RMB Devaluation "Heat" Foreign Trade Export Oriented Enterprises To Regain Price Advantage

According to the data released by China foreign exchange trading center in October 28th, the central parity of RMB against the US dollar reported 6.7858 yuan, down 122 basis points from the previous day, setting a new low since September 2010.

On the 28 day, the offshore renminbi fell to 6.7987 against the US dollar, hitting a record low.

Affected by multiple factors, in October alone, the value of the RMB depreciated by nearly 1.4%.

As of the first half of 2016, the CFETS index of RMB exchange rate was 95.02, which has been compared with the end of 2015.

5.86%.

However, the depreciation of the renminbi unexpectedly "heated" the original downturn of the foreign trade market.

During the two session of the 120th Canton Fair, many enterprises said that the depreciation of the renminbi allowed enterprises to regain their price advantage.

"Whether the weakness of the renminbi is the main reason for trade stability is uncertain, but no doubt that the lower renminbi is favorable for exports."

DBS bank chief economist Ke Da Ren analyzed.

According to his disclosure, although the Russian customer has not placed an order this year, the depreciation of the RMB has allowed European and American customers to come to order, making them buy cheaper Chinese toy products.

The company's toy products are mainly exported to Japan, Russia and Europe and the United States.

According to the data released by the General Administration of customs, the total value of imports and exports of China's goods trade was 17 trillion and 530 billion yuan in the first three quarters of this year, down 1.9% compared with the same period last year.

Since July this year, China's foreign trade export index has been rebounded for 3 consecutive months, indicating that export pressure is expected to ease in the fourth quarter.

According to the survey data, in September, China's export manager index was 39.9, rebounded by 1.2, the new export orders index was 40.3, rebounded by 1.9, and the manager's confidence index was 45.5, rebounded by 1.

The data of the first session of the Canton Fair, which has ended, shows that the turnover of the mechanical and electrical Museum of Guangzhou Trade Fair is 7 billion 220 million US dollars, of which 44.74% of the total turnover of the brand exhibition area is 26.74%.

The feedback from the Guangzhou trade group to the participating enterprises shows that over 50% of export enterprises predict steady future and most enterprises expect year-on-year growth in exports.

"Depreciation" or "appreciation" are neutral words. There is no absolute good or bad. They all have two sides.

The depreciation of a country's currency is sometimes a strategy, especially when there is a controlled and rhythmic depreciation. China's export enterprises will benefit directly. "

Su Tianshan, an aspiring fund manager of Qianhai open source export-oriented equity securities investment fund, said.

"The current RMB devaluation is the result of internal and external factors, including external factors and internal factors."

Zhao Xueqing, a researcher at the Institute of international finance of Bank of China, said that the current round of devaluation was mainly driven by the strong trend of the US dollar market.

At present, the Fed's interest rate raising process is always the main line of the fluctuation of the global foreign exchange market.

Recently, U.S. inflation expectations, employment, manufacturing PMI and other data are good.

Official speech continued to release interest rate signals, resulting in the December rate hike is expected to rise, supporting the US dollar has been greatly strengthened.

At the same time, affected by the economic downturn, monetary easing and rising uncertainty, the exchange rate of the euro, pound, yen and other currencies weakened, further pushing the US dollar up.

In October 25th, the US dollar index once exceeded 99, hitting a new high since February this year, resulting in a serious pressure on the RMB exchange rate.

Data show that over the past 18 months, the yuan has fallen by 15% against the US dollar, the euro and the yen.

"This year, the exchange rate of the RMB against the US dollar has been declining, and the impact on the different industries is different."

In Zhao's view, despite the devaluation of the RMB against the US dollar, there are differences in the impact on different industries: the depreciation of the renminbi, the high proportion of bad imports, the large scale of the liabilities of the US dollar, and the industries with high liquidity or huge renminbi assets, such as the aviation industry and the import and export industry.

On the contrary, the depreciation of RMB is favorable and the proportion of exports is high.

Industries that have more or more international pricing power, such as export oriented manufacturing and warehousing.

For a specific enterprise, a deep analysis is needed.

For example, the product of a mobile phone manufacturer is mainly exported to the United States, and the depreciation of the RMB will bring good results. But if its core production requirements are imported from the United States and the sales market is mainly in the domestic market, the depreciation of the RMB will bring a negative impact.