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RMB Exchange Rate Continued To Fall In The Short Term Is Good For Foreign Trade Enterprises

2022/5/24 18:37:00 0

　　 In recent years, with the development of China's economy, it is almost normal that the RMB exchange rate continues to rise. However, the continuous depreciation of the RMB exchange rate has aroused the attention of the market. On the afternoon of May 12, the US dollar broke through 6.82 against offshore RMB, and the last time it fell below the 6.80 barrier dates back to September 30, 2020. In the next few days, the exchange rate of US dollar against offshore RMB fluctuated between 6.7 and 6.8.

　　 Industry insiders believe that for export-oriented textile and garment enterprises, in fact, the weakening of RMB exchange rate is not necessarily a bad thing, which will be very conducive to the export of the overall market. At the same time, the positive factors brought about by the exchange rate have a limited impact on SMEs. In the long run, it may bring uncertainty to future orders.

　　 Recently, the reporter connected enterprises located in different links of the industrial chain - Dalian fanruike Garment Co., Ltd., Yantai Mingyuan Creative Life Technology Co., Ltd. and Shaoxing Zhongwei Textile Co., Ltd. to learn their real views on the continuous change of exchange rate and the countermeasures.

　　 1. What will be the impact of continuous exchange rate changes?

　　 The exchange rate of each textile enterprise is directly affected by the exchange rate of RMB against the export chain, because the exchange rate of each textile enterprise is strongly affected by the exchange rate of the textile industry.

　　 Take fabric enterprises as an example, the recent weakening exchange rate has brought new opportunities for fabric enterprises relying on export. As the founder of a new fabric enterprise and general manager of Shaoxing Zhongwei Textile Co., Ltd., Gao Jinghang has his own judgment. He told the reporter of textile and garment weekly that the continuous decline of the RMB exchange rate is good for foreign trade enterprises in the short term, especially for small and medium-sized enterprises, because the competitiveness of products made in China has gradually increased in the overseas market. At the same time, we should also pay attention to a series of uncertain factors caused by the change of exchange rate, for example, enterprises can not give a definite product quotation.

　　 Dalian fanruike Garment Co., Ltd., a clothing enterprise, has the same worry about the quotation caused by the instability of exchange rate. Chu Xuemei, general manager of Dalian fanruike Garment Co., Ltd. and founder of arugaw norga brand, said that the instability of exchange rate will bring a series of impacts on the operation of the enterprise. For example, there are many uncertainties in the product quotation of foreign customers, and the signing time of new orders will be changed. That is, SINOSURE is adopted to deal with the situation, and a large number of currencies with the same value are required as security deposit. For enterprises, the uncontrollable operating profit directly increases the operational risk.

　　 Chu Xuemei further introduced that "the continuous change of US dollar / RMB exchange rate has a great impact on foreign trade clothing enterprises. Foreign trade enterprises are highly sensitive to the exchange rate, just like last year, the firm RMB caused the company to directly lose about 4% of its profit."

　　 Exchange rate changes have a very direct regulatory effect on import and export trade. Talking about the impact, Ning Xue, international business director of Yantai Mingyuan Creative Life Technology Co., Ltd., analyzes that the impact of exchange rate changes is very complex, and it can not be simply said that it is good or bad.

　　 In view of the export market of Mingyuan's creative life, Ning Xue said that the export sales of Mingyuan declined from January to April. There are many specific reasons. For example, the international markets specially supplied by Mingyuan, such as Australia, Canada and the United States, have been plagued by rising raw material costs, high profit pressure, declining foreign market demand and unstable shipping.

　　 In view of the impact of exchange rate changes on the industry, Ning Xue analyzed from four aspects: first, the price advantage weakened. Taking RMB appreciation as an example, RMB appreciation will bring greater pressure and challenges to small and medium-sized textile export enterprises. At the same time, it will increase the cost of textiles, and enterprises are bound to increase the quotation of export textiles in the international market. In terms of the product structure and characteristics of small and medium-sized textile export enterprises, their low-cost competitive advantage in the international market will be weakened. As a result, the export is restricted.

　　 Second, competition will become more intense. On the one hand, there are neighboring countries and other strong competitors producing and exporting similar products in the world, on the other hand, the competition among domestic textile enterprises will become more intense. Therefore, exchange rate changes also bring more challenges to the competitiveness of domestic textile enterprises.

　　 Third, SMEs will face difficulties. In China's textile export enterprises, small and medium-sized enterprises have a large base and are relatively weak in brand effect and marketing strategy, which makes some enterprises at a disadvantage in the fierce international trade competition.

　　 Fourth, the survival of the fittest. Small and medium-sized enterprises will not be able to further reduce the negative impact of the exchange rate through price changes. Of course, the powerful large textile enterprises with strong ability to cope with risks will be the final winner of this competition, so as to realize the optimal allocation of resources in the textile industry and promote the integration of China's textile industry.

　　 2. How to deal with the continuous change of exchange rate?

　　 In some recent media reports, the paper summarizes three ways for export enterprises to cope with exchange rate changes: one is to use RMB as much as possible for settlement. The second is to lock the exchange rate through hedging. Third, shorten the validity period of the price. These measures are also involved in different types of textile and garment enterprises.

　　 The reporter learned that the Dalian fanruike Garment Co., Ltd. headed by Chu Xuemei is a foreign trade company specializing in the production, supply and sales of men's wear, with an annual export volume of 20 million US dollars. She has far-reaching consideration in dealing with the change of exchange rate. At present, the international market is in the recovery stage of the epidemic, but orders in the next quarter are not active. She is worried about the possibility of international businessmen transferring production bases. She suggested that garment processing enterprises should try their best to consider the value at risk when negotiating foreign trade orders, and strive for pre-sale, and then seek SINOSURE.

　　 Shaoxing Zhongwei Textile Co., Ltd. under the leadership of Gao Jinghang is quite different in terms of scale and supply chain links. Zhongwei textile mainly focuses on various kinds of women's wear fabrics such as medium and high-end embroidery, digital printing, linen, Tencel, chiffon, etc., mainly focusing on European and American markets, radiating International markets such as Southeast Asia and Africa, and the foreign trade market sales volume reaches 5 million US dollars.

　　 For small and medium-sized enterprises like Zhongwei textile, the best way is to lock foreign exchange. Gao Jinghang said that in the case of frequent fluctuations in the exchange rate, it is relatively safe to lock foreign exchange in banks. In this way, on the day of settlement of foreign exchange, it is not based on the foreign exchange rate of that day, but according to the exchange rate previously determined.

　　 He further added that the future trend of the RMB exchange rate is still uncertain, "in my psychological expectation, with the US index going up, the RMB exchange rate will fall, and the rate will probably stabilize around 6.9."

　　 Ningxue's Yantai Mingyuan Creative Life Technology Co., Ltd. is an international famous supplier of creative fashion home textiles and healthy life solutions, and has established many famous brands such as "PHF", "David's home", "cloth making collection". Three design studios have been set up in China, Australia and the United Kingdom, raw material procurement bases have been established in Pakistan and Bangladesh, and three production bases have been built in Yantai, Jiangsu and Cambodia.

　　 As one of the three major terminal industries in the textile industry, the domestic textile industry has a relatively high degree of dependence on the international market layout and dependence, and home textile enterprises have unique understanding of the textile export market. Ning Xue said in an interview that to deal with the exchange rate changes, we should not only focus on the internal efforts of enterprises, but also form a consensus at the industry level.

　　 She shared her thoughts on four aspects: first, we should speed up the transformation and adjust the product structure. For example, we should actively improve the quality of export products and increase the added value of export products; Give full play to the advantages of small and medium-sized enterprises and take the road of differentiation and characteristics; It is necessary to carry out the research on the international standards of textile and health, and strive to achieve the "green product and safety certification" in the international market. Second, strengthen the construction of industry self-discipline organizations. Third, use foreign exchange instruments to avoid foreign exchange risks. In order to avoid the impact of exchange rate changes, enterprises should actively take financial preventive measures such as forward exchange trading, futures, options and swaps. Fourth, actively implement the strategy of "going out" and avoid barriers.

　　 3. Long term layout and simultaneous development of domestic and international markets

　　 In recent years, textile and garment enterprises, which have been plagued by the epidemic situation, are like riding on a roller coaster and facing many tests. Enterprises with strong vitality, high product quality and stable supply chain have realized transformation.

　　 With the emergence of new scenarios and formats on the demand side, those on the supply side have made rapid response. Recently, the foreign trade orders of China and Victoria textile have improved, not only because of the recent exchange rate changes, but also because of the changes in the supply chain ecology under the epidemic situation. Gao Jinghang said, "compared with the proportion of business in 2019, in recent years, the company's sales of running volume fabrics for the foreign trade market has decreased, but the demand for medium and high-end women's clothing fabrics is strong. The direct effect is that although the overall order size has not changed greatly, the profit margin has been improved."

　　 The gradual recovery of the use scenarios has led to the improvement of consumption requirements, and therefore, pan Ruike has grasped the opportunity in the predicament. Chu Xuemei said that Pan Ruike has experienced a lot of tests due to the epidemic in recent years. At present, the business in European and American markets has recovered to a certain extent. On the one hand, the frequency of social recovery parties abroad has increased, and the demand for customized suits has increased; On the other hand, with the wedding and other celebrations held abroad, people's demand for custom-made wedding dresses and suits has gradually increased.

　　 At the same time, the central government has put forward a new development pattern with domestic circulation as the main body and domestic and international dual circulation promoting each other, which points out the direction for export-oriented enterprises, and many enterprises focus on the domestic market. Gao Jinghang said that Zhongwei textile was established in 2019, and its positioning was very clear from the beginning. It mainly focused on European and American markets and radiated to Southeast Asia, Africa and other international markets. Before the epidemic, sales rose steadily, and orders began to decline in 2020. Therefore, it began to transform and focus on the domestic market, and its main business was to undertake orders from the live broadcast platform.

　　 Gao Jinghang laments that the orders in the domestic market are quite different from those in the international market. The characteristics of the E-Commerce orders in the domestic market are "fast", with large orders, short delivery time and fierce competition among the same industry. Everything is mainly to meet the terminal consumption demand. However, due to the high return rate, the account period and balance payment will be affected; In the international market, the delivery time of products is generally long. After the establishment of the cooperation relationship, the demand and orders of products are relatively stable. However, due to the superposition of factors such as the international situation and epidemic situation, the logistics situation is unstable and the risk still exists. At present, we should respond to the "double cycle" policy and make simultaneous efforts in domestic and international markets.

　　 Pan Ruike's domestic market layout is much earlier. It was founded in 2005, from OEM processing to advanced customization, from zero start to the establishment of large database, from offline customization to the launch of online "visual clothing and magic tools volume app". Its development path is the most appropriate way to expand, improve and improve at the same time. Chu Xuemei said that for clothing enterprises, creating a brand is a difficult but necessary road. Now its brand arugaw Noga has gradually opened its market in domestic and international markets such as Europe and the United States.

　　 "From the sales growth of various countries and regions, there is still a lot of room for improvement in the domestic market." Based on the future market structure of Chery, we will take the domestic market structure as the guidance.

　　 At the same time, more enterprises begin to polish their products in the buffer period. As a home textile enterprise, Mingyuan creative life chooses to actively grasp the development opportunity of "science and technology, fashion and green" in the industry, and constantly increases the research and development of functional and environmental protection bedding with high-tech content, and has launched a series of antibacterial bed products, warm bed products, deodorizing functional products, degradable fiber household products, cool feeling series products, quick drying products, etc Intelligent temperature control products. At present, consumers' satisfaction with Mingyuan's medium and high-end home textile products has reached more than 96%.

　　 Fanruike, a clothing enterprise, will pay close attention to the rigid demands of professional wear, formal dress for graduates, wedding dress, etc., and constantly improve and develop products with the functions of sustainable fashion, antibacterial, high elasticity and anti wrinkle, so as to meet the new needs of the current society.

　　 Zhongwei textile, a fabric enterprise, believes that the current situation is favorable, but the industry competition is also fierce. Therefore, it is necessary to polish products, stabilize quality, continuously carry out product R & D and innovation, form a joint force in production and sales, and enhance the core competitiveness of the enterprise.