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No real "warm sun" in cotton market

2016-03-08 14:50:17

In the middle of last month, the people's Bank of China, without any warning in advance, suddenly lowered the central parity rate of RMB against the US dollar by 1000 basis points to 6.2298, which is  only a one-day drop since the official  market exchange rates of RMB were combined in 1994, but also a new low since April 25, 2013. A stone stirs a thousand waves. The active devaluation of currency is often regarded by traditional economists as a "lifesaver" to improve a country's export industry.

For many years, the cotton textile industry has a false proposition that misleads investors, to the effect that devaluation of currency is conducive to the export of downstream textile  clothing industry, which will increase the export order volume,  then increase the use of cotton  cotton yarn. With the increase of demand expectation, the price of cotton  cotton yarn will rise, which makes the whole industrial chain prosperous. This dose of "ecstasy soup" really stuns many academic schools. However, the author thinks that looking at the present time is  the same thing.

"Devaluation of RMB is conducive to increasing the export price of textile  clothing? ha-ha! In fact, you think a lot. " This is an original saying that the head of a domestic textile export enterprise said in a conversation with the author. China's textile industry is located in the middle  low-end level,  it has only price advantage but no other core technology advantage to compete with other countries. Therefore, for a long time, the domestic textile industry has  only made extremely low profits, but also become the synonym of "sweatshop". It is understood that the enterprise received an email  foreign businessmen a few days after the sharp depreciation of the exchange rate of RMB against the US dollar in the middle of last month, asking for a 2% reduction in the price of the next batch of orders. If it disagrees, it will send the orders to Vietnam, Laos, Cambodia  other low labor cost countries. Enterprises can only be forced to accept the demands of foreign businessmen.

"I am a fish  a prey. In the absence of technical advantages  in the context of price competition alone, we can only breathe in the vicious circle of "no low, only lower" The person in charge of the above textile enterprises sighed. In essence, the benefits of devaluation of RMB have been taken away by foreign businessmen. Chinese textile enterprises still can't enjoy any benefits. They still need to work hard to earn that small amount of hard-earned money.


Add:Fengtian Economic Development Zone, Fengxin County, Jiangxi Province, China