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The impact of RMB appreciation on Chinese sanitary industry

2012-9-4 23:19:36

Ceramic industry is full of many unstable factors, of which the national macro-control policies and Europe China ceramic antidumping sanctions on the impact of ceramic industry is large, but the exchange rate to rise and inflation is to makeceramic enterprises very difficult days.

One, the RMB exchange rate continued high Tao Wei enterprise exports Limited

First of all we have to know what is the exchange rate of rmb. The exchange rateis also known as the "foreign exchange market or exchange rate". A country's currency exchange rate of the currency of another country, is a kind of currency expressed in another currency price. Because the name of money all over the world, not a value, so the currency of a country's currency to other countries toset a rate of exchange, namely exchange rate. And the RMB exchange rate is the exchange rate of the currency of another country.

The RMB exchange rate in 2011 continued to rise, the dollar against the yuanexchange rate has exceeded 6.6 and 6.5 mark. The continued appreciation of the RMB to export business greatly affected the domestic ceramic industry, the same can not be spared. According to relevant data shows, 2011 the majorceramic producing areas in 2010 year-on-year exports are about 30% of the growth, of which Shenzhen Qin Jiang ceramic cup, cup dish Coffee porcelainexport growth is higher than 50%. Although the export volume is significantly improved, but because of the RMB exchange rate higher, make ceramic single product gross margin declined by about 5%.

Two, the appreciation of the renminbi definition:

In China rate evaluation on the trend of RMB interpretation or more appropriate,that is to say the percentage spreads of two different currency deposits should be equivalent to the market expectations of exchange rate changes. The popularmeaning that is to say, Chinese money value, the appreciation of the Renminbiwith the most popular words is the purchasing power of the renminbi strengthen.In other words, you used a dollar can change 8.27 yuan, now only 6.77 yuan.

Three, the appreciation of the renminbi has the benefits of:

1, enhance China's purchasing power, foreign goods are sold to us seven,twenty percent off price. 2, similarly to our foreign investment or to buy foreign assets will be cheaper than before. 3, the renminbi appreciation would lead to aneconomic circles that the yuan will appreciate, resulting in a large number offunds into the China, this enough to offset the cost increase and reduce the amount of investment, but also greatly exceeded. 4, due to its advantage of low labor cost is offset by the appreciation of the RMB appreciation of the renminbi,also can promote the industrial structure China values into a main direction fromlabor intensive to high added. 5, the appreciation of the RMB can lay the foundation for RMB to the world, after the appreciation of RMB will give the people of the world to bring confidence, after the yuan as an internationalcurrency will be a natural thing. 6, improve social welfare directly, because the RMB purchasing power increase, the price will be reduced accordingly, 7, from the short-term effect is good. After all, in the same currency value, people canbuy many things. But in the long run, is not conducive to China's economic development. The most evident said in the import and export trade.

Four, the appreciation of the RMB has drawbacks:

1, the country's foreign exchange reserves with the appreciation, produce loss. 2,countries export products because of the appreciation of the renminbi is affected,is to export because of the appreciation of the renminbi, relative to foreignimporters concerned with increased costs, reduced the number of export.Because of China commodity labor cost is very low, 20 - 30% of the appreciation of the renminbi, will not be great impact on the competitiveness of the goods ofChinese. Can be said that exports are reduced due to the appreciation and the(not necessarily) by the recovery of foreign exchange volume filled withappreciation, China's foreign trade situation has not changed dramatically. 3, to affect China's labor export, very little impact on foreign investment (the same investment because of the RMB appreciation will increase the cost of the investment). 4, because of the appreciation of the renminbi, to enhance the purchasing power of the renminbi, will lead to increased imports, reduce the trade deficit. (this is what we need.) 5, the banks bad debts increase, bring the unemployment problem, FDI (foreign direct investment) decline in rural area,deflation, weaken the foreign yuan, China commitment to WTO is difficult to achieve, and then bring the Southeast Asia financial instability, and the Asianeconomic slowdown. 6, the yuan appreciation will curb China's exports. The main exports of our country is America. In recent years America belongs to the trade deficit. Appreciation will slow down the. Relatively speaking, the rise of Chinamonetary value will stimulate the imported to china.

Five, Sanitary ware enterprise must determine the direction of orientation

 China's ceramic tile brand more than 5000, in the market has a certain well-known ceramics enterprises over 2000 homes. Chaozhou as Chinesedaily pottery, ceramics production accounted for 50% of the country, gathered more than 45% ceramic brand market. However, the current domestic ceramicindustry ranked the top ten brands, the highest market share of less than 8%. In this regard, the industry said, the situation of low concentration degree ofindustry, will provide a huge development space for the innovation of corporate brand positioning high-end, growth speed.

Although China is a ceramic producing countries, production first in the world, butnot a ceramic powers. Products mainly to middle and low, low added value, in the international market price is not high, a fraction of the price of similar productsonly Italy, Spain and other ceramic power. Ceramic overcapacity, oversupply,companies compete for market, compete to lower prices, the industry profit level continues to drop. Enterprises lack the capability of independent innovation,product homogeneity serious, leading to the international market competition ability is not strong. Ceramic industry production has obvious regional characteristics, in the past mainly concentrated in Guangdong, Jiangxi,Shandong, Fujian and other provinces, but in recent years has been spread all over the country. As the business continues to expand, expanding production lines, expanding the total production, resulting in a serious surplus production capacity, supply and demand out of balance, the region also caused serious pollution, the exhaustion of resources problem. And the northwest, northeast,Inner Mongolia and other regions, subject to the overall economic level, despite the resources, but the overall level of ceramic industry.

In the context of global economic integration, facing the severe internationalfinancial crisis, foreign anti-dumping, the exchange rate higher, how to gain the maximal economic benefit, but also the rational use of resources, reduce energy consumption, reduce pollution to the environment, so that the industrysustainable development, China's ceramic industry need to solve the problem. In 2012, the ceramic industry must firmly determine the direction, the orientationfactors of uncertainty.

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