Textile And Garment Enterprises Fear Signing &Nbsp, Only Because Of The Appreciation Of RMB.

Enter September, due to

Since mid September, the central parity of RMB against the US dollar has risen by 69 basis points to 6.7181, which is the fifth consecutive trading day of the yuan against the US dollar, which has hit a new high since 2005.

Many agencies predict that the trend of RMB appreciation is expected to continue in the future.

Judging from the current situation, the appreciation of RMB has increased the cost and quotation of China's textile and clothing, thus, to a certain extent, it has lost the low price competitive advantage of our products in the international market, and exports will be restrained.

Some bargaining power enterprises can shift part of the appreciation pressure through the price increase, while the uncompetitive enterprises will be the first to be hit.

Previously, authoritative estimates said that the clothing industry accounted for 55% of the cost of raw materials. According to statistics on industry related indicators, the average gross profit margin of cotton textile was 14%.

The garment industry's deep processed products, because of the more labor force value and obvious comparative advantage, are more than 15% lower than the international similar products, so the bargaining power is stronger.

However, the clothing industry's dependence on exports is 60%, and the clothing industry is the most heavily damaged, with a 1% appreciation of the renminbi. The overall damage rate of the garment industry is 6.18% of the industry's profit margin.

Therefore, the industry generally expects that the export recovery of textile and garment industry will slow down in the fourth quarter of this year.

In the first 8 months of this year, textile and garment exports maintained a relatively high growth rate, driven by rising demand and rising prices.

In the first 8 months, textile and apparel exports totaled $129 billion 804 million, an increase of 23.75% over the same period last year.

Among them, the total exports of textiles amounted to 49 billion 515 million US dollars, and clothing exports totaled 80 billion 289 million US dollars, with a growth rate of 32.29% and 19.02% respectively.

However, the rapid recovery of exports is not sustainable. The growth rate of textile exports in August has declined. This shows that the boom in global textile and garment production has declined due to the shrinking demand in Europe and the United States, which will affect the overall growth of domestic textile and garment exports in the coming months.

However, as the production orders of export enterprises are already in the three quarter, the export growth of the three quarter will still be guaranteed, but the reduction of orders will affect the export volume in the four quarter.

As the growth rate of the first half of this year is large, it is expected that the export of textile and clothing will increase throughout the year.

Although the future prosperity of the textile and garment industry is good for the industry, the rising cost of raw materials and labor has made the cost growth of textile and garment enterprises far exceed the income growth rate, especially the profit margins of small and medium-sized enterprises are shrinking.

If the RMB continues to appreciate, more and more enterprises will be eliminated, and the appreciation of the renminbi will also lead to the passive adjustment effect of the textile industry. The appreciation will form a forced mechanism for the enterprises. If the enterprises do not carry out industrial upgrading and structural adjustment, they may be eliminated, and the industry will also reshuffle.

However, in the long run, in order to fundamentally enhance the core competitiveness of China's clothing industry in the international market, seize the current favorable development trend of China's economy and make use of the large balance of payments surplus, and make a structural adjustment to the textile industry, we must say that it is a good thing that outperforms the disadvantages.