Industrial association calls for stable yuan exchange rate

09:35, March 03, 2010      

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Renminbi exchange rate should remain stable for a relatively long period, said China Chamber of Commerce for Import and Export of Machinery and Electronic Products March 1. "Export oriented enterprises can only stand Renminbi appreciation of less than 1 percent."

According to a survey conducted by the chamber, although new orders increased, enterprises are facing a more complicated situation.

Zhang Yujing, president of the chamber said that due to expectations of yuan appreciation and raw-material price hike, speculative orders are increasing. "We cannot imply from robust January data that overseas demand has been rising significantly."

The chamber pointed out that China's large-scale equipment producers, with 150 billion U.S. dollars of contracts in hand, will suffer revenues decline of 30 billion yuan (4.39 billion U.S. dollars), if Renminbi exchange rate against U.S. dollars rises by 3 percent.

"Companies in household appliance, electronic, ship-building, auto, steel and cell phone sectors cannot endure yuan appreciation too."

In addition, labor shortage in southeast China and rising raw material prices have added more pressure on the export enterprises. Overcapacity and fierce competition make it impossible for Chinese companies to transfer pressure to importers by raising prices.

By People's Daily Online
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