Currency moves may imperil textile firms
BEIJING: Half of China's textile companies risk going to the wall if the yuan appreciates 5 percent against the US dollar, an industry lobby group warned. China National Textile and Apparel Council Vice-President Gao Yong attributed this knife-edge existence to the industry's thin profit margins of around 3 to 5 percent "If the yuan actually appreciates 5 percent against the US dollar, over half of China's textile companies will go bankrupt," Gao said. The government's yuan stress test, conducted in March, showed that labor-intensive textile companies' profit margins would decline by 1 percentage point if the currency appreciates by 1 percent. More than 20 million people are directly employed in China's textile industry, while a further 140 million are involved in cotton farming, according to the Ministry of Commerce. Therefore, a large upward revaluation of the yuan could cost millions of jobs. The appreciation of the yuan, together with rising raw material and labor costs, has already squeezed profit margins in China's textile industry. The yuan rose 21 percent against the US dollar from 2005 to 2008. "This has made Chinese textile products more expensive, thus the price advantage has almost vanished compared with textile products from Vietnam, Indonesia and other Southeast Asia countries," said Zhang Bin, an analyst at Sinolink Securities. "Since Chinese textile companies are facing rising labor costs after labor discontent at Foxconn, further appreciation of the yuan will make the situation even worse," he said. However, analysts said yuan appreciation would also stimulate industry upgrading and integration in China's textile industry. Qiu Yafu, secretary-general of China National Textile and Apparel Council and president of textile manufacturer Shandong Ruyi Group, said that the only textile companies who could survive the current "brutal" environment would be those that attach great importance to industry upgrading and technology innovation. "Shandong Ruyi Group will stick to high-end lines and make every effort to improve the international competitiveness of its textile products," he added. About Author We are very professional supplier of selling Nike shoes such as Nike or more AirShox,AirMax,Air Jordan,Air Force 1 and so on, We offer grade A quality product only. Our products are authentic quality with original box.And all products displayed on our website are available and have stocks here. We offer very special prices to our customer (price depends on your quantity).Very fast and safety delivery by TNT, DHL OR EMS, we can delivery within 24 hours upon receiving your payment. It is very safe door to door service, never get problems with customs. If you have any questions, please feel free to contact us. We accept small orders! Thank you very much ! fail information, please kindly visit our website: www.footwearfile.com www.yannikeshoes.com www.pickfashion.com Disclaimer: Article submitters are solely responsible for the content of their articles. ArtiLib can't be held liable for the contents of the articles. Report Abuse | Browse By Category |
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