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The Depreciation Of Vietnam Shield Has Brought A Waking Up To China's Foreign Trade Industry.

2011/2/18 18:17:00 175

The persistent trade deficit and severe inflation left the Vietnamese government unable to sit still.

In February 11th, the Vietnamese central bank announced a 9.3% devaluation of the Vietnamese shield.

foreign exchange

The central market price of the Dong Dong shield dropped from 1 dollars to 18932 Vietnamese shield to 1 dollars to 20693 Dong Dong.

At the same time, the central bank also narrowed the trading range of the Vietnam shield from the middle price to 3 percentage points to 1 percentage points.

Vietnam has devalued the Vietnam shield for four times in the past 15 months.

Among them, in November 2009, the depreciation rate was 5.44% in one time, 3% and 2.09% respectively in February and August last year, and the depreciation rate exceeded 9% in February 11th this year.

Wang Jinbin, a professor at the school of economics at Renmin University of China, said that under the pressure of inflation, Vietnam had made the exchange rate of the Vietnamese shield to "market level" and reduced the fluctuation range after devaluation, so as to reduce the foreign trade deficit and increase market liquidity.

After the depreciation of the Vietnamese shield, one of the main concerns of the market is whether it will drive the corresponding depreciation of other Southeast Asian currencies.

After all, IM F and Citigroup have warned that the depreciation of the Dong shield may trigger a chain reaction in Asia, and the market does not rule out the possibility that the Vietnamese shield will depreciate again.

Based on domestic concerns, what is the impact of the continued depreciation of the Dong shield on China?

According to information, Vietnam has maintained an average annual growth rate of about 7% from 1986 to 2006, which is second only to China in Asia.

The rise of the "Asian tiger" relies on cheap labor and abundant natural resources, which are threatening China's low-end manufacturing exports.

According to local media reports, in the shoe industry, for example, in the first two years, a shoe factory worker in Vietnam had a monthly income of about 500 yuan, while workers in Chengdu, Sichuan had a monthly income of at least 1000 yuan.

along with

RMB appreciation

Speed up, Vietnam's price advantage is more and more obvious.

Taking the textile industry as an example, Global Sources recently released a research report on 385 international buyers, which shows that Chinese textile exporters have felt that orders are shifting, because 31% of respondents said they would increase purchases from Vietnam, one of the reasons is that Vietnamese products are cheaper than Chinese products by 30%.

It is not hard to imagine that the Vietnamese shield will again depreciate significantly, and cheap Vietnamese products will further "erode" the market share of China's similar exports.

This is not the only side effect. According to Sun Huaibin, deputy director of the China Textile Economic Research Center, the depreciation of the Vietnamese shield will directly affect China's fabric and

accessories

And other textile exports to Vietnam.

I believe that after all, Vietnam shield is not an important currency in the international market, nor can the Vietnamese market be compared with overseas markets such as the US and Europe. However, the depreciation of the Vietnamese shield has awakened China's foreign trade.

Low value-added labor intensive export industry is very fragile, industrial pformation is imperative, not to mention the continued appreciation of the renminbi.