Unemployment specter dissuades govt from revaluing Yuan

22 Mar '10

1 min read

The unemployment crisis has led the United States and other Western countries to frequently put pressures on China's exchange rate, but the Chinese government is fighting back with a tough stance.

The reason is not far to seek. Once the Yuan appreciates, a large number of labour-intensive enterprises will be on the verge of collapse, which will then, set off a wave of unemployment in the country.

According to estimates of experts, the textile and apparel industry alone could see 25 million people facing joblessness and suggest the Chinese government must consider other avenues to appease these countries.

The textile and apparel industry has about 50,000 medium and big size enterprises, each of which, generally have more than 500 workers. If 90 percent of the 50,000 enterprises fail to resist pressure of appreciation, 25 million workers could be impacted.

The impact is not only going to affect the textile and garment sector. Other labour intensive industries like, leather and footwear, electronic and engineering industries could also be witness to the same impact.

Yuan appreciation against the US dollar will significantly undermine international competitiveness of industries and discourage exports.

Fibre2fashion News Desk - China

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