Exchange rate "shock" Linyi foreign trade has not decompressed export orders still little improvement

Behind the competition for foreign trade is a currency contest. The biggest event in the foreign exchange market in 2014 was the unilateral appreciation of the renminbi against the US dollar. The devaluation began in mid-January and the devaluation trend in February was even fiercer. Since March, it has been even lower. The Linyi City Bureau of Commerce conducted an investigation and found that the RMB exchange rate went out of the "bilateral market" and was mainly depreciated. Although it produced good results, it had little impact on the city's foreign trade in the short term. The enterprises faced insufficient orders and squeezed profits. Pressures such as reduced competitiveness are still evident.

The survey found that due to factors such as the renminbi exchange rate still running at a high level, enterprises generally have insufficient confidence in long-term business operations, and large orders and long orders cannot meet, and export orders are obviously insufficient. Many foreign trade companies mainly accept short and quick orders to reduce the risk of rapid RMB appreciation and reduce losses. Most of the companies in the hands of orders within a month accounted for about 60%, 1-3 months accounted for about 20%, 6 months or more orders are scarce. Large orders for export Huasheng Pharmaceutical and Sanhe Yongjia are mostly short-term orders, with large orders and long orders less; and orders for Qingguo Foods Co., Ltd. to export to the US usually have a duration of 45 days.

At the same time, corporate profits are squeezed. On the one hand, most of the orders executed by enterprises in the city were signed a month or two ago. Although the company took into account the risk of exchange rate appreciation, it was unable to predict the rapid appreciation of the renminbi. As a result, some of the company’s orders were executed by meager profits, and some were to protect customers. Loss implementation. According to the city’s export of 473 million U.S. dollars in December last year, the difference between the beginning of the month and the end of the month resulted in a reduction of revenue of 16.84 million yuan during settlement. On the other hand, most of the commodities exported from our city come from labor-intensive industries. Labor costs account for a large proportion of product costs, especially in the industries of wicker crafts, toys, and daily-use ceramics. Currently, the wages of ordinary Liubian workers are nearly 100%. Yuan/day, the wages of workers in toys and ceramics export enterprises generally rose to around 3,000 yuan/month, but the comprehensive price increase of corporate products was limited, resulting in a smaller corporate profit margin. Affected by inflation and other factors, raw material prices have also continued to rise, which has severely reduced the company's profit margins.

What is more serious is that the competitiveness of export enterprises in the city is reduced. Faced with the high renminbi exchange rate, some companies have adopted lock-in exchange rates, financial instruments, risk settlement, RMB settlement, and a single bargaining method. More companies have taken measures to increase quotations to relieve pressure, and price increases will inevitably lead to customers. Loss, some SMEs with poor bargaining power can only sacrifice profits to keep orders. In particular, export enterprises that produce labor-intensive products mainly rely on low-cost advantages to win the market. Their low added value and profit margins are generally lower than 3%. Coupled with fierce competition, foreign customers are relatively sensitive to prices, so the rapid appreciation of the The direct impact and impact are relatively large. In comparison, Indonesia, Vietnam, and other neighboring countries continue to accelerate the pace of development, coupled with relatively low labor prices, Vietnam's wages are only a quarter of Linyi City, the city's agricultural products, textiles and other labor-intensive products Brought more pressure. In addition, the emerging markets in the Philippines, Thailand, India, and Brazil, as well as the sharp depreciation of the currencies of Japan and South Korea, have superimposed the impact on the export competitiveness of enterprises.

From the industry perspective, in the textile and apparel, agricultural products, diamond processing and other industries due to lower profit margins, gross profit margin does not exceed 2-5%, the impact of rapid appreciation of the renminbi is very obvious. With a 1% appreciation of the renminbi, the operating profit of the cotton textile industry will fall by about 12%, and the wool textile industry will decline by about 8%. Mengyin County Hongda Textile Co., Ltd. exported about 1.95 million U.S. dollars in 2011. In 2012, its export value was 930,000 U.S. dollars. In 2013, it only exported 350,000 U.S. dollars. According to statistics, 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, in 2013. From the market perspective, customers in countries such as Southeast Asia, Africa, and South America can accept the use of RMB settlement, which can reduce the impact of RMB appreciation; customers in countries such as the EU and the United States 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 based on raw materials and primary products. The added value of products is low, and the profit margin is relatively small. The main advantages in the international market are still lower prices, and the fatal weakness is that they have not formed their own. Brands are not in a favorable position in the competition. The appreciation of the renminbi means that the price advantage of products in the international market is further reduced. The Linyi County Liubian enterprise orders decreased by approximately 30% year-on-year, and 3 companies have closed down production, and 4 companies are facing semi-discontinued production.

Businesses are eager to rush for settlement

“The depreciation of the RMB exchange rate against the U.S. dollar has been a drop in heaven for our foreign trade companies. I collected 200,000 U.S. dollars today and quickly converted into RMB with the depreciation momentum.” 26th, Shandong Baihua Shoes General Manager Guo Xingmei said that the renminbi has bid farewell to the history of unilateral appreciation and ushered in the bilateral era, allowing foreign trade companies to breathe a sigh of relief. In the face of the reality of cost surge, the shortcomings of “excellence” and difficult to do are increasingly prominent.

As one of the top 50 export enterprises in the city, Baihua Footwear focuses its business on the production and export of safety shoes. The yuan’s appreciation of the “zero cut” has caused Guo Xingmei to suffer a loss. “For a very real example, at the beginning of last year, the exchange rate of the US dollar against the renminbi was still around 6.28, and it has become less than 6.05 since the beginning of the year, if it was signed at the beginning of last year. An order of 1 million U.S. dollars was converted into renminbi at the time, and 628 million yuan could be received. If the cash was settled before the beginning of this year, it would shrink to less than 6.05 million yuan. Exchange rate fluctuations will directly lead to more than 200,000 yuan net profit. Evaporated."

In view of the bitter lesson of exchange rate risk and the “Little Yangchun” that ushered in the devaluation of the renminbi, Guo Xingmei stepped up payment collection and settlement. "The $200,000 settlement that was settled on the 26th was the price that was reported to the US dollar against the RMB 6.08 in November last year. Today, I converted it to RMB at the exchange rate of around 6.18, which directly increased the net profit of 20,000 yuan. "We are surprised." Guo Xingmei said that if the renminbi could continue to depreciate in the future, he would have a greater rate of interest in the quotation, which would have a direct stimulus to pulling orders.

Business owners Tucao: lack of soft power of industrial workers is short-board

Guo Xingmei, general manager of Shandong Baihua Shoes Co., Ltd., who was temporarily relieved from the pressure of exchange rate risk, said that it is not easy now. “Actually, the profits of our manufacturing industry are still thinning. The domestic footwear industry exports compared with its counterparts in Southeast Asia and other countries. The 18% tariffs that face discriminatory collections in Europe and the United States have led to the stagnation of production of basic safety shoes in the country, all of which are said to require transformation and upgrading, and the crux of the problem lies in the unsatisfactory professionalism of industrial workers, and their counterparts in developed countries and regions. This is not only inefficient, but there is also a huge gap in excellence."

Guo Xingmei, for example, produced a total of five key steps in production safety shoes, and he himself had improved efficiency through internal tapping. The pass rate of a single link has reached 95%. “But you don’t think that the 95% pass rate is already high. You have to know 5 95% is a piece, the total qualified rate of the finished product is reduced to 77%, and I have calculated that only the loss caused by unqualified leather processing will exceed 150,000 yuan a year. As a result, the number of losses will be staggering, and this directly erodes the originally meagre profits."

After comparing 100% of qualified counterparts in developed countries and regions, Guo Xingmei could not help but sigh that the improvement in the soft power of industrial worker literacy is not a timely practice. In the context of domestic bid farewell to the “demographic dividend”, the competition for future business survival should be Seek a breakthrough in cultivating workers. Reporter Yang Fan

Experts suggest: cross-border RMB settlement is imperative

In recent days, Tan Yaling, the “God of Religion” who has been brainstorming in the city for the business community to “make a good exchange rate article,” appears that 2014 will be a watershed for the change in the exchange rate of the renminbi. The renminbi exchange rate has changed for a nine-year unilateral appreciation mode. Come to the "bilateral era."

In this investigation, business experts presented the trend of “bilateral trending” according to the future of RMB, and gave their own suggestions. The first place is to vigorously promote cross-border RMB settlement business and encourage the business community to use RMB settlement as a priority. From the perspective of experts, in accelerating the transfer of foreign trade, China will increase its core competitiveness in foreign trade, increase its renminbi pricing ability, and guide enterprises to use RMB quotations more. Before placing renminbi quotes in foreign currency quotes, gradually change the original foreign exchange rate. Settlement habits.

At the same time, efforts should be made to increase the support for enterprises to use RMB settlement, and appropriate incentives or subsidies should be given according to the settlement amount, so as to fully mobilize the enthusiasm of enterprises in using RMB settlement. It is suggested to implement Linyi Mall to carry out the pilot project of comprehensive reform of international trade at the provincial level, to issue corresponding cross-border RMB settlement business support policies, and to provide corresponding policy support and financial subsidies.

This article is a reprint of online media. It only represents the author's point of view. It has nothing to do with this site. If news articles and comments infringe your legal rights, please call us and we will handle it in a timely manner.