Shoe leather also needs high-tech digitization

On December 31 last year, one euro was equal to 9.7971 yuan; on May 20 of this year, one euro was only equivalent to 8.4598 yuan. According to this calculation, since the five and a half months of this year, the appreciation of the renminbi against the euro has exceeded 10 percentage points.

Sichuan companies are concerned that the continued devaluation of the euro will cause the just-recovered exports to the EU to shrink.

Low-end industry

The textile industry is sad

“We have to lose 45 yuan per pair of shoes.” Looking at the exchange rate offer, Li Ying, Chengdu Aimin Footwear Co., Ltd., said that the settlement rate that was locked when signing contracts with customers last year was 9.8, and now the euro continues to “shrink”. The cost pressure is too great.

Wang Yu, general manager of CITIC Bank International Department, said that for companies that settle in euros, they must first calculate the US dollar in renminbi and then exchange the US dollar for the euro. There are two exchange rate risks. The exchange rate of the Euro against the US dollar continued to fall. Even the new exchange rate of one euro against the US dollar of 1.2144 was the lowest in nearly four years. It is not ruled out that there is still a possibility of a new low.

The export companies of the two types of industries are very sad. In the low-end textile industry, processing and manufacturing industries and other labor-intensive industries that have basically no product pricing power, these companies have a very low profit, and there is no room for price adjustment.

Exports of large-scale mechanical and electrical equipment under contracted foreign projects were most affected by the depreciation of the euro.

Long-term plan

Adjust the industrial structure as soon as possible

Liu Xin, deputy director of the Provincial Department of Commerce, said that with regard to cost, Sichuan’s advantage is less than that of some emerging countries. On the market, the space for “always goods” will become smaller and smaller, but new products, products with independent brands, and key core technologies Products are not affected by the depreciation of the euro. Therefore, the long-term solution to the challenge is to adjust the industrial structure as soon as possible.

According to figures, from January to April, 356 high-tech enterprises in our province that had actual import and export performance increased compared with the same period of last year, and a number of transfer companies such as Tianwei New Energy, Sols Optoelectronics, and Mianyang Pusi experienced substantial growth in exports. At the same time, textiles and garments, plastic bags and other industries have exponentially increased their exports—a pair of leather shoes costing 280 Euros. Ai Min's children's shoes are still popular in Germany and France. On May 27, Ai Miner’s first store in Vietnam was in Hanoi. After opening, many dealers placed orders for a pair of leather shoes worth 4,000 yuan, indicating that high-end products are very popular.

Many companies believe that instead of using homogenized products to squeeze the market, it is better to speed up the adjustment of the structure and use the high value-added products to grasp the market discourse. At present, the garment processing industry has shifted to emerging markets. Sichuan, where the industry chain and industrial workers are more mature, has taken the opportunity to “get cages for birds” and vigorously develop “smile curves” at both ends – high-end industries and high-end industries.

Wen Duoming, general manager of Suining New Oasis Printing & Dyeing Co., Ltd., said that direct exports are 20% higher than domestic processing profits. Last year, they declared to the country that the apparel fabrics led the industrial upgrading project, and invested 30 million yuan to carry out technical reforms. Invest 1 million yuan to develop overseas markets. During the depreciation of the euro, their products were in short supply. Ai Min'er handed Italian and German industry R&D institutions, and the two foreign teams participated in Aimin's R&D and quality control of European products. From January to April this year, the company achieved exports of US$7.31 million, a year-on-year increase of over 30%. Strive to adjust the product structure of Chengdu Adidas Trading Co., Ltd. and the Provincial Textile Co., Ltd., from January to April exports doubled.

The road to transformation is different, but in the end it all reflects industrial upgrading. After the "Winter Training", the internal motivation of these companies has increased.

solution

Choose to settle in RMB

The country will expand the scope of trials for RMB cross-border settlement. Wang Yu revealed that Sichuan has been shortlisted and is likely to be implemented by the end of this month. The company is expected to use RMB to settle with foreign companies in the future to reduce exchange rate risks.

China CITIC Bank predicts that the appreciation of the renminbi will be controlled between 0-2% this year, which is relatively stable. Export companies choose RMB settlement to avoid exchange rate losses. However, judging from the previous four pilot areas, since RMB is not an internationally freely convertible currency, the scope of enterprises to handle RMB settlement business is limited. "The main thing is to look at the foreign acceptance of the renminbi." Wang Yu said that Hong Kong and Macau and Southeast Asia are more interested in renminbi settlement.

At present, the most realistic problem for companies is to choose a more stable currency for settlement, or deploy multiple currencies to spread risks.

For companies that have passively chosen the euro to settle foreign exchange, Wang Yu suggested that it could look for a high point in the euro's "price cut" trend to lock forward exchange rates and minimize losses.