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Forex fluctuations impact Chinese exporters

Reporter: Yang Chengxi 丨 CCTV.com

11-22-2016 16:26 BJT

China is a major manufacturer and exporter in the world. The weakening of the Chinese yuan has had visible impact on many of the country's manufacturers.
Production lines are operating at full capacity at a vacuum cup maker in Zhejiang Province.
"This started since August. We've been having a lot of orders from overseas. In all of our factories, people are working round the clock."said Jia Xuelin, production line Dir. of Zhengjiang Haers. Co.

The company has seen its overseas orders double this year. The export volume of its vacuum cups have grown more than 7 percent in the first nine months of 2016. Company officials said that is thanks to a pick up in demands from the US market. The other factor is the weakening of yuan against the US dollar. That allowed the company to lower its prices overseas 5 percent without eating into margins. But not all manufacturers are happy. Zheng Huiyan works for a denim producer.

"From January to September, our exports has been growing quite well. But it started to drop since October." said Zheng Huiyan,deputy director of Jinsuo Holdings Group.

The reason is that like the Chinese yuan, many other currencies around the world are also depreciating against the dollar, many of them more so than the yuan. Many importers from these countries are now facing mounting costs of import and having to cut back orders.

Zheng Huiyan said "In some South American economies, their exchange rates are fluctuating 30, 40 or even 50 percent. So they are very cautious in placing orders because they don't know where the exchange rates are going."

Experts say a stable exchange rate environment is important for the health of the world's small and medium manufacturers. As they usually have thin margins, they are less equipped to guard against foreign exchange shocks.

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