The proportion of mechanical and electrical products in total exports is an important criterion for measuring the quality of a country's exports and the optimization of its commodity structure. Among the total exports of developed countries, mechanical and electrical products generally account for 40%-80%. China's exports of mechanical and electrical products have maintained an average annual growth rate of 30% since 1985. The export volume has increased from the initial US$1.68 billion to US$625.31 billion in 2004, accounting for “half of the country's foreign trade exportsâ€. Considering the impact of RMB appreciation on the export of mechanical and electrical products, it will undoubtedly have important significance for other industries.
Many experts and business leaders said in an interview that the exchange rate increase will cause certain obstacles to the export of mechanical and electrical products, but it is not necessarily a good thing to analyze the promotion of product structure and force enterprises to improve their competitiveness. The product coverage is wide, and the impact varies depending on the product category. Some electromechanical products may benefit from it.
Strong momentum in electromechanical exports may be frustrated
To analyze the impact of appreciation, we must first understand the export status, export quality and development prospects of mechanical and electrical products.
According to customs statistics, in 2004, China's foreign trade import and export totaled US$1,154.74 billion, of which the total import and export of mechanical and electrical products reached US$625.31 billion, an increase of 38.2%, accounting for 54.1% of the country's foreign trade import and export. Among the 625.31 billion US dollars, the export of mechanical and electrical products was 323.4 billion US dollars, up 42.3%, accounting for 61.9% of the country's foreign trade export growth, driving the national foreign trade export growth of 21.9 percentage points; mechanical and electrical products import 301.9 billion yuan. The US dollar increased by 34.2%; the annual surplus of mechanical and electrical products reached US$21.51 billion, accounting for 67.3% of the country's foreign trade surplus. From this point of view, it is not an exaggeration to say that mechanical and electrical products are the "first hero" to drive the growth of China's foreign trade import and export.
From the analysis of export quality, electromechanical export products are constantly being optimized in the direction of high technical content and large added value. In 2004, the export of electrical and electronic products, instrumentation products and equipment increased by 42.3%, accounting for 93% of the export of mechanical and electrical products. The export of only optical automatic data processing equipment and components reached US$84.16 billion.
Experts from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products analyzed that China's electromechanical exports are currently ranked fourth in the world after Germany, the United States and Japan. In 2005, the international market demand continued to expand, and world trade grew strongly. Domestic enterprises also seized the opportunity of international industrial restructuring of home appliances and audio-visual products to further increase the added value of products. This year, the growth of electromechanical exports is expected to be close to 40%.
However, if the people appreciate, the strong momentum of electromechanical exports may be frustrated.
The reason is that mechanical and electrical products cover many categories of products such as home appliances, electronic appliances, electrical equipment, communication equipment, computers, displays, mechanical equipment and basic parts, and consumer electronics products and home appliances that occupy the majority of China's electromechanical exports. Data processing equipment and so on are more sensitive to exchange rate fluctuations and are most vulnerable to direct shocks; and these products are facing fierce international competition, and they are often dependent on low-cost advantages supported by low-cost labor. Once the appreciation is large, it is easy to generate exports. Instead, the customer and the market are lost.
At present, there are still many weaknesses in the domestic electromechanical industry: First, processing trade exports account for nearly 70% of the total export of mechanical and electrical exports. Secondly, the export growth of China's organic power companies was slow. In 2004, it only grew by 13.6%. Although private enterprises increased by 92%, they accounted for less than 10% of the total, while foreign-funded enterprises accounted for 73.4% of total mechanical and electrical exports. Among the 7252 organic electricity export enterprises, only 52 have exported more than 100 million US dollars, and there are 27,864 foreign-funded enterprises involved in electromechanical exports, of which 357 are exported with more than 100 million US dollars, and 50 to 100 million US dollars. There are 283 rooms.
In addition, due to factors such as rising raw material prices and tight energy supply, the prices of a considerable number of products such as motorcycles, air conditioners, refrigerators and transformers have risen to varying degrees in 2004. If coupled with the impact of exchange rate increases, its international Competitiveness is bound to be greatly reduced.
Appreciation is "good" for long-term construction machinery
In the field of electromechanicals, the total export value of China's machinery industry in 2004 was 85.787 billion US dollars. Although the export value of machinery and equipment accounted for a lower share of electromechanical exports, the growth was strong, and due to the relatively small elasticity of demand, product quality. The increase is faster and the import ratio of parts and components is significant, so the negative impact of appreciation may be small.
In the field of mechanical equipment, construction machinery can be described as unique. The history of China's construction machinery exports has only been over a decade, but the annual growth rate has reached 40%. According to customs data, the total import and export trade of construction machinery in 2004 was 5.768 billion US dollars, of which imports were 3.913 billion US dollars, up 9.95% year-on-year; exports were 1.855 billion US dollars, up 76.4% year-on-year.
At present, the domestic construction machinery industry has basically formed a complete system, nearly 2,000 production enterprises, capable of producing more than 4,000 types of products, its sales ranked fifth in China's machinery industry; from the international market, 145 The sales of billions of dollars are second only to the United States and Japan in the world. Mao Zhongwen, deputy secretary-general of China Construction Machinery Industry Association, said that with the construction of the Beijing Olympics, the construction of the Shanghai World Expo and the implementation of the “going out†strategy, the production, sales and export of construction machinery have broad prospects. In 2005, exports will still have a large increase. .
As one of the benchmarks for domestic construction machinery, Sany Heavy Industry's exports have grown rapidly. In 2004, Sany Heavy Industry's export sales reached 13 million US dollars, a six-fold increase over 2003. "This year's export target is to strive to complete 60 million US dollars, that is, to increase by 4 times on the basis of last year." Sany Heavy Industry CEO Xiang Wenbo told the China Economic Times reporter that in the first quarter of 2005, Sany Heavy Industry The export volume has exceeded the total for the whole of last year.
As for the impact of the possible rise in the exchange rate, Xiang Wenbo said that the key is to see how big the volatility is. "If the appreciation is 1% or a few percentage points, it will certainly not have an impact. Even if it is increased by 5%, the export impact on Sany Heavy Industry will not be too great, because Sany Heavy Industry's export products are compared with the prices of developed countries. At present, it still has a strong price advantage, and the room for price increase is still relatively large. That is, the product has a strong ability to resist exchange rate risk when it has a high technical content and price increase space, so the pressure brought by the appreciation is Not big."
Xiang Wenbo believes that the appreciation of the renminbi is beneficial to the construction machinery industry as a whole, because most of the parts of the products depend on imports, and the appreciation can greatly reduce the cost.
"Even if it brings some pressure, it may not be a good thing. It can promote the upgrading of product structure, promote enterprises to improve innovation and research and development, and change the growth mode. Therefore, the overall adjustment of exchange rate is a long-term positive for the industry." Xiang Wenbo judged.
Why are construction machinery companies not afraid of appreciation?
Judging from the exchange rate effect, the appreciation of the renminbi has a greater impact on export-oriented industrial enterprises; while the majority of raw materials or equipment based on global procurement is a long-term positive.
Some securities analysts believe that the appreciation of the renminbi has more advantages than the disadvantages of listed companies in the construction machinery industry. Most of the spare parts purchases of these companies' excavators, pump trucks and loaders come from abroad. The appreciation of the RMB will reduce the company's import procurement costs. On the export side, the share of product exports from listed companies in the construction machinery industry is currently insufficient. The main business income is 10%, and the price difference between domestic products and foreign products is nearly three times. Therefore, the appreciation of the renminbi by a few percentage points has a weak impact on the price/performance ratio of products, and hardly affects export demand.
Zhao Yizhang, deputy general manager and financial director of Sany Heavy Industry, verified the above statement on the reporter's explanation. Zhao Xiangzhang estimates that the range of exchange rate fluctuations will not exceed 20%, and the appreciation space will be at most 5-15%. The impact on Sany Heavy Industry is at most a small profit. If the response is good, it will not bring any loss of profits. .
"First of all, the country's export tax rebate policy is still in place. The tax rebate rate of the machinery industry is generally around 10%. Secondly, as long as the brand is further strengthened and services are upgraded, Sany Heavy Industry's export products still have room for price increases in the international market; The proportion of exports accounts for less than 2% of Sany Heavy Industry's total revenue, while half of the parts and components rely on imports. The annual import volume is between 670 million yuan and 1 billion yuan. If the yuan appreciates, it will be for Sany Heavy Industry. Words can not only offset the losses caused by appreciation, but may even be more favorable," he analyzed.
Zhao Xiangzhang said that even with the rapid growth of exports, the pressure brought by the rising exchange rate can be digested by tapping potential. For example, continuously strengthen operational management, improve production efficiency and product quality, improve service levels and network construction capabilities, and vigorously control costs.
“The construction machinery industry mostly has the characteristics of small batches and multiple varieties. Except for excavators and loaders, it can also be mass-produced. Most of them are not suitable for assembly line operations, so the sensitivity to other industries may be lower than other industries. In the development of the market, Sany Heavy Industry began to invest more energy control than ever before. By strengthening procurement bidding management, strengthening savings, controlling waste, etc., only one paint can save the company nearly 10 million yuan." Zhao Xiangzhang said, Sany Heavy Industry will adopt comprehensive measures to reduce the possible adverse effects of appreciation.
Anti-risk ability lies in
Structural adjustment and quality improvement
Relevant experts of China Construction Machinery Industry Association said in an interview that although the development momentum of construction machinery is good, it can not ignore some restrictive factors, including the variety of products, lack of large equipment and miniaturized products; product durability and reliability. There is a big gap with the advanced level of foreign countries; the product performance can not meet the market needs in terms of electronic control, intelligence, electromechanical and hydraulic integration, etc. The key is to accelerate the adjustment of industrial structure and strengthen the research and development of product innovation. On the other hand, the problem of “scattering, small, chaos†in the domestic construction machinery industry is still outstanding, lacking scale effect; the market share in the international market is less than 2%, and the export strength needs to be improved. It is necessary to actively expand overseas marketing channels and improve Service level, etc.
In 2004, Sany Heavy Industry achieved a revenue of 2.656 billion yuan from the main business and a profit of 839 million yuan from the main business. The general engineering machinery industry can have a 10% profit margin is quite good, is the 30% profit margin of Sany Heavy Industry somewhat outrageous?
The difference in profit compared with the peers is mainly due to the different technical content of the respective products. Some of the core products of Sany Heavy Industry, such as the core products of concrete machinery, can have a profit margin of 50%. The key is still high in technical content. More than 70 patented technologies.
"The key to market recognition lies in quality, and the confidence in dealing with exchange rate risks also comes from this. As long as you are too hard, you don't worry about a small appreciation of the renminbi," Zhao said.
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