Appreciation of the RMB impose highlighted pressure on China's textile exports

The continuing appreciation of the RMB has put increased pressure on China's textile & garment industry. The exchange rate for the RMB against the U.S. dollar broke through the 6.94, 6.93, 6.92 and 6.91 barriers triumphantly during eight trading days in June and was fast approaching 6.90 by June 12. In the first five months of this year, China’s total export of textile and apparel reached 66.157 billion U.S. dollars, increasing by 15.4 per cent compared with the same period of last year, in which the export of textile was $26.067 billion, expanding 26.2% and the export of apparel & clothing Annex was $40.09 billion, up by 9.3 per cent year-on-year, which was 9 per cent lower than last year’s growth rate however, and less than the national average as well. Statistically，Tootoo.com analyses, the first five month’s 26.3% growth rate has been higher than the 20.94% average annual increase level, however, the garment export growth has continued to slow down. Apparel exports went up by 8.46 percent in April, the lowest increase of the past five years, refreshed by the 1.08 percent record in May. The sharp slowdown in the garment export increase also dragged the overall textile & garment export growth. Therefore the textile industry has been depressed, looking forward to the Lifeboat Policy. In fact, the textile and garment export has low endure to the appreciation of the RMB. "Research Report on Impact of RMB Appreciation on China's Export Enterprises", published by China Banking Research Center of the Central University of Finance and Economics, indicated that with the rapid appreciation of the RMB and the deteriorating external environment, China's export enterprises will face enormous challenges. Less than 30 percent of the export enterprises can put up with a 4 percent appreciation or more, and moreover, 44.5 percent of Manufacturing industries on textile, apparel, shoes and hats can put up with an appreciation less than 2%，none of whom left when it comes to 6%. Nevertheless, the appreciation of the RMB against the U.S. dollar rate has been more than 4 percent during the first three months this year. The good news is that the relevant ministries are considering introducing a series of favorable policies to support the textile and garment industry in distress, which caused dispute though. The supporters stated that enterprises deserved a buffer period for the adjustment and upgrading, while the opponents were worried that the increased tax rebate rat and other support policies would protect a large number of low-level corporations and lead the industry's painful adjustment, started two years ago, down the drain. Under dispute, the support policy may not necessarily be carried out. What's more, were the support policy to be implemented, it is still unclear how effective it would turn out to be.