Appreciation RMB to one point: a large loss of household ceramics(4/2/2010)

The test results indicate that labor-intensive industry, the industry profit margins will be severely affected by the appreciation of the RMB, the majority of the industry, especially SMEs.

Arts & Crafts Import & Export from China Light Industry Association noted that China's export of light industrial enterprises above designated size generally around 5% of profits, while small enterprises on the 2% margin. Because of low barriers to entry China's light industry, low technological content and weak bargaining power, small and medium enterprises and more serious excess capacity, long-term vicious competition, exchange rate appreciation is difficult to shift costs by raising prices only for internal digestion.

To ceramics for daily use as an example: the company can survive the yuan has appreciated about 1 percentage point. If you appreciate by more than 1 percentage point, a lot of household ceramics enterprises (such as the size of annual exports of less than 10 million) operating on unprofitable.(by China Leiyuan, 4/2/2010)