Ruble Plummeted Shaoxing Textile Enterprises Hit Textile Industry "Siberia Cold Current"

Recently, rub The fall of cliffs has occupied the headlines of the world economy. In the first half of 2014, 1 US dollars could be exchanged for 33 rubles. Recently, it even changed to 1 US dollars for 72 rubles. In the export industry, a "Siberia cold current" began to blow. Unwittingly, rouble became the worst currency in the world in 2014. In many parts of China, textile enterprises with Russia as an important export market have been affected and frostbite. Among them, the impact of Shaoxing textile enterprises is quite large.

Russia is an important export market for Shaoxing.

E Burke, a British statesman, once said, "businessmen are interested in places where wealth can be found." With the rapid development of Russian economy, bilateral trade between China and Russia has also developed rapidly. More and more Chinese textile enterprises have put their eyes on Russia's emerging market. Especially after Russia's accession to the WTO, the import and export of textiles are more standardized, and the prohibitions, licenses, authorization and other regulations that do not conform to WTO rules are modified or abolished. The import and export tariffs have been correspondingly reduced, so that the cost of exporting to Russia has been reduced, and the enthusiasm of Chinese textile enterprises to fight Russia has been increased. According to our customs statistics, in 2013, China's textile industry exported 8 billion 500 million US dollars to Russia, a sharp increase of 45.6% over the same period last year. Russia is an important export market for textiles and clothing products in China.

Extraordinarily sensitive to the international environment Shaoxing textile Enterprises also seize this development opportunity, and their eyes are pouring into the Russian market. Many textile enterprises in Shaoxing say that as the world's emerging economies, Russia has a large market demand for textiles. Before Russia's textiles were mainly purchased from South Korea, Turkey and other places, and now China's textiles are becoming more and more popular.

It is reported that in order to expand the Russian market, in 2012, Shaoxing Mina Textile Co., Ltd. established a branch office in Russia, and also hired Russian staff to carry out better negotiation and cooperation with local merchants. "In the first year of opening a branch in Russia, not only did we develop some new customers, but the amount of trade over 3 million dollars was also pleasant, when we decided to increase our trade with Russia." Lu Huiling, general manager of sales, said.

Shaoxing Shenglong Home Textile Co., Ltd. specializes in producing Russian fabrics, with an annual output exceeding ten million meters. After Russia's accession to the WTO, the company saw its business opportunities and further expanded its exports to Russia. "Russian businessmen have no higher demand for fabrics than those from Europe and the United States, and because of the lack of local garment processing enterprises, we have created opportunities for us to export to Russia, and the room for future growth should be great." Li manager of Shenglong home textile told reporters that Russia's light industry foundation is weak, but the market demand is great, and textile enterprises have great potential.

Ruble plummeted Shaoxing textile enterprises hit

Without ruble's continued decline, Shaoxing's textile business will continue to flourishing in Russia. However, the collapse of the ruble appeared recently, which changed the upward trend. It is reported that in the second half of 2014, the scale of Shaoxing's exports to Russia showed a decreasing trend, especially in November, when exports to Russia were only 46 million 240 thousand US dollars, and the year-on-year decline was almost 20%. "Since January 2014, the rouble has fallen by nearly 40% against the US dollar." Shaoxing customs analysts pointed out that the ruble exchange rate continued to decline, and businesses did not dare to pick up. In the next few months, Shaoxing's impact on Russian exports will be more obvious.

Because of the serious losses, many merchants had to stop trading with Russia and wait for the opportunity. Some Shaoxing textile enterprises bosses mentioned that in 2014, the overall decline of Russian orders was really serious, and some textile enterprises were still slowly boiling away. Some textile enterprises had been directly closed because of the particularly difficult business of foreign trade.

"Recently, because of the collapse of the rouble, Russian customers can not afford to pay, and our businesses are also being returned." Fu Guangyi, general manager of Zhejiang fan's Textile Co., Ltd. Van chase is a collection in Shaoxing. Weaving Export-oriented enterprises, mainly in dyeing and trade, mainly produce and sell knitted fabrics. Their products are exported to more than 50 countries and regions, such as Europe, the United States and South America. They sell more than 100000000 dollars annually and trade with Russia for a long time. "Business with Russia is becoming more and more difficult, especially in 2014. Before that, exports to Russia amounted to about 10 million dollars a year, only 67 million in 2014, and the export situation was very severe. Just like our goods have been shipped to Russia, but the ruble falls sharply, and we can not talk with customers, so we can only deliver the goods at a loss. " Fu Guangyi said that such a thing is more than just one of us, many textile enterprises have suffered such a blow this year.

Keqiao district is a gathering place for Shaoxing textile enterprises. In recent years, Keqiao foreign trade enterprises have expanded their business to Russia, and Russian export enterprises have surged from the original more than 400 to more than 600 now. The sharp fluctuations in the ruble exchange rate undoubtedly increase the operational risks of these foreign trade enterprises. Reporters from the Keqiao District Commerce Bureau, 1~11 months, Keqiao area exports to Russia 170 million U.S. dollars, down nearly 7%. In November, exports fell more sharply, reaching 27.59%. "Many export enterprises have stopped exporting to Russia." Chen Weixing, deputy director of Keqiao Commerce Bureau, said.

Avoiding risks is the top priority.

The number of Russian textile enterprises involved in Russian trade is enormous. For these textile enterprises, the ruble depreciation means a significant increase in operating risk. "The ruble's depreciation has increased the import cost of Russia, resulting in a reduction in orders for many enterprises. What is more, the risk of breach of contract is also increasing. Fu Guangyi said that although many textile enterprises adopt the way of US dollar settlement to Russian trade, ruble will indirectly affect local enterprises after devaluation.

"Because Russia's trade costs are rising, you can't afford to pay some dollars in advance." Lu Huiling said that before many enterprises' accounts for Russia were usually paid in advance, and the old customers could pay less in advance. Now the situation is that local enterprises dare not credit, Russian enterprises can not afford to pay, and the desire for trade between both sides is declining. "In the next period of time, the attitude of Shaoxing textile enterprises to trade with Russia will be dominated by wait-and-see." Lu Huiling said that many Russian textile companies in Shaoxing have generally strengthened risk warning and are always concerned about the risk of default.

"Under the grim situation of the continued ruble of the rouble, we are paying close attention to the consequent impact and making corresponding adjustment measures." In an interview with reporters, Chen Weixing said that avoiding risks is the most important thing at present. Relevant departments will actively communicate with these enterprises, and what impact the ruble's devaluation will have on their business operations, and relevant departments are paying close attention to and tracking them.

Besides, the staff concerned reminded Shaoxing textile enterprises that the ruble's depreciation is an organic whole. This reminds the textile enterprises that go out to do foreign trade, and at the same time must pay attention to the domestic market, and enhance the ability to fight against market risks through internal and external trade and two wheel drive. At the same time, it is best to use RMB, US dollar or Euro settlement to avoid exchange rate risk.

Farewell to low price and high quality innovation

Although the Russian market accounts for a small share of Shaoxing's textile exports, it involves more enterprises. Although the Russian textile industry has made great progress in recent years, it still can not meet the growing demand for consumption. The import volume is increasing every year, and there are still great business opportunities. After Russia's accession to the WTO, all trade practices were carried out in accordance with WTO rules, bringing more convenience to our textile enterprises in developing the Russian market. However, we should not ignore the practical problems of textile export competitiveness.

"The Russian market is very attractive, but it also requires our textile companies to step up the pace of market changes." Fu Guangyi said that Chinese textile products have been popular with consumers in the Russian market for a long time, and Shaoxing textile enterprises have benefited from it. Therefore, exports to Russia have been dominated by low and medium products. But with the improvement of the living standard of Russian residents and the increase of consumption level, the demand for medium and top grade products is expanding. With the accession to WTO, the Russian market will be open to more countries and attract more trade partners to join. Therefore, our textile enterprises should make timely adjustments according to the changing market demand, expand the proportion of medium and high grade products, and enhance their competitiveness.

"Farewell to low quality low price competition, to quality and brand development." During the interview, many textile enterprises in Shaoxing mentioned that Chinese enterprises, as the traditional suppliers of Russian textiles, should see changes in the market and export products should change with the development and changes of the Russian market, so that they can be based on the Russian market in the long run. As an enterprise, it is necessary to carry out innovative research and development on the basis of analyzing the Russian market, develop new textile fabrics suitable for the local market, and increase brand publicity.

Many people in the industry also analyzed that the ruble depreciated and our textile enterprises suffered such a great impact. Textile enterprises can not shift their responsibilities to the unpredictable international economic situation, nor wait for the international situation to improve and then re-enter the Russian market. This passive mode of operation will eventually ruin the business. Textile enterprises should start from themselves, enhance their ability of independent innovation, make high-quality products and fist products, and enable enterprises to withstand any change in external environment. This is the most important thing for enterprises to do.