Chinese textile exporters drop dollar pricing to offset yuan appreciation
Posted on Apr-14-2008· by china investor
BEIJING, April 7 (Xinhua) — Chinese textile exporters are turning to non-U.S. dollar currencies in pricing and settlement to offset rising losses from the yuan’s appreciation against the greenback.
The majority of more than 1,000 textile producers said they had switched to other currencies in a survey by Web Textiles.Com, a major textile information website.
Those still pricing their exports in U.S. dollars had raised the yuan’s exchange rate against the dollar in their contracts, or cut the validity term from up to two months to just a week, according to the website.
The Chinese currency has risen more than 4 percent against the dollar this year, with its central parity rate setting a high of 7.002 against the dollar on Monday.
The continuous appreciation, together with rising costs from export tax rebate cuts and more expensive labor and raw materials, has squeezed profits in China’s textile industry.
A survey by China National Textile and Apparel Council last month showed that two thirds of the textile companies surveyed reported an average profit margin of 0.62 percent.
Raising prices is another choice for exporters, but the risk is losing market share amid fierce competition, said website
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