Whether the production cost of domestic producers will increase due to the appreciation of the renmi

1. Why does the appreciation of the renminbi cause prices** When it comes to the import and export of raw materials, the appreciation of the renminbi is relatively costly, and the price is high.

It is not to cause export products, but to cause the cost of export products to rise, corporate profitability to decrease, in order to maintain the original level of profitability not to increase.

For example, if the cost of a cup is RMB 8 and the selling price is USD 2 (the selling price of USD 1 in the example you gave is lower than the cost, which is not suitable), and at the current exchange rate of USD 1 = RMB, the selling price is about RMB 1. If the RMB appreciates by 10%, then 1 USD = RMB, then the selling price is RMB. In order to maintain the original level of profitability (i.e., RMB), the company must increase the selling price to US dollars, otherwise the company will make less yuan per cup without raising the price, and if the price is raised, buyers will reduce or cancel orders due to the increase in the selling price.

That is why the appreciation of the renminbi is not good for exporters.

It should be understood from the perspective that after the exchange rate changes, the ** denominated in foreign currencies will become higher. The appreciation of the renminbi will increase the production cost of domestic enterprises (also understood from the perspective of foreign currency exchange), so the cost of export products will increase.

In our manufacturing industry, the materials produced are denominated in RMB when purchasing in China and other production costs such as wages, if the total cost was 100 yuan before, after the appreciation of 5%, although it is still 100 yuan, it has become 105 yuan. Because your order is denominated in US dollars or other foreign currencies, and your payment has not changed, when you receive the payment for the goods in RMB, it has changed in disguise.

I think it should be from the perspective of the dollar, it turns out that your cost is only in US dollars, and now that the RMB has appreciated, then your cost is 1 US dollar in the eyes of American customers, regardless of how many dollars you sell, which is probably what it means.

In the international market, it is in US dollars**.

In China, it is used to pay various expenses including raw materials, taxes, wages, water and electricity bills, factory rent, etc., which are purchased domestically.

For example, assuming that everything else remains the same, the exchange rate of the US dollar against the Chinese yuan is the time.

Each cost of a company's production of products is the profit of RMB and Canadian dollars, and the amount of money that can be paid to foreign customers** is $1 each. (The cost of the business is in US dollars).

If the RMB appreciates, the exchange rate difference between the US dollar and the RMB is early, the cost of the enterprise is US dollars, and the cost has increased in US dollars. To maintain the original profit, you need at least ** (USD), and the cost increases for the company's customers. Thus affecting the sales of the product.

The above calculation can find the adverse impact of RMB appreciation on the cost of enterprises. But it is good for buying foreign products and traveling abroad! If you want to spend 10,000 US dollars abroad, it is equivalent to 82,000 yuan at the exchange rate, and you only need to spend 69,000 yuan at the exchange rate.

Because exports account for a large part of the domestic manufacturing industry, if the renminbi appreciates, exports will fall, which is certainly not a good thing for the domestic manufacturing industry.

Originally, the appreciation of the renminbi can spend less renminbi to import advanced equipment and technology and raw materials from abroad, which can offset the adverse effects of the appreciation of the renminbi, but on the one hand, some countries have set up a lot of obstacles to the export of advanced equipment and technology to China, and on the other hand, China has also set a high threshold for small enterprises to purchase raw materials directly from the international market, so that it is difficult for the domestic manufacturing industry to benefit from the appreciation of the renminbi.

Taken together, the appreciation of the renminbi will do more harm than good to the domestic manufacturing industry.

1) Weakening China's Export Competitive Advantage and Inhibiting Export Growth China's export commodities have always been dominated by "low prices", and most commodities enter the world market mainly by their cheap production costs.

The appreciation of the renminbi has increased the foreign currency of China's export commodities, which has directly weakened the competitive advantage of China's exports, which is not conducive to the continuous expansion of exports and the failure of products in the international market.

on the increase in market share. After the appreciation of the RMB, if the previous bottom line of the RMB is to be maintained, the export products expressed in foreign currencies will increase, which will weaken its competitiveness; In order to keep the foreign currency of export products unchanged, it is bound to reduce the profitability of export enterprises and have an impact on export enterprises, especially labor-intensive enterprises (2) It is not conducive to attracting foreign investment and reducing China's existing international market share to a certain extent The appreciation of the renminbi will increase the cost of foreign investment in China, including the cost of investing in China, the cost of purchasing equipment, labor costs, etc., which will reduce the investment enthusiasm of international investors, so that most of them will take a wait-and-see attitude, perhaps under favorable investment conditions in other countries. This part of the capital will flow to the markets of other countries, which will directly lead to a decrease in foreign direct investment in China, and at the same time lead to the loss of existing international market share. (3) Further Increasing the Employment Pressure in China The obstruction of production development and economic growth will inevitably exacerbate the employment pressure and affect social stability.

First of all, labor-intensive industries.

It is the industry most affected by the appreciation of the renminbi, which leads to a decrease in exports, which will inevitably lead to operational difficulties or bankruptcy of some labor-intensive industries. Secondly, with China's accession to the WTO, China currently provides a large part of the new employment opportunities in foreign trade enterprises.

**, export tax rebate.

Policy adjustments, protectionism.

Intensified and other multiple pressures have made it difficult for export enterprises, coupled with the appreciation of the RMB, export enterprises are even more overwhelmed. Oh.

To put it simply, your money is worth a lot, and the other people's money god Da Lap is not worth it, he has to spend more money to buy your things, at this time it is suitable for imports, not exports, because the sliding for your purchasing power has increased.

The impact of RMB appreciation should be classified according to the market situation of enterprises.

For importers, for example, if the RMB is 1:1 against the US dollar, then the cost of imported materials and goods will be reduced.

Export enterprises, under the above conditions, on the basis of the domestic economy, is not a matter of cost, but the export country purchase cost is too high, the most direct impact is that it cannot be sold. (This is the reason for several economic storms in the United States in the last century).

Increase. The cost of imported goods has increased, and the selling price of exported goods has decreased.