*** Appreciation pressure pressure hardware industry or will face huge **

*** The middle price of the US dollar rose in a row and breached the 6.7 mark.

Perhaps we still remember that in the financial crisis that broke out in 2008, the exchange rate of the *** exchange rate rose once with the depreciation of the US dollar. However, after the time entered in 2010, the financial crisis began to ease, and the exchange rate of the US dollar against the US dollar continued to rise and became relatively stable. At present, the exchange rate of the US dollar against the US dollar was basically maintained at the level of 6.8266 to 1. Subsequently, the United States exerted greater pressure on the appreciation of the ***.

In February, Soros, the US financial tycoon, began to appeal for a one-time appreciation of ***. On March 17, the US Congress throws the “Schumer’s motion” to further exert pressure on the appreciation of the ***; on March 24, a A panel of economists and historians testified that the exchange rate of *** against the U.S. dollar was kept at a relatively low level when it was testified by the U.S. House of Representatives Fundraising Committee, and suggested that the Ministry of Finance should list China as a currency manipulator. As the US Department of the Treasury announces the date for the exchange rate report on April 15th, China’s pressure to appreciate the renminbi is increasing.

At present, the Chinese government has made it clear that it will not be forced by external pressure to adjust the exchange rate and warns that forcing China to act will only be counterproductive. On March 22nd, Zhong Shan, Vice Minister of Commerce of the People's Republic of China, paid a visit to the United States. He reiterated the original attitude on the exchange rate, and also stated that the Chinese government will make decisions based on the domestic situation and the level of development in China.

“Whether or not *** appreciates in the future is still inconclusive, but there is a strong expectation of appreciation in the market. This is a fact. Once *** has appreciated sharply, it will be beneficial to the import industry and will not benefit the export industry. For export-oriented China's hardware industry, it will have a huge impact," said hardware industry experts at the China International Hardware Show (CIHS'10) organizing committee.

It is understood that China International Hardware Show (CIHS) is China's largest hardware professional exhibition, held every year in September at the Shanghai New International Convention and Exhibition Center, this year is the tenth. The expert team of its organizing committee enjoys a good reputation in the hardware industry. They not only shoulder the promotion and organization of the exhibition, but also keep an eye on all kinds of problems in the hardware industry throughout the year and provide advice for the development of hardware products in China.

The exchange rate is closely linked to China's hardware industry's export "Gate"

***The exchange rate issue has recently become the focus of media discussions. The pros and cons of the exchange rate increase have also become a hot topic. First of all, the beneficiary industries that have appreciated the value of the *** have received attention from the market, such as the aviation industry, because the exchange rate will reduce the cost of traveling abroad or studying abroad, and the aviation industry will benefit from it. In industries such as papermaking, because large quantities of raw materials need to be imported, exchange rate increases will also reduce their production costs.

In addition, the appreciation of *** may benefit some high-spending consumers. For example, after appreciation, the price of imported goods will be relatively low. High-spending consumers are accustomed to consuming imported goods. They may be willing to see the appreciation of ***.

However, the problem must be viewed from two perspectives, because appreciation itself will firstly suppress exports, export prices will rise, and the cost pressure will become relatively larger. For export-oriented industries, it will face greater difficulties.

All along, China’s hardware industry has adopted export as its main sales channel. In 2008, China’s total export of hardware products exceeded US$50 billion, which occupies an important position in the entire light industry. Most of China's hardware companies are also import-processing or OEM-based businesses. They rely on a relatively cheap labor force to make very meagre profits and are labor-intensive companies.

"Some smaller hardware companies may have profit margins of only 3% to 4%. If the exchange rate appreciates by 4%, the company will have no profit.

If you increase again, the company will face losses. Therefore, for export-oriented hardware companies in China, the exchange rate is closely linked to the hardware industry's 'door of life'. Experts from the China International Hardware Show (CIHS'10) Organizing Committee stated.

Resolve the pressure of *** appreciation "three steps"

China and the U.S. have seen a resurgence in their appreciation of the ***, and they have undoubtedly put pressure on the metal industry that has just experienced the slump in the external market in 2009.

According to media reports, the Ministry of Finance dispatched a research team to the Guangdong, Zhejiang, and Jiangsu provinces and Shanghai to conduct the exchange rate stress test in late March. Although it was later denied by the Ministry of Finance and the Ministry of Commerce, the foreign exchange-oriented hardware companies became nervous about exchange rate-sensitive nerves.

*** Appreciation has become the biggest impact factor for hardware companies this year. Enterprises can not independently choose whether or not to appreciate, and how to resolve the pressure is the most important thing to consider now.

“Foreign trade hardware companies in 2010 will not only face greater pressures for appreciation, but will also be accompanied by higher raw material prices and higher labor costs. The possibility of further eroding corporate profits will increase. Some companies are eliminating some The agents in the international market have reduced costs.” Experts from the China International Hardware Show (CIHS'10) stated that “In addition, some export companies will choose to directly increase product prices, which will face Vietnam, India, Pakistan, and Bangladesh. The price competition of the national labor-intensive enterprises."

The situation is grim, enterprises need to improve efficiency and reduce costs in all aspects at present, and companies that cannot withstand the pressure of appreciation may be eliminated by the market. For the company's countermeasures, experts from the China International Hardware Show (CIHS'10) Organizing Committee proposed a "three-step" response.

First of all, at this stage, hardware companies should strive to expand their export channels and rely on increasing export volume to make up for possible pressures on appreciation of renminbi. Under the circumstances of declining profits, they will reach the status of “small profits but quick turnover”. "For the expansion of sales channels, participating in professional exhibitions is the best way." Experts from China International Hardware Show (CIHS'10) Organizing Committee stated that "China International Hardware Show (CIHS'10) is the second largest hardware exhibition in the world , has already had a history of ten years.The exhibition is mainly targeted at guiding foreign demand and export-oriented, has been committed to build an export trading platform for hardware companies, and expand export channels. Last year's China International Hardware Show (CIHS'09) attracted a professional overseas There are more than 3,000 buyers, of whom 38.3% are from Europe and the United States. It can be said that hardware companies are facing the pressure of *** appreciation and seek the best platform for expanding export channels.”

Second, while expanding the export channels, hardware companies should use the opportunities in the current domestic market to invest in the development of the domestic market. They must “walk on two legs” and the so-called “don’t put all the eggs in the same basket”. Once *** really appreciates, it can also reduce its own losses by supplementing the domestic market. "Since the outbreak of the financial crisis in 2008, the China International Hardware Show (CIHS) insisted on export-oriented, while also providing professional services for the majority of hardware companies to open up the domestic market, and intensified efforts to organize top domestic professional buyers. Last year's China International Hardware The exhibition (CIHS'09) reached nearly 40,000 domestic professional buyers, making the show the first to achieve 'walking on two legs',” said the expert.

Finally, in the long run, hardware companies should speed up the transformation, improve the design and R&D capabilities of hi-tech products, and get rid of the current situation of relying on cheap labor and large-scale production and exporting low-end products to improve product quality and added value. Increased your ability to withstand exchange rate risk. "China International Hardware Show (CIHS'10) has been committed to providing hardware companies with a platform for the exchange of new products and new technologies, and for the first time at the China International Hardware Show (CIHS'09) opened a 'new product display area'. The exhibiting hardware companies provide a platform for the display of new products for free, inviting hardware industry experts to conduct fair, fair and open selection of new products, and reward winning enterprises.

The experts of the China International Hardware Exhibition (CIHS'10) Organizing Committee finally stated that “This year, not only this new product display area will continue to be held, but also the “Hardware Industry New Product and New Technology Symposium” will be held at the same time. The activities provided a more comprehensive exchange and trading platform for exhibiting hardware companies. ”

It is understood that the '10 China International Hardware Show (CIHS'10) will be held from September 28 to 30 at the new International Exhibition Center in Shanghai. The same time will be held in the '10 China International cabinets, kitchen and bathroom products and technologies. Expo, '10 China International Construction Hardware Show and '10 China International Lock, Security Products Exhibition.