Devaluation Of Textile And Clothing Exports Are Overvalued

In order to enhance the marketization and benchmarking of the central parity of RMB against the US dollar, the people's Bank of China announced on its website in August 11th that it decided to improve the central parity of RMB against the US dollar.

Since August 11, 2015, market makers have referred to the closing rate of the interbank foreign exchange market in the daily interbank exchange market before considering the demand and supply of foreign exchange and the exchange rate of major international currencies.

The latest data from the China Foreign Exchange Trading Center show that in August 13th, the central parity of RMB against the US dollar was 6.4010, down 704 basis points from the previous trading day, setting a new low in recent years.

In the three consecutive trading days, the central parity of the RMB against the US dollar has fallen below the "6.4" mark, and the market's expectation of RMB depreciation is heating up.

China's textile industry

Due to its high international market share and high international market dependence, it is considered to be one of the most profitable industries in the depreciation of the RMB against the US dollar.

However, how much space is there for such a good thing? How do textile and garment exporters in this area look at this trend?

Speaking of the depreciation of the RMB against the US dollar, Beijing

Luo Xiaolin, general manager of commodities import and Export Co., Ltd. used the word "mild" to describe the impact of exchange rate changes on export business in recent days.

He believes that the devaluation of the RMB against US dollar 2~3 points will benefit the company's export profit, which is mainly reflected in the recent collection of orders, which will be directly reflected on the accounts.

But in the long run, customers have bargaining power. They must continue to negotiate on the next export orders. Exporters will not enjoy the profit margins brought by exchange rate changes alone.

Since August 12th, Southeast Asian countries such as Vietnam and Malaysia have also followed the RMB devaluation sharply, which has made a hedge against the competitiveness of China's manufacturing industry in the international market, especially in the European and American markets, so that our competitive advantage has not been reflected in this round of depreciation.

The level of benefits brought is "moderate".

Yin Guoxin, chairman of Chen Feng Group Limited by Share Ltd, which has been engaged in textile and garment export business for many years, thinks that the export enterprises are still looking at the depreciation of the renminbi in a normal way of mind, so as to follow the rules of the market and let nature take its course.

There are many factors that affect the export cost.

It's just one aspect.

Compared with the previous years, the market fluctuation of cotton prices often reached two digits, and the fluctuation of prices and raw materials prices had a greater impact on the export and production and operation of enterprises.

Similarly, any market hype is not beneficial to the healthy development of the industry. On the contrary, it is most important to do business well.

Zhou Jianxiong, President of the provincial textiles import and Export Group Co., Ltd., said that the current depreciation of the RMB against the US dollar was somewhat sudden, after all, this situation has not yet been encountered.

He believes that the direct benefit of the current depreciation to exports is still short-term, mainly on the two categories of export orders will bring favorable books: first, the export has not yet received foreign orders, and the other is a contract already concluded.

In the long run, the moderate depreciation of the renminbi will be beneficial to improving the overall competitiveness of Chinese products.

In the short term, there are still some foreign trade enterprises to make speculative purchases of long-term settlement.

In addition, due to

The overall bargaining power is weak, and in the face of a larger depreciation, some customers may find reasons not to perform or ask for price cuts.

The impact of the future on the overall export will be the decline in unit price and the increase in export volume, and the extent of growth will depend on the demand and recovery level in the international market.

He said that the currencies of almost all countries have depreciated sharply against the US dollar, and the purchasing power of the international market has been greatly reduced.