Exporters suffer from yuan´s appreciation

The appreciating yuan is also impacting Chinese exports. It's estimated that exporter profits drop 2 to 6 percent for every one percent appreciation of the yuan.

The appreciating yuan is also impacting Chinese exports. It's estimated that exporter profits drop 2 to 6 percent for every one percent appreciation of the yuan.(CCTV.com)

Prices for China's exported textiles have risen since last year, on the back of an appreciating yuan. But export volumes have slowed down.

Statistics show that in the first two months of the year, textiles exports increased just nine and a half percent from the same period last year.

Sun Huaibin, Director of China Textile Economy Research Center said Our exports to the US are decreasing.

Chinese textile exports to the US have slowed down, affected by the weakening American economy. Plus, some US firms have begun moving to other countries, like Vietnam and India, to take advantage of the cheaper labor costs there. This has put some Chinese companies in a hard situation, prompting some to shut down.

Lu Tianlin, Chairman of Wuxi Association & Union of Textile Ltd. said We only have 60 workers now. We had 120 in the past. We plan to shut down.

Sun Huaibin said For the majority of our products, they don't have their own brands; they are mainly produced for other brands. Obviously, their profits are shrinking.

Some companies have begun reorganizing in an effort to adjust to the severe export conditions.

Gu Haidong, Manager of Hongdou Group said We're focusing on adding new designs. For example, we promoted 15 kinds of products at a trade fair in January. 12 of them were reserved.

Companies said they can better control their pricing by designing products themselves. The profits are also higher than with their usual assembly business.

In addition, to reduce production costs, some textile firms have begun thinking about going abroad. Some have set up new factories overseas.

Qian Wenhua, Deputy Director of Foreign Affairs of Hongdou Group said Our factory will move to Cambodia this year. The cost of labor is cheaper than here. For example, the minimum wage is about 800 yuan here. In Cambodia, it only costs 40 US dollars.

Experts say the revaluation of the yuan gives the country a good opportunity to restructure its economy and address its trade balance.

Source: CCTV.com