Sichuan export shoe enterprises are seriously affected by RMB exchange rate

according to the latest data of China foreign exchange trading center, on September 21, the central parity rate of RMB against the US dollar rose above 6.7, 113 basis points higher than the previous trading day, rewriting the new record since the exchange rate reform for the eighth consecutive trading day. 1t is understood that since September, the accumulated appreciation rate of RMB against the US dollar has been as high as 1.6%, which has brought great losses to the export of shoe industry with low profit margin< Since September 10, the central parity rate of RMB against the US dollar has appreciated rapidly, reaching a record high of five times since the exchange rate reform. However, on Friday and Monday, the central parity rate of RMB against the US dollar also reached a new high, but the central parity rate of RMB against the US dollar only appreciated 9 and 72 basis points respectively, To 6.7110 yuan to the US dollar. Just as the market thought that the appreciation of RMB was slowing down and might usher in a correction, the central parity rate of RMB against the US dollar rose 113 points yesterday, breaking through the 6.7 level to 6.6997 yuan against the US dollar, reaching a new high since the exchange rate reform in 2005 for the eighth consecutive trading day. 1n these eight trading days, the RMB has appreciated 820 basis points, while since September, the RMB's exchange rate has been rising to a new high, The RMB rose to 6.6997 from 6.8105 against the US dollar, with a cumulative appreciation of 1.6% as for the reason for the sudden appreciation, Tan Yaling, President of China Academy of foreign exchange investment, believes that the main reason is still the depreciation of the US dollar. 1n the early stage, the RMB once fell to 6.8 and rose above 6.7, which is only a correction to the previous situation. At the same time, she believes that the fluctuation range of the RMB does not exceed the normal range. However, some analysts believe that the recent frequent pressure from the U.S. Congress on the RMB, coupled with the peak of a large number of new foreign exchange accounts in August, reaching 243 billion yuan. The international hot money entering the Chinese market on a large scale itself has caused great pressure on the appreciation of the RMB. These are the reasons for the appreciation of the RMB shoe enterprises have lost more than half of their profits by less than 3% RMB has appreciated by 1.6% against the US dollar since September, which has a huge impact on Sichuan’s foreign trade enterprises “the most influential industries are shoes, hats and textiles, which have large export value but low profit margin.” According to a person who has been engaged in export for a long time, the appreciation of RMB will not only increase the price cost and weaken the competitiveness of export enterprises, but also directly bring about the loss of profits. He pointed out that at present, the overall profit margin of the mechanical and electrical industry is between 8% and 10%, and the impact of RMB appreciation can be digested. However, many textile and shoe industries with low profit margins will lose nearly half of their profits due to the sharp rise of foreign exchange a person in charge of camedo shoes said that at present, the profit margin of the shoe industry is less than 5%, and most of them are around 3%. 1f it is a gradual appreciation, the impact on export enterprises is controllable, while the RMB appreciation of 1.6% in September will bring a lot of losses to the profits of many export shoe enterprises an unnamed general manager of Chengdu shoes enterprise disclosed that although he was prepared for the long-term trend of RMB appreciation, it was still very sudden for such a short and fierce appreciation recently. He calculated that the company’s export profit margin was less than 3%, and the RMB appreciation of 1.6%, which means that the income of foreign exchange settlement will decrease by 1.6%, and “the loss of profit is nearly 50%”

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