RMB Continues To Rise, Textile And Clothing Exports Encounter Crisis Again

RMB concept stocks

Four airlines collect money on the ground.

　　 Spin Lying in the middle of a gun

Some analysts believe that the RMB appreciation rate of 1% per cent, textile export enterprises sales profit fell by about 1%-4%

The RMB spot exchange rate that touched the daily limit for 5 consecutive days on Saturday trading has once again become the focus of the market's appreciation of RMB. In November 5th, the interbank foreign exchange market again touched the daily limit against the US dollar exchange rate, which is the upper limit of the exchange rate reaching the 1% trading range seventh times in nearly eight trading days.

Insiders told reporters that the sharp rise in the renminbi is good for the aviation industry and the paper industry, but for the textile industry, it is bad.

RMB 8 7 touch limit

From the middle of September this year, the rise of the renminbi was amazing, and the decline in the first 8 months was all recovered, and the middle price even exceeded the 6.3 barrier. In October 29th, the spot rate of RMB against the US dollar hit a new high of 6.2371 since 2005.

"From time, we can see that the launch of the third quantitative easing policy in the United States is an important reason for the rise of China's RMB exchange rate, and the RMB exchange rate has begun to rise passively under the continuous depreciation of the US dollar." Huo Xiaohua, a financial industry researcher at CIC, told reporters: "in the short term, QE3 will become an important thrust for the continuous rise of China's RMB. With the withdrawal of the US QE3 policy, the pressure of RMB rise will gradually decrease."

According to the data from China foreign exchange trading center, in October 29th, the RMB trading price rose 56 basis points higher than the intermediate price, only 7 basis points from the limit. On the 30 day, it closed at 6.2405, up 0.98% from the middle price, close to the limit. On the 31 day, the RMB exchange rate was again closed at a price limit of 6.2372. In November 1st, the trading price hit 6.2387 again.

In November 5th, the interbank foreign exchange market's central parity of RMB against the US dollar was 6.3082, down 37 basis points from the previous trading day. As of November 5th, the spot exchange rate of RMB against the US dollar has reached a daily limit for seven times in eight trading days.

"The launch of the US QE3 makes the dollar and dollar - denominated assets face down pressure, which has stimulated international investors to invest in the renminbi. The influx of hot money is an important reason for the rise of my RMB. In addition, the impact of the four quarter of Europe and the United States on Christmas, China's trade surplus began to rise, which also to a certain extent boost the rise of the renminbi. CIC consultant financial industry researcher Huo Xiaohua said so.

Another industry insider told reporters that the RMB has appreciated considerably over the past few years, and the overall trend in the future will be relatively stable. However, some analysts believe that the renminbi's rally will last until the first quarter of next year.

　 Four airlines benefit

Textile export profits have been squeezed

The RMB appreciation is the four largest airline. Statistics show that in the first half of this year, net profit and loss of Air China, Southern Airlines, Eastern Airlines and Hainan Airlines amounted to 341 million yuan, 300 million yuan, 228 million yuan and 178 million yuan respectively.

An airline insider told reporters that the rise of the renminbi is a good thing for airlines. Because the cost of airline leasing and overseas procurement is consumed in dollars. If the renminbi appreciates against the US dollar, the cost of US dollar consumption will be relatively reduced, and the company's income is mainly RMB. Therefore, the appreciation of the renminbi will also represent an increase in the company's income.

A happy family worried that the textile export companies are worried about the advantages of airlines. "The continuous rise of RMB is good news for China's raw material import enterprises, but it is a blow for the finished export enterprises, especially for the textile industry." Huo Xiaohua, a financial researcher from CIC, told reporters.

According to incomplete statistics, in the first half of this year, there were 41 textiles. clothing In the listed companies, 25 companies have negative earnings. Among them, Shenda shares, Vico essence, leading shares, Shanghai San Mao, San Fang lane, Huafang shares, reported bird and Jiangsu sun's net profit and loss all reported losses of more than one million yuan.

"The profit margin of the textile industry is relatively low, which relies on the lower labor costs of the domestic market to achieve the advantage of price competition. However, the gradual loss of the advantage in the process of RMB rising is a significant negative impact on it." Huo Xiaohua said so.

This reporter learned from the interview that most export textile enterprises are considering increasing the price of export products to offset the impact of RMB appreciation on enterprises. In addition, enterprises have adopted hedging to cope with the appreciation of the renminbi.

Among them, Lu Tai A told reporters earlier in 2010 that the company raised the price of its exports because of the appreciation of the renminbi. It also talked to reporters about hedging to counter the appreciation of the renminbi. However, now that the RMB appreciation is too fast, the company still has to be affected. {page_break}

According to Lu Tai A three quarterly report, the company's financial expenses amounted to 52 million 47 thousand and 600 yuan, an increase of 47.08% over the previous period. The company said it was mainly due to a decrease in exchange earnings.

"The profits of domestic export textile enterprises are relatively low, and sales volume has been more hit and the performance has declined sharply in the case of rising Renminbi." Huo Xiaohua said so. Textile enterprises have told reporters that if the company's products are raised, customers will not be able to order if they disagree. Unless there is a fixed long-term cooperative customer, the product will not be able to raise the price.

Some analysts believe that every 1% appreciation of the renminbi, textile export enterprises sales profit fell by about 1%-4%. If prices can not be raised, the profits of spinning enterprises will be squeezed again or even lose money.

Under the rising trend of RMB, how can textile enterprises survive?

Insiders told reporters that at present, China's textile enterprises have lost the cost advantage, and can no longer compete with price advantage as before. Only through technological transformation can enterprises adjust their product structure to change themselves.

In addition, Huo Xiaohua, a financial researcher at CIC, also gave advice. Exit On the one hand, enterprises should strengthen multi market operation and disperse risks. On the other hand, we should strengthen the integration of industrial chains, reduce product costs, enhance competitiveness, and gradually get rid of the negative impact of RMB fluctuations.