*** Continuously Appreciating Export Demand by Export-oriented Enterprises

In the coming period of time, the RMB exchange rate against the US dollar will be an insurmountable barrier for exporters.

“The pressure for the appreciation of the renminbi is very high. It is also very difficult to recruit additional workers. I plan to go to Vietnam to inspect it and see if the operating costs can be reduced.” A few days ago, the reporter contacted Siu Lam lighting company to learn about the new year of the rabbit. The plan, the person in charge of the company, Mr. Huang, told the reporter that due to factors such as the appreciation of the renminbi, the company’s operating costs have increased at an unprecedented rate. The company’s biggest plan this year is to strive to set up factories in countries such as Vietnam and relocate production links to lower production costs.

Yesterday, the latest data from the China Foreign Exchange Trading Center showed that on February 21, the central parity of RMB against the US dollar was reported at 6.5705, the third consecutive trading day since the exchange rate reform since the record high. After the start of the year, many companies face the difficulties of recruiting workers, while many export companies have to face exchange rate risks.

The continuous appreciation of the renminbi has caused enterprises to suspend their export business

“If the renminbi continues to appreciate this way, this year's export business may have to be temporarily stopped.” Mr. Huang, head of the lighting company, said that after the start of the year, insufficient recruitment of enterprises has affected the production of some orders, is to protect domestic orders or foreign orders He once hesitated for a while, but now the momentum of the continuous appreciation of the renminbi, let him gradually set the decision to secure domestic orders.

When talking about domestic orders and foreign orders in the past two years, Mr. Huang told reporters that the profits of foreign orders in the past were still quite impressive, but since the beginning of the two years, export profits have plummeted, so many companies have begun to actively explore the domestic market. However, the domestic market is plagued by the problem that too many debts are owed. If funds are insufficient, domestic sales will be very laborious. Therefore, despite the fact that international orders have been compressed more in the two years, most companies still insist on doing so.

Affected by the continuous appreciation of the renminbi, in addition to the suspension of the export business as the company where Mr. Huang is located, among the companies that reporters know, there are still some companies that have chosen to accept or not accept orders with high exchange rate risks. In an interview with reporters, Zhongzheng Lighting Sales Manager said that the continued appreciation of the renminbi has not had a significant impact on the company's order volume, but how to report reasonable prices to buyers will not only minimize the exchange rate risk, but also allow Accepted by international buyers, it is quite a headache for them. "If the quotation is unreasonable, we will either lose orders or we will lose money after the renminbi appreciates."

Try to invest abroad to set up factories to resolve risks

According to research conducted by Global Sources, affected by factors such as the appreciation of the renminbi and the increase in raw material costs, 31% of the buyers surveyed said that they would increase their purchases from Vietnam, with over half of them buying goods in Europe and America. Home, and 19% from the Middle East. Most of them are mainly purchasing consumer goods such as hardware, fashion and accessories, and some US and Canadian buyers purchase personal consumer electronics.

It is understood that as Vietnam's ready-to-wear products are generally 30% cheaper than China, Chinese garment exporters have already felt the transfer of purchases from overseas buyers, of which the impact on the casual wear industry is the most serious.

According to report, many casual wear manufacturers in Zhongshan have set up factories in Vietnam and other places, but industry insiders told reporters that due to the influence of industrial supporting environment, the current Zhongshan casual wear enterprises in Vietnam are still in the development stage.

Mr. Huang, an industry insider of the lighting industry, told reporters that many of his friends working in lighting manufacturing companies went to Vietnam to inspect factories and factories, and some friends had already set up factories there. “I also plan to go to Vietnam in the near future. Look at the investment environment. If you can, then you can have a factory specializing in foreign orders. The wages there are cheaper than here. What's more important is that you don't need to bear such a large exchange rate risk."

"Like a crystal lamp, we have to sell $10, the appreciation of the renminbi, etc., leading to increased costs. We raise the price to 11 US dollars. At this time, the same lamp that may be produced in Vietnam and the Philippines will cost US$10 or even US$9. Either we were 'grabbed' by other countries or went to lower-cost countries to set up factories to 'grab' their business."

However, not long ago, the Vietnamese dong again devalued sharply, and cheap Vietnamese products will further “erode” the market share of similar export products in China. Affected by this, it will further strengthen the determination of some exporters in Zhongshan to go to the peripheral factory.

In fact, the dramatic appreciation of the renminbi not only has a relatively far-reaching impact on some SMEs, but also accelerates the pace of transformation or transfer. Some leading Zhongshan companies have also accelerated their adjustments under the pressure of RMB appreciation.