RMB depreciation is good for exports
On September 13, the central parity rate of RMB against the US dollar was 6.8928, an increase of 170 points; the central parity rate of the previous trading day was 6.9098, the closing price of the previous trading day was 6.9192, and the previous night closing price was 6.9299.
Since the beginning of the year, against the background of the continued strengthening of the US dollar index and the divergence of monetary policies between China and the United States, the RMB has continued to depreciate against the US dollar, reaching the highest level in the past two years. As of September 12, the RMB depreciation rate during the year was 9.19%. In the past three months, the RMB depreciation rate reached 3.88%.
Changes in the exchange rate of the US dollar against the offshore RMB since 2019
For the textile industry, the depreciation of the RMB is beneficial to foreign trade exports. Under the same export price, if the RMB depreciates and the final accounting profit is converted into RMB, more RMB can be obtained. Assume that 6.5 RMB could be exchanged for 1 U.S. dollar before. After devaluation, 6.9 RMB would be needed to exchange for 1 U.S. dollar. Then if we export 1 million yuan of goods to the United States, we can save 40,000 US dollars. Therefore, the depreciation of the RMB is beneficial to exports.
Coincidentally! Recently, a friend of the editor encountered such a thing. He is engaged in foreign trade exports. In August, the foreign exchange settlement was delayed due to some things. He didn’t have time to settle the foreign exchange until recently. But in the end, he found that he had gained more than 50,000 yuan in one month. In less than a month, there is a difference of tens of thousands of dollars!
Ocean freight rates cool down, export orders may increase
What’s even more gratifying is that the “high fever” of sea freight has finally cooled down! It is obviously the peak season for the industry, but there has been a sharp decline. It is really surprising and surprising!
Last year, in the booming shipping market, it was hard to find a box or a cabin, and the freight rate on the East-U.S. route even reached a “sky-high price” of over 20,000 US dollars. Today, the average cost to ship a 40-foot container from China to Los Angeles and Long Beach is about $5,000, down about 72% from 2021.
Looking back on 2021, due to the impact of the global epidemic, supply chains have been disrupted, containers at ports have stagnated, and demand for goods has soared, causing importers to scramble to load containers onto ships, resulting in an abnormal situation of difficulty in finding a container and high sea freight. situation. At that time, many clothing terminals were unable to bear the high shipping costs and canceled orders. This is also an important reason why the foreign trade market has been cold from last year to the first half of this year. Now that sea freight rates have returned to normal, orders that were not placed last year may be re-placed, as well as those orders that were previously transferred from China to other countries due to high freight costs may also return.
China’s advantages highlighted, orders from Vietnam return
Vietnam, the world’s factory, has recently encountered an “order shortage”. Since the second half of the year, many Vietnamese manufacturing factories have received significantly fewer orders. In addition, the rapid expansion of production lines and recruitment in the previous period has resulted in many factories now having to reduce production hours and arrange for workers to take turns to take vacations.
An important reason for Vietnam’s “order shortage” is the impact of reduced orders from the United States and Europe, but it is also due to the return of some orders to China. On the one hand, for the entire industrial chain, the domestic industrial chain is naturally more mature and complete than that of Vietnam. On the other hand, in terms of product types, grades, quality, etc., domestic products have more advantages. With the recovery of the global economy, residents’ mentality in purchasing clothing has changed again. The economy is in recession and global funds are tight. Residents only care about cheapness when buying clothes. But after money is loose, they are more interested in pursuing fashion, quality and class. Therefore, the domestic competitive advantage has once again been highlighted, and the current domestic foreign trade orders have well confirmed this.
Foreign trade orders are gradually released, growing steadily
Since the beginning of June, most of the orders received by downstream weaving and trading terminals have come from abroad. Compared with the domestic and foreign trade markets, the foreign trade market conditions are more prominent. Until the current traditional “Golden Nine” stage, from the perspective of unit volume, foreign trade orders are still the majority, and domestic sales have always been weak. Recently, many foreign trade export companies have stated that they have received orders worth several million, while many domestic sales companies are still following the “small batch, high batch” model.
It is enough to see that with the three major positive factors of RMB depreciation, cooling of sea freight, and return of orders from Vietnam, the foreign trade market in the second half of the year is even more promising! According to statistics from the General Administration of Customs, the export volume of clothing and clothing accessories in August was US$18.486 billion, a year-on-year increase of 5.04% in August. August is the traditional off-season, but clothing export data is still growing, which also illustrates the good recovery of the foreign trade market. Judging from the current order situation, the growth of orders can be seen in the traditional peak seasons of September and October. In addition, the “Christmas season” is also a very important node, which also has a certain impact on orders.
</p
