The "Crowding Out Effect" Of RMB Appreciation Affects Dongguan Shoe Material Market

"The more you earn in dollars, the more you lose." Dongguan Jucheng shoes Cheng Liangbo, general manager of the mill, told reporters. Recently, the RMB has shown a "high rise" momentum again, which is not good news for Cheng Liangbo, who is engaged in foreign trade export.

Cheng Liangbo used to have two in Dongguan Shoe material He merged the two factories into one last year to reduce the cost pressure. Currently, he has nearly 300 employees. Generally speaking, the cycle from receiving orders to collecting payments is at least three months, and Cheng Liangbo's orders are all from overseas markets, all of which are settled in dollars. Therefore, Cheng Liangbo is very sensitive to fluctuations in the exchange rate. Last year, he lost a lot of money due to the accelerated pace of RMB appreciation.

Cheng Liangbo is lucky that several stable overseas customers have survived the downturn in the manufacturing industry in recent years. Compared with the first interview with him in 2009, the scale of the factory has slightly expanded, but the profit margin has decreased by 5%. In the past two years, due to the sharp reduction of overseas orders, combined with the rapid rise of domestic labor costs, raw material prices and other factors, many small and medium-sized enterprises in the Yangtze River Delta and the Pearl River Delta could not bear the pressure to close down and move away. Dongguan's shoe material industry is also shifting to some Southeast Asian countries.

　　 RMB appreciation The crowding out effect is strengthening. Cheng Liangbo said, "At present, the profit margin of shoe materials business is only 10% without including exchange losses. If the exchange rate losses are included, the profit margin is obviously less than 10%." In his view, the appreciation of the RMB is a major trend, but for many small and medium-sized business owners like him, there is nothing they can do. Some large-scale enterprises can agree with customers to price at the agreed exchange rate, but few export enterprises can have such a say. Cheng Liangbo feels that the pressure of continuing to open a factory in Dongguan is too great, the human cost is too high and the profit is very low, and it is increasingly difficult to survive.

"Exchange losses can only be borne by oneself and deducted from profits." Cheng Liangbo felt helpless: "I can't think of any other way to deal with them except to move the factory away." In the past two years, Cheng Liangbo has thought of many ways to improve profits, including strengthening enterprise management and introducing advanced machines. Although it has some effect, it can't bear the continuous downturn of the whole manufacturing industry. Cheng Liangbo is also considering moving his factory to Southeast Asian countries with lower labor costs. He plans to visit Southeast Asian countries next month to choose a suitable new site.

Cheng Liangbo is about to leave the hot land where he has struggled for more than 10 years“ Dongguan They are also taking the route of high technology and low pollution. From big brands such as Nike and Adidas to ordinary OEM factories, everyone is gradually moving away, which is the general trend. "