With continuous appreciation in value of RMB, textile and garment industry's growth has been significantly hampered.
If RMB is appreciated by six percent, one third of the profits of clothing exports to South Korea will be reduced.
If situation prevails, profits would be nil, funds have to be withdrawn, exports would be stopped and companies will have to look for expansion in domestic market.
RMB revaluation would have a sustained impact on the listed companies of textile and garment industry.
It is very difficult in a short period of time to compensate losses from the exchange rate. This would lead to additional pressure on textile and garment industry to increase their profit margin.
This appreciation will directly impact textile and garment exports to US.
If appreciation is more than ten percent, bargaining power of entire industry will have marked decline.
Although impact of RMB revaluation is currently tolerable, its affects are expected to continue in future.