RMB Has Broken 7, Textile People Have Been Psychologically Prepared, And More Concerned About Competition In The Same Industry.

In August 5th, the RMB depreciated against the US dollar, breaking through 7 yuan.

About RMB breaking 7, Xu Hui, a manager of a large garment manufacturing enterprise in Anhui, has told reporters that he has long been psychologically prepared.

However, the lock up measures that his company has already done may be temporarily affected by the book changes due to the latest exchange rate changes.

"There is a trend in the market in June that the exchange rate will fall from 6.8 to 6.5, so the company will lock in 6.7 to 6.8, and last week it was still locked up." Xu Hui said.

In Xu Hui's view, the company's move to lock the exchange rate to 6.9 at the beginning of this year was "earned". Generally speaking, lock remittance will advance 4~5 months, and this year's 5~6 month exchange rate will be 6.7 to 6.8. But recently, though he reminded many times in the company group that he did not lock the remittance again, he failed to prevent the company from changing the lock up arrangement ahead of schedule.

Unlike Xu Hui's company, Li Changchun, manager of Wujiang Weihua Textile Co. Ltd., told reporters that the company did not adopt the measures of lock up because of its small export scale in recent years.

Li Changchun said that the RMB exchange rate broke 7, which is good for the overall foreign trade, and more for the industry is just the impact of psychological expectations.

Li Changchun believes that on the one hand, foreign businessmen themselves are very smart. In the face of the devaluation of the renminbi, they naturally have "psychological number" when making quotations, and will adjust their quotations accordingly.

On the one hand, although depreciation will give Chinese products an advantage over foreign products in the international market, the competition among domestic counterparts is more important for the textile industry. Therefore, he believes that the impact of devaluation on the textile industry is relatively limited.

Xu Hui told reporters that because some textile companies were rushing to ship in the first half of last year and the first half of this year, orders for the United States increased, but individuals expect the data to fall in the second half of this year and the whole year.

Li Changchun also revealed that many foreign trade companies have been in a wait-and-see state recently, paying close attention to the Sino US trade negotiation process. They especially dare not take orders from the us to avoid unnecessary risks.

According to customs statistics, in the first half of this year, China's imports and exports to the United States amounted to 1 trillion and 750 billion yuan, down 9% compared to the same period last year, of which exports to the United States were 1 trillion and 350 billion yuan, down 2.6% compared to the same period last year. Imports from the United States decreased by 399 billion 380 million yuan, down 25.7% compared to the same period last year, and the trade surplus was 954 billion 810 million yuan, expanding 12%.

In July 12th, the Information Office of the State Council held a press conference. When the import and export situation of the first half of 2019 was introduced by Li Kai Wen, director of the General Administration of customs and the head of the statistical analysis department, the Sino US trade and economic frictions brought some pressure to our foreign trade, but the impact was generally controllable. Despite the decline in Sino US bilateral trade data, the total number of imports and exports of China's foreign trade continues to grow, and the global market is still highly optimistic about the potential of the Chinese market.

In response to the changes in the foreign trade situation and domestic production costs, Xu Hui's company has built factories in Kampuchea 5 years ago. However, because the local manufacturing advantages are not as obvious as those in China, in recent years, factories have been transferred to others for operation, and other considerations have been made.

The market is still changing, and the possibility of RMB depreciation and appreciation exists simultaneously.

Xu Hui said that although he personally did not support the continued lock up, the company also did not rule out the fact that it would continue to lock in to make a wait and see, because the outcome of the next negotiation could also turn better. Once the proposed 10% tariff was abolished, the renminbi could resume its appreciation.

Instead of focusing on exchange rates, companies need to focus more on physical businesses, which is also what officials want to convey.

Relevant people in charge of the people's Bank of China said today that when they answered questions related to the RMB exchange rate, they were devalued by the RMB exchange rate against the US dollar, breaking through 7 yuan by unilateralism and protectionist measures and the expectation of China's tariff increase. However, the RMB remained stable and strong for a basket of currencies. This is a reflection of market supply and demand and international exchange market fluctuations.

The official stressed that enterprises do not want to expose too much to exchange rate risk, and support enterprises to purchase exchange rate hedging products to avoid exchange rate risk. At the same time, we should also see that the RMB exchange rate is likely to depreciate or to appreciate. The two way floating is normal. It is not only for enterprises, even more professional financial institutions, can hardly predict the trend of exchange rate.

The person in charge suggested that we should focus on the entity business, instead of focusing too much energy on judging or opportunistic exchange rate trends. We should set up a financial concept of "risk neutral". We should aim to lock in foreign exchange costs, reduce the uncertainty of production and operation, and realize the main business profit.