Enormous impact on Hebei textile industry export
Source: CTEI Date: 2011-09-19
Since August, RMB exchange rate against US dollar ushered a new age of 6.3, this has an enormous impact on the textile export of Hebei. Statistical Reports of Hebei Textile and Apparel Association for July suggested that once the RMB exchange rate against US dollar goes up for 1 percent, turns out that the export profit margin of Hebei textile products will edge down 2-6 percent. Hebei Textile Imp. & Exp. Co., Ltd said, to date, all the textile export orders are settled in US dollar, therefore, the appreciation of RMB goes higher, the greater loss enterprises will suffer from the profit margin. In addition, the costs of cotton, transportation and labor in domestic market are rising all the time, whereas the overseas orders remain the same prices, resulting in the edging down of profit of textile export. Some of the enterprises are even in the embarrassment of zero profit or deficit. In order to tackle with the changing exchange rate, some of the textile enterprises take only short term orders, so as to make fast delivery and get fast payment. Moreover, when there is frequent fluctuation of exchange rate, some of the enterprises sign the contract on a fixed exchange rate so that to share the possible risk with their business partiners.
Such embarrassment of textile export caused by fluctuation of the exchange rate revealed that Hebei textile export has the drawbacks like with low added value and low profit. The correlation person from Hebei Textile and Apparel Association said, Hebei is a significant province in China’s textile export, yet the exported products are mainly comprised of towel, blanket and clothing. Adjusting the product mix, eliminating primary products, rising the export volume of high-profit products should be a permanent solution for Hebei textile export enterprises to reduce the risk and keep a healthy development.
