Two Percent Appreciation Leads To 2.5 Bil Export

     Two Percent Appreciation Leads To 2.5 Bil Export

    Beijing, CNCotton:RMB appreciation will exert direct impact on China's foreign trade. If no other changes occurs, China's export growth will decline 1.5-2% and import growth will accelerate 0.2-0.5% as a result. Theoretically, yuan appreciation will benefit those industries with huge import, scaled overseas debt, highly floating capital flow or huge asset while give a serious blow to export oriented sectors, industries of massive foreign asset and those products that is priced internationally.

    RMB appreciation means a weaker competitiveness of Chinese export products. Thus, export-centered industries will inevitably suffer certain loss. The textile industry will lose 2.5 bil U.S. dollars.

    Textiles, apparel, footwear, hosiery are the second largest export industries next to telecommunication industry in China with a 51% dependence on export. What's more, ever-expanding world share of these products were achieved at the sacrifice of cheaper labor cost and lower export prices. This way, RMB appreciation will undermine the competitive edge of China's textile and apparel in the world market substantially. An increase of 2 percent in RMB rate will lead to a loss of 2.5 bil U.S. dollars and a decline of 3.5 percent in industrial growth.

    Comparatively, MMF manufacture will receiver a minimal negative impact as import costs are lower, but apparels will suffer great loss due to high dependence on export market. Under the circumstances of narrowed profit margin, many products will turn to domestic market to intensify the competition.

 

(2005-7-29)

【 关闭窗口 】