RMB Appreciation Affects Henan Textile And Clothing Export

The official website of the US Treasury Department announced in April 3rd that Geithner, the finance minister, said that the US government would postpone the publication of the international trade and exchange rate policy report of the major trade partners originally issued in April 15th, that is, the delay in deciding whether to set China as a currency manipulation country.

The market expects China to give corresponding expression to the goodwill of the US side, especially when the April and May international summit is intensive. China and the US will have frequent contacts. The market expects that China and the United States can reach some common understanding on the issue of RMB exchange rate.

The dispute between China and the United States has suddenly heated up, and the exchange rate war is on the verge of breaking out. The appreciation of the renminbi is facing many pressures and tests.

Various factors promote RMB appreciation

In April 9th, the foreign exchange trading center announced a 1 yuan against the central parity price of 6.8259 yuan, compared with 6.8260 of the previous trading day, only a change of base point, but this figure has hit a 10 month high.

Zhao Zhonghua, a Shenhua futures brokerage company, told reporters that the above changes are enough to show that the trend of appreciation of the RMB against the US dollar has emerged.

Zhao Zhonghua said that the reason for the appreciation of the renminbi comes from the internal driving force and external pressure of China's economic system.

Internal factors include balance of payments, foreign exchange reserves, price level and inflation, economic growth and interest rates.

Since 1994, the current account of China's balance of payments is mostly surplus.

From 1978 to 2009, China's annual gross domestic product (GDP) growth rate is over 8%. In the past 32 years, China's economic growth is undoubtedly the fastest in the world.

Since the first half of 2002, the US dollar has weakened from strength to strength, and the RMB has depreciated along with the US dollar, which has deviated from the trend of RMB appreciation.

With the rapid growth of relative labor productivity in China, the RMB depreciates with the US dollar, making the trade deficit of the trade deficit countries bigger and bigger. All these constitute the external pressure of RMB appreciation.

From the perspective of international politics, financial hegemony is an extension of military hegemony and economic hegemony. The United States, with its leading position in the international monetary system, compulsorily implements its policies in accordance with its own will, constantly gaining hegemonic profits and maintaining its status as a "financial hegemony".

The US dollar depreciation can reduce its external debt burden, stimulate exports of its products, and shift its various economic crises to become the main form of exploitation of other countries.

The fundamental purpose of the dispute over the RMB exchange rate is that the United States hopes that the appreciation of the renminbi will impede the large-scale entry of Chinese goods into the United States.

Garment and textile industry is facing new challenges.

Light industry manufacturing industry is the main industry of China's export earning. In the clothing and textile industry, there are about 5 enterprises in China above scale, and 10% of the above scale enterprises contribute 90% of the total profits. These enterprises have strong compression ability.

However, another 90% of the above scale enterprises only contributed 10% of the total profit, and most of the profit margins were low and bargaining power was poor. The appreciation of RMB would have a significant impact on them, and directly led to the reduction of China's textile exports.

Henan province is a major textile province. The appreciation of RMB will directly affect the export of Henan's textile industry.

According to Yang Aimei, chairman of Zhengzhou Everbright textile printing and dyeing Co., Ltd., although China's textile and dyeing products occupy a larger share in the international market, most of them belong to mid-range products in the international market.

China's textile printing and dyeing industry as an export low value-added industry, its profit is only 4% to 5%.

If the appreciation of RMB is 1%, it will be acceptable to the printing and dyeing industry. But if the appreciation is too high, the printing and dyeing industry in Henan and even the whole country will be overburdened.

Yang Aimei said that from 2007 to now, the RMB has appreciated by 21%.

At present, enterprises that are still sticking to the "position" have basically experienced the last round of market screening.

In the past two years, the export tax rebate rate has been increasing in many industries to some extent, supporting the profit statement of enterprises.

If the RMB appreciation is too high, China's printing and dyeing industry will face a new round of bankruptcy.

At the beginning of this year, China Everbright set a sales target of 400 million yuan. However, since the impact of RMB appreciation, the contract has been signed since March of this year, and it has no longer signed a long-term contract, but a single sign to avoid the loss of the company after the appreciation of the Renminbi.

At present, with the reduction of long term overseas orders, China Everbright printing and dyeing has focused its attention on the domestic market. By increasing the development of the domestic market, it has made up for the loss of overseas business caused by the appreciation of the renminbi.