On the other hand, the appreciation of RMB also makes China lose its attraction for foreign investors to invest and build factories in the Mainland, because the production cost has increased. The same wages are paid to workers in China. In the past, it was only 108 USD, but now it is 108 USD. [/quote]
Other statements:
The influence of [citation] on various industries
1. Foreign exchange liabilities will benefit obviously, mainly including aviation, trade and other industries. Because these industries have more foreign exchange liabilities (especially US dollar liabilities), the appreciation of RMB will bring exchange gains and losses to these industries, especially airlines, which often have huge US dollar liabilities, so they benefit obviously.
2. Import-oriented industries of raw materials or parts will also benefit, mainly including papermaking (pulp import), steel (iron ore import), automobile (some important parts import), petrochemical (crude oil import), chemical fiber plastics (raw materials import), aviation (aviation equipment import), clothing (high-grade fabrics import) and other industries. Because these industries need to import related raw materials and parts every year, the appreciation of RMB will reduce the costs of these industries to some extent. For example, 70% of the pulp cost in China's paper industry, and 38% of the pulp is imported. Therefore, the appreciation of RMB will obviously reduce the cost of the paper industry, thus obviously improving the profitability of the paper industry.
3. Investment products industries will also be sought after by certain funds, mainly including real estate with land value, park development and other industries, and coal and non-ferrous metals with resource value. Due to the small appreciation, overseas funds may gain appreciation gains by investing in land or real estate owned by companies in these industries, thus increasing the attractiveness of funds to these investment products industries, thus triggering price increases.
4. Traditional export-oriented industries are directly impacted, including textiles and clothing, household appliances, machinery and other products. Due to the rising cost brought by RMB appreciation, the profit rate of these industries will decline, but we think that only 2% appreciation has little impact. Companies in these industries, especially leading enterprises, have strong anti-risk ability through cost compression and appropriate price transfer.
5. Industries with international pricing will be affected to some extent, including non-ferrous metals, petrochemicals, steel, electronic components and other industries with international pricing. Because the prices of products in these industries are greatly influenced by international prices, in the case of RMB pricing, the appreciation of RMB will reduce its selling price, which will lead to a decline in profits.
6. Industries replaced by imported products will also be adversely affected to a certain extent, including automobiles, construction machinery, steel and household appliances. The products of these industries are fiercely competitive with imported products. The appreciation of RMB will lead to the decline of RMB quotation of imported products, which will reduce the competitiveness of local products to a certain extent and further affect the profitability of these industries.
7. Foreign trade service industry may be indirectly damaged. Because the appreciation of RMB may bring some adverse effects to China's foreign trade, especially exports, and may bring some adverse effects to ports, airports and shipping, but the appreciation may also stimulate the increase of imports to a certain extent, so its impact is relatively small.
Impact on the stock market:
The appreciation of RMB has two direct impacts on listed companies: one is the direct and substantial impact on the cost and performance of listed companies, and the other is the significant impact on the financial statements of listed companies.
As we all know, iron ore imported from China accounts for half of domestic consumption; Imported crude oil accounts for nearly 1/3 of domestic consumption. Due to the appreciation of the RMB against the US dollar, the cost of importing these raw materials by Chinese enterprises will be reduced accordingly. On the one hand, the rise in international commodity prices has led to a corresponding increase in the prices of domestic related products. On the other hand, the appreciation of RMB has reduced the import cost of raw materials, which will inevitably enhance the performance of domestic related listed companies and their stock investment value under other conditions unchanged. Once institutional investors have the above expectations, they will buy the stocks of related industries and related listed companies in advance, thus promoting the stock prices of these industries and companies to rise.
However, the appreciation of the renminbi tends to curb exports. For enterprises whose main business is export or whose products have a large export share, their performance is likely to be affected to a certain extent, and their stocks will also be sold by investors. Similarly, like those enterprises that use more imported raw materials, due to the appreciation of RMB, that is, the depreciation of foreign currency, the prices of imported goods have a downward trend, and those enterprises that mainly import may benefit from it, and their stocks should also rise.
Let me talk about the impact on the financial statements of listed companies. For companies with B-shares and/or H-shares or listed overseas, if their performance remains unchanged, when these listed companies convert their RMB accounting statements into US dollars and Hong Kong dollars according to international accounting standards or the requirements of overseas stock markets (that is, B-share market and H-share market), the appreciation of RMB will lead to a corresponding increase in their book performance, thus correspondingly increasing the investment value of B-shares, H-shares and overseas listed stocks.
(1) If all the currencies traded by a listed company are RMB, that is, the company buys in China and sells in China, and both the outflow and inflow are RMB. As mentioned above, assuming that its business scale, cost and performance remain unchanged, its A-share value will remain unchanged after RMB appreciation, but its book performance and B-share /H-share and overseas listed shares will increase accordingly after being converted into US dollars and Hong Kong dollars.
(2) Procurement is abroad, and sales are also abroad. Both the outflow and inflow are foreign currencies. Assuming that its operating performance remains unchanged, the investment value of its B /H shares and overseas listed shares has not changed theoretically after RMB appreciation, but its A-share value may decrease accordingly.
(3) Purchasing is at home and selling is abroad, that is, RMB flows out and foreign currency flows in. Assuming that the scale of outflow and inflow remains unchanged, the value of B shares /H shares and overseas listed stocks should not change theoretically after RMB appreciation, and the value of A shares should be reduced accordingly.
(4) Foreign procurement, domestic sales (such as foreign trade companies engaged in import), that is, foreign currency flows out and RMB flows in. Assuming that the outflow is before the appreciation of RMB and the inflow is after the appreciation of RMB, its purchase value remains unchanged. Because it is a commercial operation, the realized RMB remains unchanged, and its A-share value remains unchanged. However, at this time, its performance denominated in foreign currencies such as US dollars has improved accordingly, so that its B-share /H-share and overseas listed stocks have also improved accordingly.
Therefore, there is no necessary connection between RMB appreciation and stock market rise.
It is necessary to distinguish the leading businesses of different listed companies.
In addition, the stock market is affected by multiple factors, and the fluctuation of stock trading price is also quite different from the theoretical trend.
China's huge trade surplus with the United States should be eased with the appreciation of RMB, but we can see that the appreciation of RMB is limited after all. At present, the RMB has appreciated by about 7%. The United States hopes that the RMB will appreciate by 10% ~ 40% to solve the trade problem between China and the United States. Experts predict that China's economy can bear the RMB appreciation range of 7% ~ 10%. Therefore, it is unlikely that China will let the RMB appreciate sharply for its own benefit. In fact, foreign capital and joint ventures account for a large part of China's seemingly huge export volume. In 2006, about 60% of China's more than 600 billion exports were exported by foreign-funded enterprises. Real domestic enterprises include state-owned enterprises, collective enterprises and private enterprises. In short, China people own less than 50%. At present, the main vein of Sino-US economic and trade relations has become American investment-made in China-American consumption. To give a simple example, suppose that the cost of producing a pair of Nike shoes in the United States was $20, and now it is $4 offshore in China. Among them, the cost of buying this pair of shoes from abroad in China is $2, and the profit of China enterprises is $0.4. What China earns is the wages of employees and the taxes paid by enterprises. The wage level in China is much lower than that in the United States, and many provinces and cities have preferential tax policies for foreign-funded enterprises, so we have not benefited much from these two things. But it is such a situation that forces our enterprises to move towards high added value. Enterprises with low added value will be eliminated by the market sooner or later, and the appreciation of RMB will undoubtedly accelerate this process.
The biggest advantage of RMB appreciation is that it partially calms the anger of the United States. Let's not discuss whether it is right or wrong for the United States to blame the RMB exchange rate for its trade deficit with China. Relying only on the economic strength and global influence of the United States, we have to look him in the eye. 40% of our annual exports go to the United States, which is a market highly dependent on China. If we cling to the RMB exchange rate and "confront" the United States, I believe it will be China that will ultimately suffer big losses.