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RMB exchange rate to new highs .textile and garment exports are differentiated

Author : textile and garment exports are differentiated Date : 2013-5-28 17:43:09

May 22, from China Foreign Exchange Trade Center data show that the RMB exchange rate at 1 U.S. dollar against 6.1904 yuan, representing an increase of 7 basis points the previous day, the 2nd consecutive new high since the foreign exchange reform. Many experts point out that RMB appreciation endanger China's export trade, currency continued to appreciate tantamount to suicide.

Since the exchange reform since 2005, textile and garment industry has been facing the RMB appreciation impact on its performance. Time flies, time flies, companies throughout the industry, whether it has been able to resist the exchange rate risk stubborn?

Foreign trade enterprises generally confined

Since a large dependence on exports, the average profit margin is low, the textile and garment industry affected by the negative impact of RMB appreciation can not be ignored. Product sales prices due to foreign currency denominated or linked with international prices, raw material procurement from abroad, on the one hand, the textile companies need to consider the cost of procurement is sufficient to compensate for the decline in sales prices for the loss on the other hand, even though both decline similar, RMB appreciation will lead to domestic RMB-denominated corporate profits decline.

According to the agency estimates that every 1% appreciation of RMB, the cotton textile industry operating profit to decline by about 12%, wool textile industry decreased by about 8%, a decrease of approximately 13% of the apparel industry.

May 21, China Foreign Exchange Investment Research Tan Yaling [microblogging] in his Sina blog, wrote that the current situation of China's trade downturn relatively better than most, but the upward and stability as well as compared to the period is not good, even further deterioration. It's a great relationship and exchange rate of RMB appreciation does affect the export trade. More importantly, China's trade is processing and generation of processing, the increased cost of RMB appreciation, the international market can not choose our products. In addition, many foreign trade enterprises through RMB settlement tools, market spreads spatial short-term factors such as the use of local and regional disparities, for short-term profits to acquire, without taking into account the real needs of the real economy.