The textile industry must actively respond to the pressure of *** appreciation

On July 20, *** reported a middle price of 6.4592 to the US dollar, again setting a new high after the exchange rate reform. Since the beginning of this year, as inflationary pressures have continued to increase, economic growth has slowed down. *** The exchange rate reached new heights, undoubtedly increasing the pressure on the operation of the textile industry this year.

*** Appreciation, in a sense, means that the export price competitiveness of Chinese textile products has declined. The relevant research shows that for every 1% increase in the value of ***, the sales margin of the textile industry will drop by 2% to 6%. If *** appreciation of 5% to 10%, the industry's profit rate will decline by 10% to 60%. Therefore, the appreciation of *** will have a major impact on China's textile industry, which mainly depends on exports.

The impact of appreciation on textile exports is mainly reflected in the following aspects:

The price advantage weakened. *** Appreciation will relatively increase the export cost of textiles. To maintain a certain profit, companies must increase the prices of their exports. In the case of SMEs, raising prices will inevitably weaken their competitive advantage in the international market. As a result, exports will be restrained and exports of textile products will be reduced.

The competition will become more intense. *** Exchange rate adjustments The biggest impact on textile exports is mainly large and low-grade textiles. This is the main product of small and medium-sized textile export enterprises, and the sales pressure on export products will greatly increase.

SMEs will struggle. China's textile exports are mostly small and medium-sized private enterprises. Due to defects in its own strength, brand effect, and marketing strategy, a considerable part of these companies will be in a clear disadvantaged position in the fierce international competition in the future, and will face the danger of being eliminated. Appreciation of the value of *** will significantly increase the labor cost of the company, so that the coastal textile companies will be forced to relocate to inland areas with lower labor costs, thus breaking the existing industry structure. This may be a more deadly blow to it.

The export efficiency of enterprises has been significantly reduced. *** After the appreciation, the price of export products expressed in foreign currencies rises. If the prices in the international market remain unchanged, it means reducing export profits. In fact, in order to maintain the original modest export profits, many foreign trade companies basically increase prices to cope with changes in exchange rates. However, most companies are not able to raise prices as they wish. It is difficult for foreign customers to fully bear the costs of renminbi appreciation by raising prices.

The author believes that the textile industry should speed up the transformation and adjustment of product structure under the circumstances that the appreciation of *** will have an adverse effect. In the industrial chain, it will rely on brand and technological innovation to enhance its own value, adjust its product mix, and actively upgrade export products. To increase the added value of export products, encourage processing trade to develop in the direction of deep processing and high value-added; to use **financial instruments to avoid ** risk; to actively implement the strategy of “going out”; to invest directly in international markets; set up factories and joint operations abroad; Plants, acquisitions of enterprises, establishment of trading companies and raw material bases, using various regional preferential arrangements to actively bypass trade barriers; while using existing resources, brands, and sales networks to expand market share, they actively enter the supply chain of developed countries And sales terminal, and with foreign manufacturers and retailers to form a complementary win-win relationship, cooperation and development, while maintaining a diversified market strategy, in the consolidation of the original Western Europe, the United States and other major export markets, should pay more attention to the development Emerging markets such as Central Asia, West Asia, Eastern Europe and even Africa, avoided by the concentration of markets The passive situation.