The appreciation of the renminbi is producing a fermentation effect on the overseas factories of Chinese manufacturing companies.
Yesterday, the person in charge of overseas market operations of Midea Refrigeration Appliance Group told the reporter of the First Financial Daily during the 110th China Import and Export Fair (Canton Fair) that after the appreciation of the renminbi, the purchase of overseas assets and equipment was cheaper, but this It is one-off; while the cost of parts and components exported to overseas assembly plants has risen, the impact in this regard has continued.
“The appreciation of the renminbi is good for the purchase of assets, but because the supply chain of the air-conditioning industry is basically all in China, it is necessary to bear the exchange rate losses caused by the appreciation of the local currency when the spare parts are exported.†The above sources told this reporter.
At present, China's air-conditioning capacity accounts for 70% to 80% of the world's total. With the increase of export scale and product quality, some Chinese air-conditioning companies have set up assembly plants overseas in order to avoid tariff barriers. Like the United States in Vietnam, Egypt, Brazil, Gree in Vietnam, Brazil, Pakistan, Chigo in Nigeria, Turkey, have air-conditioning assembly plant.
“The problem is that the currencies of the emerging market countries are depreciating against the US dollar, and the RMB is rising.†According to the person in charge of overseas markets of the above-mentioned refrigeration appliance group in the United States, the cost advantage of overseas assembly plants compared to the companies in their home countries will be weakened.
“On the one hand, the appreciation of the renminbi, on the
Other hand, the devaluation of the Vietnamese dong, this makes it difficult for us (Chinese companies) to do business in Vietnam.†An air-conditioner who did not want to be named said that because the profit cannot offset the loss of the Vietnamese dong. . For example, he said that a Vietnamese employee earns 2 million VND a month, which is just enough to buy an air-conditioner that costs $100. As the local assembly plant wants to import parts from China, if the RMB appreciates by 10%, the whole price of the air conditioner will be sold. It will be adjusted to US$110; if Vietnam dong is devalued by 10%, Vietnamese employees will need to spend 2.2 million VND to buy air conditioners. This has reduced the purchasing power of Vietnamese consumers and companies must sell at a lower price, affecting profits.
Liao Shixing, Minister of Overseas Market Management of the Overseas Marketing Department of Guangdong Zhigao Air Conditioning Co., Ltd. agrees with this view. He believes that Chinese companies set up factories overseas, the most important consideration is the two factors: First, the whole machine exports and parts of the export tariff differences; Second, the local currency and the dollar exchange rate changes.
Many developing countries have set up trade barriers for exports of complete machines. Tariffs like Brazil's air conditioner imports have risen to 35%, while Chinese companies have established air-conditioning assembly plants in the country, which can save more than 10% in tariffs.
Liao Shixing said that as the Vietnamese dong has depreciated sharply against the US dollar recently, the cost of exporting spare parts from China to Vietnam will rise.