The appreciation of the renminbi is an inevitable trend, and the increase in the number is another matter. But no matter how much it rises, it will put pressure on China's foreign trade enterprises. How to deal with the appreciation of the renminbi has become a strategic issue that foreign trade companies have to seriously consider.
The G20 Finance Ministers and Central Bank Governors Meeting was held in Washington on April 23, 2010. Many large international funds rushed to sell the US dollar before the G20 Senior Officials Meeting. The appreciation of the renminbi may be under pressure.
The appreciation of the renminbi, no matter how much it rises, will put pressure on China's foreign trade enterprises. On March 21, 2010, Minister of Commerce Chen Deming said in an interview with the Washington Post reporter that the average profit of Chinese export enterprises was only 1.77%, which means that the RMB will only appreciate a little bit against the US dollar. The profit is lost, there is no profit, how can the company continue to "play"? ! Even if the profits of some foreign trade companies may not be as low as the average profit margin mentioned by Minister Chen, they cannot withstand the pressure of RMB appreciation.
How do foreign trade companies cope with the pressure of RMB appreciation? There are three ways to deal with inertia thinking: First, increase production and sales. However, in the context of the global overcapacity, this type of effort will be ineffective, because when everyone adopts this approach, competition will inevitably become more intense, and as a result, profits will be further reduced. The second is to reduce production costs through “process reengineering†advocated by some people. But the effect of this approach is questionable because “process reengineering†not only costs a lot of money, but also risks that it may not only fail to achieve the desired results but “process chaosâ€. The third is to develop differentiated products. This is indeed a good choice, because at least in theory, developing differentiated products can increase profit margins and sales opportunities. However, this article will be better in the following scenarios.
I believe that the better way for foreign trade companies to cope with the pressure of RMB appreciation is to start domestic marketing. Foreign trade enterprises already have certain product design capabilities, manufacturing capabilities and already have good supplier resources in specific industry sectors. Even if there is no pressure for RMB appreciation, they should consider using these capabilities to develop the domestic market. Developing the domestic market will help strengthen the R&D capabilities, production capacity and supplier relationships of foreign trade companies, which in turn will help foreign trade companies to do a better job in foreign trade.
I want to say that if foreign trade companies are determined to open up the domestic market, it means that they will make up their minds to develop the products needed in the domestic market. If the enterprises obtain such products and then use them for export, they may win better. Profit margin. This is another response to the appreciation of the renminbi.
The third is to gain an experience advantage.
Many foreign trade companies are obsessed with ultra-low-profit export business and are not willing to do domestic sales because they lack experience in domestic sales. In fact, experience can only be established in the process of action. Foreign trade enterprises do domestic sales. Although there are experience obstacles, such obstacles can be gradually obtained in the process of doing. Once the experience of domestic sales has been established, foreign trade companies have added a “brush†to deal with export risks. With this "brush", it increases the ability to respond to people's appreciation.
Double Side Cosmetic Mirror,Mirror Shaver Wall Light,Suction Cosmetic Mirror
Ningbo York Arts &Crafts Co.,Ltd , http://www.york-mirror.com