RMB appreciation hits Chinese enterprises

With continuous rise in RMB, the quantity of orders received by Chinese enterprises has enormously declined. This has further resulted in the marginal profits for Chinese enterprises and increase in the export pressure.

So much so, that one Chinese textile enterprise stated that the orders received from Wal-Mart this time, was just one third of the profits procured in 2006. Production scale of many industries has been reduced, because of RMB appreciation. The Government of China has expressed concerns over this export trend, however, the first task this year would be to decrease the trade surplus of the country and this unquestioningly calls for a rise in the value of RMB. Rise in RMB value is expected to reach 9% to 10%. Besides, it is also believed that the Government is likely to take measures to adjust the export rebate and tariff in order to control the foreign surplus in the beginning of next year.