Enterprises Appealed For Slow Appreciation Of RMB

As a labor-intensive industry, textile and clothing industry is a major pillar of China's traditional industries and an important livelihood industry related to the overall situation of economic development. At present, exports still occupy an important position in the textile and garment industry. The negative impact of RMB appreciation on exports will directly affect the profits of enterprises. In this regard, NetEase financial interview with the textile chamber of Commerce on the impact of the appreciation of the RMB exchange rate on the textile industry.

"At present, China's textile and garment export industry profits are generally low, the average net profit margin is 3%-5%, some enterprises profit is even 3%, and the ability of enterprises to resist policy risk is relatively weak. If the Renminbi revaluation, it will compress the only profit margins of enterprises and reduce the competitiveness of export products, which will cause a serious blow to China's textile and clothing exports, "the textile chamber of Commerce said to NetEase finance.

Appreciate 1%, reduce profits 1%

According to China Customs statistics, in the 1-2 months of this year, China's textile and clothing import and export trade increased considerably, with total import and export volume of US $30 billion 590 million, an increase of 27.5% over the same period last year, of which 25 billion 830 million US dollars in exports increased by 30.3%, and imports 2 billion 380 million US dollars, an increase of 14.6%.

"Although the orders for textile and clothing have obviously recovered since last year, prices have been very low, and the appreciation of the renminbi will directly reduce the existing profits of the enterprises." Relevant officials of the chamber of Commerce and electronics revealed to NetEase finance.

An internal calculation from the enterprise shows that when the cost and price of other production factors remain unchanged, the RMB appreciation will be 1 percentage points, and corporate profits will also be reduced by 1%. The mechanical and electrical chamber of Commerce said that the loss caused by interest rate is a rigid loss and can not be digested through consultation with customers and improvement of supply chain management.

"For the textile and garment enterprises with a profit margin of only 3%-5%, once the RMB appreciates, it will directly compress the profit margins of the enterprises and produce a series of chain reactions." The textile chamber of Commerce said to NetEase finance.

The person in charge stressed that small and medium enterprises were the first to be affected by the appreciation of the renminbi. It can be predicted that a large number of orders will be lost to the surrounding competitive countries. The whole industry will be reshuffled, and many small and medium-sized enterprises will go bankrupt, and the large number of workers will lose their jobs, which will directly affect the stability of the society.

In 2009, there were more than 68 thousand enterprises engaged in textile and garment export business, most of which were small and medium-sized enterprises.

The export situation is cautiously optimistic.

The head of the textile chamber of Commerce said that although the main export market of textile products has been showing signs of recovery from the recent market retail and import data in Europe and the United States, the steady growth of China's textile and clothing exports is still subject to many uncertainties.

The official pointed out that in addition to the expected increase in the pressure of RMB appreciation, the profits of enterprises will be reduced. The pressure on the world economic situation and the rising cost of raw materials will be the factors that restrict the future development of textile enterprises.

First of all, it is too early to say whether the world economy is fully recovered. Europe and the United States are the main market of China's textile and clothing exports, accounting for nearly 40% of China's textile exports. At present, the unemployment rate is high, the savings rate is rising, and the purchasing power of consumers on daily consumer goods will not increase significantly.

Eurozone statistics show that the euro zone unemployment rate reached 9.9% in January. According to the data released by the labor department in March 5th, the unemployment rate in the United States remained at a high of 9.7% this February.

Secondly, enterprises are facing severe cost pressures. At the beginning of the year of the tiger, there were serious "labor shortage" in the main export processing areas of textile and clothing such as the southeast coast. To solve this problem, the most important measure for enterprises is to improve their salaries and salaries, which means the increase of human resources cost.

In addition, the prices of production factors such as raw materials, energy, water and electricity are rising rapidly, the difficulties of small business loans and high interest rates all make China's textile and clothing export costs continue to increase, and the competitive advantage in the international market will gradually weaken. Among them, the contradiction between high prices of raw materials is increasingly prominent.

Enterprises appealed for slow appreciation of RMB

According to the understanding of the chamber of Commerce, at present, textile enterprises generally believe that if the renminbi is to appreciate, it hopes to slow up and slight appreciation, and give enterprises more time to adjust, so as to avoid the way of appreciation of the "small step and fast run" in 2007, which will cause heavy losses to the profits of enterprises.

At present, many enterprises have taken the appreciation of RMB into account in order cost. When signing contracts with foreign businessmen, they take direct measures to raise prices, or add relevant clauses in foreign trade contracts. For example, if the exchange rate changes exceed a certain range, they should negotiate prices or assume corresponding contractual risks separately. In addition, other enterprises avoid the risk of appreciation by buying financial hedging products of banks, such as forward foreign exchange transactions, currency options, exchange rate futures and so on.