MIIT: Assess The Impact Of Exchange Rate Fluctuations On &Nbsp; Pay Attention To Labor-Intensive Industries.

Zhu Hongren, chief engineer of the Ministry of industry and information technology, said yesterday that the Ministry of industry and information technology has been considering and analyzing the impact of exchange rate fluctuations on the economic operation, especially the labor intensive industries, in response to the "pressure test" of the RMB exchange rate. He also reiterated that since 2005, under the guidance of the principle of marketization, under the guidance of the principle of controllability, initiative and gradualism, China has steadily promoted the reform of exchange rate formation mechanism.

Zhu Hongren made the above statement at the press conference of the Ministry of industry and information technology in the first quarter of 2010. He said, "we do not need the concept of" stress testing ", but we have been considering and analyzing the impact of exchange rate fluctuations on the economic operation, especially on the labor-intensive industries.

Zhu Hongren said that the impact of exchange rate changes on the industry, especially on the export industry, is self-evident. "For some industries with a relatively large proportion of exports, especially in some labor-intensive industries, if the fluctuation of exchange rate is relatively large, the impact will be more prominent."

He pointed out that a relatively large proportion of exports in the industrial sector is light industry, textile industry, electronics industry and machinery industry. The exports of these four industries account for about 70% of the total industrial exports. If a simple estimate is made, the upward fluctuation of exchange rate will directly affect the operation of these industries, and the number of affected employment personnel is more than 70 million. If there is a marked decline in exports, these industries will bring great disadvantages to these industries.

As for some ships and large scale equipment industries, such as large export contracts and long delivery periods, Zhu Hong said that if the RMB appreciates substantially, it may also have a large exchange loss and affect the enterprise's orders. In addition, some parts and components industry may also cause some impact.

At the same time, he also mentioned that there might be some positive impacts on some industries which import mainly, or industries that rely mainly on imports. But he also pointed out that although the appreciation of the renminbi will lead to a reduction in some import costs, but because some industries lack the bargaining power, they may also get some of the benefits from this part very quickly.