Because in the international market, the export price of our products, especially labor-intensive products, is far lower than that of similar products in other countries. The reason is that the labor price in China is low, and because of the fierce domestic competition, export enterprises are willing to spend their blood and compete to adopt the strategy of selling at low prices.

Once the RMB appreciates, in order to keep the bottom line of RMB price unchanged, the price of China's export products in foreign currency will increase and weaken its price competitiveness; If the foreign currency price of export products remains unchanged, it will inevitably squeeze the profit space of export enterprises and have an impact on export enterprises, especially labor-intensive enterprises.

Extended data:

If the RMB appreciates, a large number of short-term speculative funds abroad will seize the opportunity to speculate on the RMB exchange rate. Under the condition that the development of China's financial market is not perfect, it will easily lead to financial and monetary crisis.

The appreciation of RMB will not have a substantial impact on foreign investors who have already invested in China, but it will have a negative impact on foreign investors who are about to invest in China, because it will increase their investment costs. In this case, they may transfer their investment to other developing countries.

Baidu encyclopedia-RMB appreciation