RMB Appreciation Of The Four Industries Are The Biggest Impact.

Speaking of the foreign trade industry that just passed the external demand in 2009, it will face the challenge of RMB appreciation in 2010.

Reporters yesterday learned from the relevant channels that as the four industries with a large proportion of exports, such as textile, electronics, light industry and machinery, the average profit margin is about 5%, and the pressure on RMB appreciation is extremely limited.

Once the RMB appreciates, the four industries may be hit most.

The average profit margin of the four industries is about 5%.

Sun Zhanjun, assistant president of the North International Group, said that for the foreign trade industry, it was clear last year that the trend of last year was only the depreciation of the US dollar.

But this year the situation is more complicated, because even the euro has begun to depreciate.

He said, "the complex changes between major international currencies have led us to study in recent days, hoping that our companies will pay close attention to exchange rate risk."

Sun Zhanjun said, because many textile and garment enterprises are OEM production, the profit margin is very low, the estimated appreciation of the renminbi 2%-3%, profits have been "smooth".

People from the China Textile Industry Association said that if the renminbi appreciated more than 5 points, more than half of the enterprises would go bankrupt.

If the import quota of cotton in the future is not properly liberalized, then the average profit after the appreciation of textile industry will be zero.

Insiders say that

The preliminary investigation of the import and Export Chamber of Commerce shows that the profit rate of the mechanical and electrical export enterprises is only 2%~3%. If the exchange rate appreciates 2%, the enterprises will lose money and then revalue, and the enterprises will lose money.

Related departments' research also found that the profit rate of electronic and mechanical was 3.5 and 6.3% respectively.

Overall, the average profit margin of the four industries is about 5%.

If the RMB appreciation is too large, the four industries will definitely be affected.

Support

Under the expectation of exchange rate changes, many enterprises have begun to take the initiative to use financial hedging tools, including the pfer of US dollars.

Zhang Ming, deputy director of the International Finance Office of the Institute of world economics and politics of the Chinese Academy of Social Sciences, found that under the expectation of RMB appreciation, some enterprises borrowed money from the United States to lend money to us dollar arbitrage.

At the same time, in order to avoid the risk brought about by the unexpected devaluation of the RMB, these enterprises have sold a renminbi to us dollar forward exchange contract on the NDF market.

Reporters learned that enterprises have two advantages in lending to the US dollar. First, the interest rate of US dollars is lower than that of RMB. Secondly, the appreciation of RMB makes the enterprises that use US dollar loans benefit directly.

For example, an enterprise needs 1 million dollars to import raw materials, if the loan of 8 million 270 thousand yuan (about $1 million), the return of the principal is also 8 million 270 thousand yuan; but if borrowed $1 million, the RMB has appreciated 2%, the dollar has changed from 8.27 to 8.11, and the enterprise only needs 8 million 110 thousand RMB to buy 1 million US dollars to repay the bank's principal and net $160 thousand.

China

Structural adjustment is urgent.

The effect of using financial hedging tools is obvious, but structural adjustment can solve the fundamental problem.

At present, in view of the characteristics of foreign trade, the Ministry of industry and information technology has been guiding some industries to make structural adjustment.

Take the clothing industry as an example, the Ministry of industry and Commerce will formulate the national strategy for the development of the independent brand of clothing home textiles, build a public service system for the independent brand of clothing home textiles, and cultivate a number of independent brands of key clothing and home textiles.

The Ministry of industry and Commerce will also study fiscal and taxation policies to support the independent brands of clothing and home textiles, give full play to the guiding role of the foreign trade development fund, the SME development fund and the special technical pformation, and support the preferential arrangement of clothing and home textile brand enterprises.

The Ministry of commerce also suggests that light industry should work hard in technological innovation, product development, brand building, product quality improvement, management level improvement and green environmental protection.

Sun Zhanjun told reporters that many enterprises have taken the initiative to carry out structural adjustment at the same time of the government's push.

Sun Zhanjun said that the northern Int'l group has pferred some of the less than half of the textile and clothing production to overseas countries, such as Bangladesh and Egypt, where local labor costs are low, trade barriers are less, and operating costs are reduced.

He expects this shift to start and will continue this structural adjustment in the next five to ten years.