Exchange rate “shock”: Linyi’s foreign trade has not been reduced, and big export orders still have little improvement

Behind the competition for foreign trade lies the competition for currency. The biggest event in the foreign exchange market in 2014 was the continuous unilateral appreciation of RMB against the US dollar, which began to depreciate in mid January, became more fierce in February, and even reached a new low since March. Linyi Municipal Bureau of Commerce conducted an investigation and found that the RMB exchange rate went out of the “bilateral market” and mainly devalued. Although it had a positive effect, it had little impact on the city’s foreign trade in the short term, and the enterprises were still facing the pressure of insufficient orders, squeezed profits and reduced competitiveness

the survey found that due to the high RMB exchange rate and other factors, enterprises generally lack confidence in long-term operation, dare not accept large orders and long-term orders, and export orders are obviously insufficient. Many foreign trade enterprises mainly receive short orders and express orders to reduce the risks and losses caused by the rapid appreciation of RMB. Most enterprises’ orders in hand account for about 60% within one month, about 20% within one to three months, and orders more than six months are very rare. Huasheng pharmaceutical machinery and Sanhe Yongjia, which are big exporters, mostly have short-term orders, but less large and long-term orders; However, for the export orders from Qingguo Food Co., Ltd. to the United States, the schedule is generally 45 days< At the same time, the profits of enterprises are squeezed. On the one hand, most of the orders executed by enterprises in our city were signed one or two months ago. At that time, although enterprises considered the risk of exchange rate appreciation, they could not predict the speed of RMB appreciation. As a result, some orders were executed at low profit, and some were executed to protect customers from losing money. According to the city's export of 473 million US dollars in December last year, the interest rate difference between the beginning of the month and the end of the month led to a decrease of 16.84 million yuan in income when settling foreign exchange. On the other hand, most of the commodities exported by our city come from labor-intensive industries, and the labor cost accounts for a large proportion of the product cost, especially in Willow crafts, toys, daily-use ceramics and other industries. At present, the wages of ordinary willow workers are nearly 100 yuan / day, while the wages of toy and ceramic export enterprises generally rise to about 3000 yuan / month, However, the rise of comprehensive quotation of enterprise products is limited, resulting in a small profit margin. Affected by inflation and other factors, the prices of raw materials are also rising, which has seriously compressed the profit margin of enterprises What’s more, the competitiveness of our city’s export enterprises has decreased. 1n the face of the high RMB exchange rate, some enterprises adopt the methods of locking the exchange rate, hedging financial instruments, RMB settlement, and a single bargaining to deal with the situation. More enterprises adopt the way of increasing the quotation to relieve the pressure. The price increase will inevitably lead to the loss of customers. Some small and medium-sized enterprises with poor bargaining power can only sacrifice profits to keep orders. 1n particular, the export enterprises that produce labor-intensive products mainly rely on low-cost advantages to win the market. The added value of products is low, and the profit margin is generally lower than 3%. 1n addition, the fierce competition and foreign customers are relatively sensitive to the price, so the rapid appreciation of RMB in the short term has a direct impact on them. 1n contrast, 1ndonesia, Vietnam and other neighboring countries are developing faster and faster. Coupled with the relatively low labor price, the wage of Vietnamese workers is only one fourth of that of Linyi City, which has brought greater pressure on our city’s agricultural products, textiles and other labor-intensive products. 1n addition, the currencies of the Philippines, Thailand, 1ndia, Brazil and other emerging markets, as well as Japan and South Korea, have depreciated significantly, which has a great impact on the export competitiveness of enterprises from the industry point of view, in the textile and clothing, agricultural products, diamond processing and other industries, due to the low profit margin, the gross profit margin is not more than 2-5%, the impact of the rapid appreciation of RMB is very obvious. For every 1% appreciation of RMB, the operating profit of cotton textile industry will drop about 12%, and wool textile industry will drop about 8%. Mengyin Hongda Textile Co., Ltd. exported about 1.95 million US dollars in 2011, 930000 US dollars in 2012 and only 350000 US dollars in 2013. According to statistics, in 2013, the exports of textiles, garden machinery, peanuts and products, and diamonds in Linyi City decreased by 19.5%, 61.9%, 11.7%, and 8.6% respectively. From the market point of view, customers in Southeast Asia, Africa, South America and other countries can accept the use of RMB settlement, which can reduce the impact of RMB appreciation; Customers from European Union, the United States and other countries generally do not accept RMB settlement, so the impact is relatively large. From the perspective of export product structure, foreign trade export products are mainly raw materials and primary products with low added value and relatively small profit margin. The main advantage in the international market is still low price. The fatal weakness is that it has not formed its own brand and is not in a favorable position in the competition, The appreciation of RMB means that the price advantage of products in the international market is further reduced. Orders of willow weaving enterprises in Linshu County decreased by about 30% year-on-year. Three willow weaving enterprises have closed down and four enterprises are facing semi production stop enterprises rush to settle foreign exchange while it’s good. “the devaluation of RMB against the US dollar is a great rain for our foreign trade enterprises. Today, 1 collected 200000 US dollars for goods, and took advantage of the depreciation momentum to convert them into RMB. ” Guo Xingmei, general manager of Shandong Baihua Shoes Co., Ltd., said on the 26th that the RMB has bid farewell to the previous history of unilateral appreciation and ushered in a bilateral era, which has let foreign trade enterprises breathe a sigh of relief. 1n the face of the reality of soaring costs, the shortcomings of “striving for perfection” are increasingly prominent as one of the top 50 export enterprises in our city, Baihua shoes industry focuses on the production and export of safety shoes. Guo Xingmei suffered a lot from the “zero flesh cutting” appreciation of RMB. “For example, at the beginning of last year, the exchange rate of US dollar to RMB was still around 6.28, but at the beginning of this year, it was less than 6.05. 1f an order of US $1 million was signed at the beginning of last year, when it was converted into RMB, it would still receive 6.28 million yuan of payment. 1f the payment was collected at the beginning of this year, it would be less than 6.05 yuan, 1t has shrunk to less than 6.05 million yuan, and exchange rate fluctuations have directly led to the evaporation of more than 200000 yuan of net profit. “ in view of the painful lessons of exchange rate risk, Guo Xingmei stepped up the collection and settlement of foreign exchange after the “little spring” of RMB depreciation” The US $200000 payment for foreign exchange settlement on the 26th was quoted in November last year at the US dollar to RMB exchange rate of 6.08. Today, 1 converted it into RMB at the exchange rate of about 6.18, which directly increased the net profit of more than 20000 yuan. 1t can be described as a surprise. ” Guo Xingmei said that if the RMB can continue to depreciate in the future, she will have a greater profit margin in her quotation, which will have a direct stimulus to the promotion of orders. business owners make complaints about the shortage of soft power of industrial workers’ quality is the short board temporarily relieved from the pressure of exchange rate risk. Guo Xingmei, general manager of Shandong Baihua shoe industry, said that it is not easy now. “Actually, the profits of our manufacturing industry are still getting thinner. Compared with the counterparts in Southeast Asia and other countries, the domestic shoemaking industry is faced with 18% tariff imposed discriminatively by Europe and the United States, which leads to the stagnation of domestic production of basic safety shoes. 1t is said that the biggest problem in the process of transformation and upgrading lies in the fact that the professional quality of industrial workers can not keep up with that of their counterparts in developed countries and regions. Compared with their counterparts in developed countries and regions, there is not only a low efficiency, but also a huge gap in improving. “< According to Guo Xingmei's example, the production of safety shoes requires five links. Through internal potential tapping and efficiency increasing, the qualification rate of a single link has reached 95%, "but don't think that the 95% qualification rate is already very high. You should know that if you multiply the five 95% into one, the total qualification rate of finished products will be reduced to 77%. 1 have estimated that the loss caused by unqualified leather processing is more than 150000 yuan a year. 1f other links are added up, the loss will be very alarming, which directly erodes the original meager profits. " after comparing with the counterparts in developed countries and regions, almost every link is 100% qualified, Guo Xingmei can’t help sighing that the improvement of the soft power of industrial workers’ literacy is not overnight. Under the background of saying goodbye to the “demographic dividend” in China, the survival competition of enterprises in the future should find a breakthrough in the cultivation of workers. Reporter Yang Fan experts say: cross border RMB settlement is imperative according to “Huishen” Tan Yaling, who recently came to our city to brainstorm “exchange rate articles” for the business community, 2014 will be the watershed of RMB exchange rate changes, and once the RMB exchange rate changes the unilateral appreciation mode that lasts for nine years, it will usher in the “bilateral era” in this survey, business experts also gave their own suggestions according to the trend of “bilateral trend” of RMB in the future. The top priority is to vigorously promote cross-border RMB settlement business and encourage business to give priority to RMB settlement. According to experts, in the process of speeding up the transfer of foreign trade, we should enhance the core competitiveness of foreign trade export, improve the RMB pricing ability of enterprises, guide enterprises to use RMB quotation more, put RMB quotation before foreign currency quotation, and gradually change the original foreign exchange settlement habits at the same time, we should also increase the support for enterprises to use RMB settlement, and give appropriate rewards or subsidies according to the amount of settlement, so as to fully mobilize the enthusiasm of enterprises to use RMB settlement. 1t is suggested that Linyi mall should carry out the pilot of comprehensive reform of international trade at the provincial level, introduce the corresponding supporting policies for cross-border RMB settlement business, and give the corresponding policy support and financial subsidies this article is a reprint of 1nternet media, which only represents the author’s point of view and has nothing to do with this website. 1f the information column articles and comments violate your legal rights, please call to let us know and we will deal with them in time

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