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Likely RMB appreciation troubles clothing exporters
09 Jun '10
1 min read
Recently, the 'Seven Wolves' brand, which is reputed for high-end shirts, signed contracts with agencies in Europe and the United States, to access and penetrate these markets.
Chairman of Seven Wolves, Zhou Shao Xiong says that the move would allow Seven Wolves to realize deeper access to international fashion markets of these two regions.
The only negative factor that Xiong foresees is the exchange rate war between the US and China which has brought great pressure on clothing export companies.
The same sentiment is echoed by a number of exporters who say that the pressure will be great if the RMB appreciates by more than three percent.
According to them they work on margins between 3-5 percent and if RMB appreciates even by three percent, their profits will be wiped out and it will become difficult to sustain.
And if the RMB gains by five percent, most of them will have to wind up their factories as it will not be possible to run them due to the losses they will incur.
Chairman of Seven Wolves, Zhou Shao Xiong says that the move would allow Seven Wolves to realize deeper access to international fashion markets of these two regions.
The only negative factor that Xiong foresees is the exchange rate war between the US and China which has brought great pressure on clothing export companies.
The same sentiment is echoed by a number of exporters who say that the pressure will be great if the RMB appreciates by more than three percent.
According to them they work on margins between 3-5 percent and if RMB appreciates even by three percent, their profits will be wiped out and it will become difficult to sustain.
And if the RMB gains by five percent, most of them will have to wind up their factories as it will not be possible to run them due to the losses they will incur.
Fibre2fashion News Desk - China
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