RMB Makes The Foreign Trade Business Of Chengdu Shoe Enterprises Difficult

Receiving orders, OEM and delivering goods to dealers are the basic forms of foreign trade chosen by Chengdu footwear exporters. Their profits are realized by selling their products into dollars for export and then converting them into RMB. With the sharp appreciation of RMB, on the one hand, the price advantage of Chengdu's shoe products export is getting smaller and smaller; On the other hand, the earned US dollars can be converted into less and less RMB. Like Zhou Zhonglin, the "Aishen" shoe factory under Deng Ai's helm now earns 1.5 yuan less for every pair of shoes produced. Since last June, the factory has earned 30000 yuan less every month. Combined with salary, tax and other factors, the average monthly income decreased by 10%. "Foreign trade is becoming more and more difficult." Deng Ai said that in recent months, they have been afraid to accept orders rashly. Last July to September, the factory signed less orders worth 300000 dollars. At the same time, in order to prevent the loss of personnel, they have to pay money to maintain production. As a result, he had to consider giving up some foreign markets, and the proportion of domestic sales increased from less than 20% of the total sales in the past to 50%. At the end of last year, Deng Ai opened his own product stores in Deyang and Mianyang, with a total investment of 1 million yuan. But in the face of the same fierce competition in the domestic market, he said that it was difficult for him to see the future, and he had to cross the river by feeling the stones. In terms of export, in order to reduce losses, he has negotiated with customers to make price adjustment once a month according to the change of exchange rate. In the face of appreciation, enterprises should do the following: "The increase in capital costs and income caused by the appreciation of the RMB will change China's economic structure in the long term, re endow industries with different growth rates, and differentiate the performance of enterprises in different industries." Li Wei, a professor at the School of Business Administration of Sichuan University, said, The impact of RMB appreciation on export products is self-evident. As a manufacturing industry and a traditional industry, the footwear industry is facing more challenges. Compared with other types of products, footwear products have a high degree of dependence on foreign countries. Enterprises should sign short-term contracts with customers and add relevant provisions on RMB appreciation to the contracts. If the RMB appreciates to a certain extent during the supply period, the price will be readjusted. In addition, export enterprises can also make full use of modern financial instruments to avoid the risk of exchange rate fluctuations.