RMB Appreciation Will Bring Small And Medium Shoe Enterprises Merger And Reorganization Crisis

May 3rd hearing is to avoid risks.

• Sichuan shoe enterprises plan to negotiate with customers for RMB settlement as far as possible, but few customers are willing to settle accounts in Renminbi.

The trend of RMB appreciation may continue.

The US dollar is unlikely to change its downward trend in the short term. Next, the central bank should slow down imported inflation.

The provincial chamber of Commerce reminds foreign trade enterprises to lock in the exchange rate as far as possible in the foreign trade and the customers, so as to reduce risks.

Just as people have speculated on whether the RMB exchange rate between the US dollar and the US dollar will break through the "6.5" mark in the near future, the latest data from the China Foreign Exchange Trading Center yesterday showed that the central parity of RMB against the US dollar in April 29th was 6.4990, breaking through the 6.5 important barrier at one stroke and setting a new high since the reform.

Break the six pass and say goodbye to "65".

The US dollar index has continued to run low in the international market recently, while the central parity of the RMB against the US dollar has broken through 6.55, 6.54, 6.53, 6.52 and 6.51 five points since April, up to 61 basis points yesterday, lifting an important integer mark of 6.5, speeding up the pace of appreciation, and officially leaving the "6.5" era.

In June 19th last year, the central bank announced the resumption of the exchange rate reform to enhance the flexibility of the RMB exchange rate, and continued to dynamically manage and regulate the floating of the RMB exchange rate in accordance with the floating interval of the announced exchange market exchange rate.

Data show that since the exchange reform, as of yesterday, the central parity of RMB against the US dollar in the past 10 months, the cumulative increase has reached 4.96%.

However, according to the latest data released by the BIS, in March this year, the effective exchange rate of RMB was 117.69, down by 2.56%, while the nominal effective exchange rate index of RMB was 112.42 at the same time, and the ratio fell by 0.71%.

Some analysts have pointed out that the trend of RMB appreciation may continue.

On the one hand, it is difficult to change the downward trend of the US dollar in the short term. On the other hand, the central bank officials have said recently that "we must continue to improve the RMB exchange rate formation mechanism in accordance with the principle of initiative, controllability and gradualism, enhance exchange rate flexibility and slow down the pressure of imported inflation."

This may mean that in the future, the appreciation of the renminbi will become an important choice in monetary policy instruments.

With the continuous appreciation of the renminbi, the pressure on China's export enterprises is constantly upgrading.

The Ministry of Commerce said this week that the average profit margin of export enterprises in 2010 was 1.47%, and the profit margin of export enterprises dropped to 1.44% from 1 to February this year.

Taking Sichuan footwear enterprises representing Sichuan's export enterprises as an example, from the first quarter data released by Sichuan customs, the overall export situation of Sichuan shoes has declined, and volume and price have dropped.

Wu Xifan, general manager of Chengdu Yi Bai Lan Shoes Co., Ltd., told reporters yesterday that the continued appreciation of the RMB has brought a great impact to foreign trade enterprises, especially export oriented enterprises, but it is not entirely impossible to deal with.

"If an enterprise has an import business, it can offset the adverse effects of some export businesses. At the same time, the enterprise can agree on the forward exchange rate with the customers so as to avoid losses caused by the excessive appreciation of the renminbi."

Wu Xifan said that at present, the order of the company and many customers has already agreed that the clearing rate is 6.4. In addition, the business can negotiate with the client in Renminbi as far as possible.

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Small and medium-sized export enterprises face merger and reorganization

However, compared with the situation of the shoe industry, some small and medium-sized footwear industry is facing more impact and difficulties.

Because when some small and medium-sized enterprises settle their accounts with customers, they are based on the exchange rate of the day. If the appreciation rate of RMB is further expanded, the dollar recovered by these enterprises when they receive the money is even more "worthless".

"Small and medium sized shoemaking enterprises can raise prices to reduce the impact of RMB appreciation, but most of the customers of the enterprises are coming at low prices and do not accept the raise price. If the price is raised, most orders will be pferred to factories in Vietnam and Philippines."

Wu Xifan believes that if the RMB is going to keep up with this trend of appreciation, some small and medium sized footwear industry will be faced with merger and reorganization at this time next year.

In this regard, relevant officials of the Sichuan provincial chamber of Commerce said that foreign trade enterprises should avoid the adverse effects brought about by the appreciation of the renminbi, in addition to making the best possible agreement in foreign trade and the customers to lock in the exchange rate so as to reduce risks. What's more important is that the enterprises themselves should adjust and upgrade their industrial structure, and replace products with single value and low value with products with high added value and brand value, so as to enhance the competitiveness of products and enterprises in the international arena.