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Does Foreign Exchange Reform Have Little Effect On Shoe Companies?

2010/7/24 13:33:00 69

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When we discuss the negative effects of RMB appreciation on the employment of export oriented enterprises, we may as well recall the history. In fact, the appreciation of the renminbi in the past did not harm China's exports and employment. The renminbi has appreciated 17.5% against the US dollar since its decoupling from the US dollar in July 2005, but China's share in the US import market has continued to expand, even after the outbreak of the financial crisis.

CICC analysts pointed out that China's exports were not affected.

RMB rate

The significant impact is partly due to the fact that China's exports contain much of the import of intermediate goods.

At present, the market is worried that even if the RMB is only gradual appreciation, the export of some low profit labor intensive industries in China will collapse, causing a large number of workers to lose their jobs.

But the recent experience of Chinese clothing and footwear exporters shows that these worries are unreasonable.

The main competitors of Chinese clothing and footwear export enterprises in the US market are from Mexico.

In 2009, China's share of clothing and footwear market in the United States was 46%, while Mexico was 37%.

Although the renminbi has appreciated all the way since the Mexico peso in 2000, China's share of the textile and clothing market in the United States has risen from 21% in 2000 to 48% in 2009.

After the outbreak of the financial crisis, from September 2008 to March 2009, the yuan appreciated 39% against the peso in Mexico, which led to a substantial increase in the cost of Chinese export enterprises relative to its competitors.

The share of Chinese exporters in the US clothing and footwear market actually dropped from 46% to 42%, but as the renminbi stabilized against the Mexico Peso exchange rate, the market share of China's export enterprises rebounded rapidly, even higher than the level before the renminbi appreciated substantially.

Besides,

exchange rate

Floating makes the export shift from simple processing to deep processing and finishing, elongating the production chain, refining the division of labor and increasing the number of jobs.

In particular, the exchange rate helps to optimize the allocation of resources between the trade sector and the non tradable sectors, and is currently conducive to the shift of employment to the service sector.

At present, the proportion of China's third industry in the national economy is still low, and accelerating the development of service industry will absorb more employment.

To sum up, further advance
匯改對出口和就業(yè)的影響利大于弊。我們將積極穩(wěn)妥地推進人民幣匯率形成機制改革，積極創(chuàng)造有利條件，引導企業(yè)加強結構調(diào)整，發(fā)揮好匯改在提升對外開放水平、促進就業(yè)方面的積極作用。