stuff to enter domestic sales.

For example, we use US dollar settlement to buy functional a href= "http://www.91se91.com" > fiber cotton material < /a > from Japan, Korea and Taiwan, buy cashmere from Italy, and then sell it to domestic brand production enterprises.

Zeng Xiang introduced that there is no profit margin for ordinary raw materials import, and that high-end raw materials must be imported. These materials used to be very expensive, but the appreciation of the renminbi now is 10% lower than the original price.

"the government has thought a lot of ways to find out the way for foreign trade enterprises, such as pformation and upgrading, branding and pfer to the mainland, but these are all" nonsense ".

As long as we control the appreciation of the renminbi and control domestic inflation, we will do well in foreign trade exports. "

Mr Wu pointed out that "in fact, the domestic foreign trade enterprises are very strong and do not worry about the government."

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towards suspense /p >

April 10th, the import and export data released by the General Administration of Customs showed that imports rebounded sharply in March, while export growth slowed down and the deficit was 880 million US dollars. This is the first deficit in China's foreign trade in 13 months.

So far, China's trade surplus has accounted for less than 3% of the internationally recognized trade imbalance boundary for 2 consecutive years.

however, in the first quarter of this year, the total value of China's foreign trade imports and exports was 6 trillion and 120 billion yuan, excluding the exchange rate factor, an increase of 13.4% over the same period.

Of which, exports of 3 trillion and 200 billion yuan, an increase of 18.4%, imports 2 trillion and 920 billion yuan, an increase of 8.4%.

The trade surplus was 270 billion 500 million yuan ($43 billion 70 million), a huge increase compared with a surplus of only 670 million dollars in the same period last year.

Generally speaking, China's foreign trade has been improving in the first quarter, but export growth has declined in March. P

The data released by China Chamber of Commerce for import and export of light industry and crafts in April 27th also showed that foreign trade was still not optimistic: in the two session of the 113rd Canton Fair, the turnover of the "a href=" http://www.91se91.com "light industry craft < /a" was only 3.9% higher than that of the 112nd session in the first 3 days of the Canton Fair, which was 4% lower than that in the 111st session.

the industry thinks that the crux of foreign trade export is, on the one hand, external demand has not yet stabilized; on the other hand, the pressure of RMB Appreciation under the background of continued easing of major currencies such as US dollar and yen has created new pressure on export enterprises this year.

however, the foreign trade circles are worried about the rapid trend of RMB appreciation. Experts are not worried, and warn that in the near future, the renminbi will probably depreciate and the capital flow will not rule out the possibility of a sudden reversal.

This means that the nightmare of RMB appreciation for export enterprises will probably end.

Therefore, in recent years, experts have paid more attention to the formation mechanism reform of RMB < a href= "http://www.91se91.com" > exchange rate < /a >.

reviewing the latest exchange reform, the central bank launched the third exchange reform in April 14, 2012, easing the floating rate of RMB against the US dollar from 0.5% to 1%.

But this did not cause the renminbi to appreciate in the short term. The appreciation of RMB in 2012 narrowed from 4.5% in 2011 to 0.25%.

and this exchange reform process is likely to continue in the near future. Recently, the vice president of the central bank, Yi Gang, said that the current market conditions make it a "proper" thing to consider easing the fluctuation of the RMB exchange rate again.

In response, the industry interpreted that this may mean that the central bank is considering increasing the fluctuation range of RMB exchange rate on 1% basis.

Lu Zheng commissar, chief economist of Industrial Bank believes that the RMB exchange rate volatility is expected to expand by August this year, and the rate may reach 2.5%.

In the second half of the year, when the US dollar may accelerate appreciation, improving RMB exchange rate flexibility will play an important role in reducing China's economic and financial risks.

However, the increase in exchange rate elasticity may increase the cost and earnings volatility of export enterprises, and then bring uncertainty to enterprises.

This means that the risks faced by domestic export enterprises may change from one-way appreciation to two-way volatility.