Rmb Appreciation On China’s Supplies And Accessories Industry
Office supplies accessories industry in China, a considerable part of the company to rely on exports for survival and development! In recent years, appreciation of the RMB issue has been called the world has been the focus of attention, after several rounds of confrontation, is in a gradual appreciation of the yuan rising trend. RMB appreciation on China’s office supplies and accessories industry in the end bring much impact? These effects will focus on several areas in which the performance? From a development perspective, where profits? Disadvantages Where? In this regard, I visited the industry and relevant experts.
The experts said, in theory point of view, because the time lag effect, RMB appreciation on China’s exports in the short term the size and growth rate had no significant effect. The long term, it may be beneficial to China’s changing foreign trade growth, improve trade conditions for China to export-led development opportunities. We can see, the RMB appreciation on China as a whole in terms of office supplies and accessories industry has not brought significant adverse effects.
Professionals said that RMB appreciation on China’s export enterprises, the impact has two aspects, one is a short-term impact; One is the long-term effects. The first is short term. In theory, the yuan revaluation will lead to foreign currency, said Chinese goods become more expensive, but in Renminbi for foreign goods become more expensive and ultimately reduce exports, increase imports. But because appreciation of the previously signed contracts and orders for imports and exports are denominated in foreign currencies generally, or to perform, the existence of such a lag effect, makes the appreciation of the renminbi in the short term export competitiveness of Chinese products will not produce a negative effect on .
However, because floating exchange rate system, foreign trade enterprises will bring some exchange rate risk, the foreign trade enterprises and contract negotiations will be adjusted way to avoid risks, reduce losses caused by exchange rate changes. In other words, because of the existence of the yuan currency volatility, foreign trade enterprises will consider reasonable profits, signed export contracts with foreign importers, the to take into account the risk. Thus, with the gradual rise in the renminbi, export contract prices will rise. As many of our raw material supplies parts industry is imported from abroad, imports of raw materials to businesses in the process must take into account the resulting risk.
The long term, the RMB’s rise is different from the other point of view affect China’s export trade. In the case of rising RMB, the export enterprises must improve the foreign currency export prices in order to survive, or a reasonable profit. 55% of China’s export is processing trade, or by foreign-invested enterprises. Contractual relationship between the export of these enterprises is relatively stable, according to market risks and will make changes in terms of floating prices. Appreciation of the RMB exchange rate risk arising from apparently should be in its consideration, so China’s foreign currency prices of export commodities will increase with the appreciation of Renminbi. In the import price index unchanged or declining, the price of our terms of trade may be due to the rise in export prices be improved. In addition, the rise in export prices may also reduce the suffering of our products the possibility of anti-dumping proceedings, so that the export environment has improved.
If exports continue to rely mainly on abundant cheap labor and comparative advantage, export growth depends mainly on the number of expansion and low-cost competition, mainly middle and low export commodity structure, labor-intensive products, so, the continued appreciation of the yuan brought Export prices will make the price advantage of China’s exports to gradually weaken, shrinking export markets. To avoid this negative impact on foreign trade growth mode from extensive to intensive type, or a link from the main labor-intensive industries shift to technology-and capital-intensive industry or part of the main added value of export products and expand business profit margins, increased non-price export competitiveness of enterprises. Supplies and accessories business in China is still in the middle and low labor-intensive stage, technical strength is not dominant in a certain extent, affected the company’s price advantage.
Appreciation of the RMB, the company imports equal exchange of goods, RMB-denominated costs will decline. China’s processing trade and general trade exports have used a lot of imported raw materials, components, semi-finished products, so the yuan appreciation will help reduce the import costs of these enterprises, the final expansion of exports.
I am an expert from China Manufacturers, usually analyzes all kind of industries situation, such as pewter tableware , plastic hose clamp.
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