How To Deal With RMB Appreciation And How To Break Ganzhou'S Export Enterprises

Editor's note: RMB exchange rate rise, export tax rebate rate decline, raw material price and labor force price rise, American subprime mortgage crisis, export market set up technical barriers.

In the tide of the increasingly close relationship between the domestic economy and international economic relations, facing such a severe international and domestic situation, what challenges and development opportunities are facing the Ganzhou export enterprises located in the less developed areas? How can they break through the difficulties and survive and how to occupy a place in the fierce competition in the international market?

This newspaper editorial center plans to set up a series of reports on the way out of Ganzhou's export enterprises in today's column of view, and makes a deep analysis and Discussion on the current situation, problems, solutions and prospects of the export enterprises in our city.

Since the implementation of the new round of RMB exchange reform in July 21, 2005, the RMB has been in a state of appreciation. By July 21, 2008, the people's Bank of China authorized the China foreign exchange trading center to announce that the RMB exchange rate between the RMB and the US dollar in the inter-bank foreign exchange market was 1 yuan to 6.8271 yuan.

On this basis, the appreciation of RMB against the US dollar in the past 3 years has reached 18%.

Since 2008, the pace of appreciation of the RMB against the US dollar has accelerated, and has risen by nearly 7%, more than the annual increase of 6.9% last year.

Faced with the rapid upgrading of the RMB exchange rate, what are the development difficulties faced by Ganzhou's export enterprises?

The picture is Ganzhou Huajian international shoe city shoe upper workshop.

Liao Shubin, a special correspondent, said: "the profit margins of enterprises are squeezed. It is understood that, because of the poor bargaining power of our export enterprises, it is difficult to raise their product prices in the international market. Most of our export products are settled in US dollars and Japanese yen. In the case of constant product prices, the appreciation of the renminbi brings a serious exchange rate loss to enterprises, which leads to a decline in corporate profits.

According to Ganzhou customs statistics, the total import and export volume of the city in the first half of this year was 560 million US dollars, an increase of 35.14% over the same period last year, of which exports were US $410 million, an increase of 38.84% over the same period last year, and imports of US $150 million, an increase of 25.97% over the same period last year.

However, with the increase of total import and export volume, most enterprises appear to be losing profits or even losing money.

The central branch of the Ganzhou Municipal Central Bank of Ganzhou, the Central Bank of the people's Bank of China, conducted a sample survey on the operating conditions of the export enterprises in the first quarter of the city. 9 of the 14 export enterprises surveyed accounted for 64.28% of the profits and losses, accounting for 64.28% of the sample enterprises. The total export volume of the sample enterprises was 66 million 670 thousand US dollars, up 16.47% over the same period last year. The sales revenue reached 1 billion 306 million 900 thousand yuan, an increase of 219 million 770 thousand yuan, an increase of 20.21%, but the profit was only 55 million 100 thousand yuan, a decrease of 4 million 230 thousand yuan compared with the same period last year, and a decrease of 7.12%.

In the survey, most enterprises thought that the appreciation rate of RMB was too fast, plus the price of raw materials increased, the cost of labor increased, the state abolished or reduced the export tax rebate rate and other reasons, the profit margins of enterprises were greatly reduced.

Reasons: low export level is difficult to resist market risks, facing the appreciation of the renminbi, corporate profits have been continuously compressed.

The main reason is that the overall export level of our export enterprises is relatively low, and the market competitiveness is not strong.

According to the relevant report of Ganzhou entry exit inspection and Quarantine Bureau, at present, most export enterprises in our city have such problems as small scale, low product grades, low technology content, and no unique product advantages, leading to the overall export level is not high enough to form a scale.

According to statistics, from January 2008 to June, clothing and clothing accessories and accessories were exported to US $97 million 320 thousand, accounting for 23.71% of the total export volume, and exports of resources, such as tungsten and rare earths, accounted for 81 million 210 thousand US dollars, accounting for 19.78% of the total exports; handicrafts (including toys) accumulated 26 million 481 thousand and 500 US dollars, accounting for 6.45% of the total exports; lighters and other components such as lighters were exported to US $24 million 760 thousand, accounting for 6.31% of the total exports.

The data show that the export commodities of our city are mainly labor-intensive, low added value, low technology content and primary resource products, and are at the bottom of profits in the international trade commodity chain. They also make exporters in a passive state in the international market, and the pressure of active price increases is very large.

In addition, most of the export commodities are represented by international agents, without their own strong customers and independent brands. This not only makes most export enterprises have certain limitations in expanding the market and expanding exports, but also the majority of export profits are consumed by dealers and brands.

Li Weimin, manager of Huajian international shoe city Co., Ltd., said that Huajian international shoe city, as a large female shoe foundry export enterprise, is a partner of several international brand women's shoes. However, because Huajian has not formed its own brand, its export price is low and its profit is low.

He said that the market price of Hua Jian's shoes is not low after the OEM, but the export price can't reach the 1/6 of the market price. The enterprise can only get a small processing fee, and most of the profits will be owned by foreign distributors and brand dealers.

According to the introduction, our city enterprises and foreign enterprises often need months to sign contracts to export products. In these months, enterprises are exposed to the risk of reduced profits brought by the appreciation of the renminbi.

In the first half of this year, because of the sharp increase in the risk of RMB appreciation, Huajian enterprises were deterred by many large orders, leading to the first negative growth of export volume.

Answer: independent innovation is the key to the difficulties faced by export enterprises. Zhong Weimin, deputy director of the Municipal Bureau of Commerce, believes that enterprises tap the potential, strengthen internal management and enhance the capability of independent innovation.

He said: "the current international and domestic situation is very unfavorable for our export enterprises, which requires us to strengthen our ability of independent innovation, and strive to strengthen the internal management of enterprises, enhance the technological content of products, and strive for the initiative of the market.

At present, most of the export enterprises in our city are striving for this direction. However, as the enterprises in our city are low in starting and weak in foundation, there is still a long way to go to break through in the predicament.

Huajian shoe city, with the idea of "development, pformation and upgrading", makes great efforts to improve its internal management.

The company increased R & D investment, changed the previous "commissioned production" as "commissioned design + commissioned production", enhanced the technological content of enterprises and increased the profits of products. It introduced the production management mode of TOYOTA LEAN line in Japan, improved the standardization of production process, and actively expanded the international market, and established cooperative relations with customers in Spain, the United States and Brazil.

At present, the order of the enterprise has recovered and is in a state of saturation. It is expected that the export volume and profit in the second half of the year will grow greatly.

Huajian group policy makers believe that in order to achieve the great development of enterprises in such a severe market environment, we must go out of a road of independent brand. Therefore, Dongguan Huabao Shoes Co., Ltd., the headquarters of the group, has begun to increase its R & D efforts, create its own brand and develop the domestic shoe market.

Zhong Weimin said: "at present, the textile and footwear industry of our city has not yet appeared an export enterprise with its own brand, which makes our enterprises in a passive state in the international market, and most of the profits are divided. Therefore, the way to go out of an independent brand should become the main direction of development of the processing trade enterprises. The municipal Party committee and the municipal government also encourage and guide enterprises to create their own brands by increasing funds and policy support."

"Exporting enterprises should change the present situation and break through the problem of profit reduction at present. The most direct way is to increase the export prices of products."

In the interview, Wang Fan, director of the foreign exchange management section of the central sub branch of the people's Bank of China, put forward such a proposal.

"But at present, there is a general problem of disorderly competition in China's export enterprises. The vicious price reduction among similar enterprises is very unfavorable for the overall development of export enterprises. Therefore, we can jointly raise the prices of products and improve the low profit and low price survival status by establishing industry associations and chambers of commerce.

In addition, changing the single way of settling in US dollar is also a way to avoid RMB appreciation.

According to the introduction, in addition to the US dollar settlement, enterprises can use the euro or RMB to settle accounts, because in recent years, the RMB has been devalued to the euro. The settlement of the Renminbi or the US dollar is actually shifting the risk of RMB appreciation against the US dollar and reducing the risk of loss of corporate profits.

This way is the same as raising the price of products, but it also faces many difficulties. The first thing we need to do is to improve the technical content and market competitiveness of products, and enhance the voice of export products in the international market.