Two thirds of Chinese exporters able to handle yuan rise
Source: Xinhua Date: 2007-08-01
Almost two thirds of China's exporters are able to deal with the effect of yuan appreciation on exports, according to a new survey.
More than one third of exporters believe the exchange rate has had a major negative impact on exports and less than one third consider export rebate cuts as an important factor, according to the survey reported in Friday's China Business News.
Almost half of the companies surveyed said they would avoid staff cuts if the yuan continued to appreciate and a quarter would consider laying off less than five percent of their employees, according to survey.
Few companies responded to appreciation by reducing staff or payment, or by moving production to lower-cost countries.
More than 70 percent of the companies believed the prices of export products could be raised by one to five percent.
However, three quarters had no idea of or had not used financial tools to reduce risks and only one in five had begun to improve efficiency and add more values to their products, said the survey.
Despite a series of measures to lower the trade surplus, China's exports rose 27.6 percent in the first half over the same period last year. In June, the surplus hit a record 26.91 billion U.S. dollars, up 85.5 percent from June last year, according to the General Administration of Customs.
This showed Chinese firms still possessed a competitive advantage and had confidence to cope with yuan rise, the newspaper said.
The cumulative appreciation since July 21, 2005, when China discontinued the yuan peg to the dollar, is more than 7.5 percent.
Close to two thirds of the firms could endure a yuan rise of less than five percent in the coming year and almost one in three were confident of being able to handle a yuan rise of five to ten percent.
The survey covered 103 Chinese export companies nationwide in the textiles, electronics, hardware, chemical and other sectors. About 80 of the companies were small or medium-sized with annual business volume below 300 million yuan (39 million U.S. dollars), which, according to the newspaper, represented a typical distribution of China's export companies.
