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Control Export Costs, Profit Margins, Foreign Trade Enterprises Are Cautious.

2011/5/3 14:04:00 44

Export Costs Profit Margins Foreign Trade Enterprises

The third session of the 109th Canton Fair began on 1.

Part of the exhibitors in Yangjiang, Guangdong, get the general feedback.

Large order

It has become "hot potato", and enterprises are increasingly cautious in receiving orders.

In the view of exhibitors, the third phase spring trade fair, which was launched on the 1 day, has shown signs of a rebound in the foreign trade situation.

But it is undeniable that mainland Chinese enterprises are facing "at the same time".

RMB rate

Several factors, such as climbing, rising prices of raw materials, increasing labor costs, and so on.

In order to protect profit margins, enterprises have to "be cautious" when they export orders.

Mr. Ye Guizhuan, executive vice president and Secretary General of the Yangjiang entrepreneur's chamber of Commerce, said that the increase in orders did not mean that the foreign trade situation was optimistic. Many uncertain factors increased manufacturing costs and affected the export competitiveness of enterprises.

Mr. Ye said that at present, the RMB exchange rate has climbed.

Price rise of raw materials

Several factors, such as the increase in labor costs, are stimulating the most sensitive nerve of enterprises' "profit margins", which tests the weight and courage of enterprises.

In the current situation, innovation is still an important capital to enhance export competitiveness.

Industry insiders said that controlling export costs and protecting profit space is the main factor that enterprises must seriously weigh in while taking orders. This is also the fundamental reason why many foreign trade enterprises hesitate to make a move at this spring fair and even dare not take the big ticket.

At this spring fair, the big order "hot potato" is not groundless, nor is it an individual phenomenon.

Exhibitors in Yangjiang, Guangdong said that in previous years, they wanted to pick up a few large bills at the spring fair, but this year they are different.

In particular, some small and medium-sized private enterprises often think twice about big bills. In addition to bargaining, more efforts are made to negotiate lengthening the delivery date or reducing the order amount.

In the general export oriented small and medium-sized private enterprises, raw material prices, labor costs and RMB appreciation will all directly compress the profit margins of enterprises. If the employment of enterprises is not satisfied, the increase of orders may lead to some enterprises failing to complete the order and bring about the default.

In April 29th, the RMB exchange rate rose again, and the central parity of RMB against the US dollar was 6.4990, breaking through the 6.5 important integer pass.

Foreign trade people said that the appreciation of the renminbi will directly increase the cost of the enterprises. In the first 4 months of this year, the central parity of RMB against the US dollar has risen by 1.9%, and the acceleration of appreciation is obvious.

In April 22nd, China's Ministry of Commerce released the report on China's foreign trade situation (Spring 2011), pointing out that the overall development environment of China's foreign trade has improved in 2011, but there are still many uncertainties.

The report believes that as the world economy continues to recover, the external market tends to improve in general, and enterprise orders have increased.

However, the situation of China's import and export is still complex, and there are many uncertainties affecting the smooth development of foreign trade, especially the price of raw materials and the continuous rise of wages. It will squeeze profits from enterprises to varying degrees, and the cost pressure faced by SMEs will be even greater.