Textile Enterprises In Shaoxing: Floating Exchange Rate Of RMB Against The US Dollar Leads To The Relocation Of Textile Factories To Foreign Countries

In recent years, the exchange rate of RMB against the US dollar has been rising, and some export-oriented in Shaoxing.

During the interview, it was learned that exchange rate fluctuations would cause certain exchange gains and losses for international trade because of the US dollar settlement.

In addition, with the increase of wages and raw material prices, the annual production cost of enterprises has increased by about 15%. Wang said that in the face of severe internal and external situation, some orders may lose money. "At the beginning of this year, we had to pfer a large order which accounted for 30% of the company's export volume to a textile enterprise in Vietnam."

Textile is also one of Vietnam's main industries. Since last year, Vietnam's currency (Vietnam currency) has been devaluing greatly, making local textile exports cheaper. So many international buyers who are concerned about China have been looking at these emerging countries. This has aggravated the severe situation of Shaoxing's textile exports to a certain extent.

"We are going to build a production base abroad. The project has already been talked about."

Manager Wang said Vietnam has a lot of temptations.

According to the data provided by the Shaoxing Municipal Bureau of Commerce, over the past 5 years, 453 new overseas investment enterprises have been newly approved in the city, of which only 84 have been newly approved overseas investment in 2011 alone.

It is understood that Shaoxing's overseas investment is mainly in Southeast Asia, Africa, the United States and other countries and regions.

What benefits can enterprises bring to overseas?

"The most immediate benefit is mitigation.

We should disperse the risks of business operation and enjoy preferential trade policies established by developed countries in Europe and the United States and some developing countries, as well as preferential policies provided by host countries.

When it comes to the advantages of overseas factories, Yue Mei Group is responsible.

As a banner for Shaoxing textile enterprises to "go out", in 2007, the United States Group invested 50 million US dollars, and established the first textile industrial park outside China in Nigeria. In January last year, it bought the state-owned Cotton Corp in the African Republic of Mali.

"Vietnam, for example, can build all kinds of comprehensive textile factories or export-oriented ones.

The production base of the fabric with an annual output of 350 million meters has not only effectively evaded the anti-dumping policy, but only half of the domestic wage level has also reduced the cost pressure of the enterprises.

"Shaoxing's economy is relatively extroverted, and entrepreneurs know more about the outside world, so that they can seize business opportunities in time."

Chen Yifeng, deputy director of the Shaoxing economic and Trade Bureau, said: "in the context of the economic downturn in Europe and the United States, the introduction of foreign capital will shrink in the long run, and it will be an inevitable trend to go out and invest abroad directly, seize the market and resources, avoid trade barriers and shorten the supply chain."

According to the trend of international economic development, when a region's per capita GDP reaches US $1000, trade will enter a stage of rapid development, reaching US $2000, which is the golden period to attract foreign investment. When this figure reaches US $3000, enterprises need to expand outwards on a large scale. "Obviously, many Shaoxing textile enterprises already have the conditions and timing for large-scale outward expansion."

Despite the expansion conditions, the industry has warned that enterprises should "go out" should act according to their capability and should not blindly follow suit. "Overseas factories are not only simple capital investment, but also need to invest in overseas management experience, including understanding of local culture, laws, auditing, FTA agreements, etc., and will also be affected by uncertainties such as overseas political risks."

At the same time, it is necessary to choose "Habitat" according to the characteristics of the industry. For example, it is not appropriate for textile enterprises to set up factories in Singapore, because the local population is small, the living standard is high, the demand for textile products is small, and the cost of running factories is relatively high. "We should turn our attention to some developing countries such as Vietnam, Kampuchea and South Africa."