As the yuan continues to show further signs of appreciation, exporters at the China Import and Export Fair in Guangzhou are already starting to feel the heat.3 [4 T- ~4 i! Z0 `
Many firms, reluctant to sign long-term contracts due to fluctuating exchange rates, are defending their turf by shifting to short-term contracts. One such exporter is China Xingxing Group Co, a Taizhou, Zhejiang Province-based manufacturer of household refrigerators and freezers.4 d8 G6 Q* |: A$ o0 {
Xingxing Group's Managing Director Chen Minghai said his company now only accepts short-term orders, according to a report from the Chinese-language newspaper, China Enterprise News.1 @, G2 o' Z( z6 P
Prices for longer-term orders will be calculated accordingly to avert exchange risks and any orders longer than six-months will be turned down, Chen was quoted as saying in the report.( ]6 h& _9 t4 n7 ^ Q. c
Companies used to signing longer-term orders are well aware of the risks.
$ \ ^& G9 u6 j. {( F Zhuo Min, marketing manager of vacuum exporter TEK Electrical (Suzhou) Co, told the Global Times that currency appreciation has had an impact on the way they do business.
/ ?' }% P' J# f \/ k. a% f2 {/ y3 o "Yuan appreciation poses a threat to all export-oriented companies. However, we are not planning to shift to short-term contracts. We want to maintain good relations with our clients," said Zhuo.% z$ [- d5 S' t4 e! ~# N1 ^9 w+ D
"Currently we can still digest yuan appreciation, however, in the long run, if the appreciation is beyond the capacity of the company, we will find a way to deal with the problem," he said.+ z9 U0 K+ j' }: {, d' [8 B
Smaller export firms may find it hard to weather further appreciation.
* D) u4 F$ ]7 ~6 g/ G "I think some small exporters will eventually be phased out due to decreased profit margins," said Zhuo.8 }# n N& [( f! e
TEK Electrical, which has exported vacuums to developed countries for more than 10 years, may now venture further into the domestic market to avert export risk exposure.
: C& v* @! j/ r. q. O Domestic sales of several of its models have increased at an annual growth rate of nearly 150 percent. "The domestic market has huge potential," said Zhuo.5 v( v: T/ z+ X( s$ b5 L2 G
The trade event, also called the Canton Fair, is divided into three weekly sessions that run through November 4. Some 70 percent of all 23,599 registered |
发表于 2012-8-16 08:12:37
