Weakening Japanese yen impacts Chinese textile exports

03 May '13

2 min read

The weakening of Japanese currency against Chinese yuan is impacting Chinese textile suppliers and traders, who are already exporting to Japan on meager profit margins.

Over the last six months, Japanese yen has weakened by more than 20 percent against the Chinese renminbi. One Chinese yuan was traded at 12.84 Japanese yen on November 3, 2012. The exchange rate was 13.92 yen on December 31, 2012 and as on May 1, 2013, the rate was 15.92 yen for one Chinese yuan.

As a result, some small-scale suppliers and Japanese buyers who were unable to withstand losses have exited from the market.

Meanwhile, large-scale suppliers in China and traders in Japan are also feeling the pinch due to declining profit margins created by yen depreciation.

In view of the situation, Chinese clothing exporters have reduced the prices of their clothing to a maximum possible extent, and hence, the Japanese market would now have to increase its textile and clothing retail price, to carry on normal Sino-Japanese textile trade, according to Chinese experts.

The impact of weakening Japanese yen vis-à-vis Chinese renminbi was also visible at last month’s China Textiles and Clothing Fair, held in Japanese city of Osaka.

At the fair, sponsored by the Japan-China economic and trade centre, 258 Chinese companies and one Korean company operating from China showcased their latest products and services.

These exhibitors account for about US$ 2.5 billion worth of annual exports to Japan, which is about 10 percent of China’s garment exports to Japan. However, only 5,360 businessmen visited the fair, same as the number of traders visiting the last Osaka fair.

In March 2013, China’s textile and apparel exports to Japan fell by 10.5 percent year-on-year, according to China’s customs statistics.

Fibre2fashion News Desk - China

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