Yuan appreciation burdens exporters

Updated: 2013-05-17 07:45

By Li Jiabao (China Daily)

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The recent appreciation of the renminbi has had a major impact on Chinese exporters, especially those targeting the Japanese market, Ministry of Commerce spokesman Shen Danyang told a news briefing on Thursday.

Exporters are reluctant to accept overseas orders owing to the quick currency appreciation and a lack of confidence in long-term operations, Shen added.

The 113rd session of the Canton Fair, China's export barometer, saw overseas purchases edge down 1.4 percent year-on-year to $35.54 billion, but 83.7 percent of the overseas orders were short or medium-term orders within six months, according to the ministry.

"Renminbi appreciation further narrows the profits of exporters and a survey by the ministry showed that 77.5 percent of exporters saw profits decline remarkably from January to April, while 6.6 percent of exporters worried about the fulfillment of orders," Shen said.

He added that the currency appreciation took a heavy toll especially on small and medium-sized enterprises.

Despite the robust trade growth in the first four months of this year, Shen said the ministry remained alert about the outlook for China's foreign trade in 2013.

While the economic downturn eased in developed economies, there has been no fundamental improvement in overseas demand, and rising costs of land use and labor as well as financing difficulties remain in place domestically in addition to yuan appreciation against major currencies including the US dollar, the euro and the Japanese yen, Shen said.

China's exports surged 17.4 percent year-on-year in the first four months but analysts said the figure was probably inflated by speculative money disguised as trade payments.