Printing industry: *** Exchange rate falls have troubles and business opportunities

On August 11, 2015, the People's Bank of China announced that it had perfected the quotation mechanism for the exchange rate between the *** and the U.S. dollar, and that the exchange rate between the *** and the U.S. dollar had dropped by nearly 2%. From the 11th to the 12th, the depreciation rate of the exchange rate of the *** exchange rate exceeded 1000 points in two days, a drop of 3.5%.

***Devaluation reasons
Yang Delong, chief strategist at the South China National Securities Bureau, believes that the sudden drop in the exchange rate was mainly due to the expected increase in the US dollar interest rate increase. Therefore, pressure was released through depreciation. In addition, the downward pressure on the domestic economy will not support such a high exchange rate. The recent decline in exports and other factors also contributed to the active devaluation of *** to increase the competitiveness of export products. *** Devaluation will help increase the price advantage of export products and promote export growth while maintaining a relatively loose monetary policy. This also reflects the trend of the gradual exchange rate exchange toward the market and reflects the two-way volatility of the exchange rate.

Lai Jienan, assistant general manager of Changjiang Securities Investment Bank headquarters, also believes that maintaining strong *** has brought some pressure on exports. The Central Bank of China acted to reduce the pressure on China’s exports and cut its middle price. It is plainly stated that it is to maintain growth.

*** Will the exchange rate continue to fall?
The central bank: *** The fluctuation of the middle exchange rate is normal, and there is no basis for the continuous depreciation of the exchange rate.

Ma Jun, chief economist of the People's Bank of China Research Bureau: This is an adjustment brought about by a perfect quote and should not be interpreted as a devaluation of the *** trend.

Good for export industry
*** Devaluation is bound to have an impact on related industries. Some people said, "This news is of great interest to Chinese exporters, but I don't know if they can continue." Analysts said that from the perspective of national imports and exports, the devaluation in favor of expanding exports, some export-oriented companies may Benefits.

Guo Tianyong, director of the China Banking Research Center at Central University of Finance and Economics, believes that a certain degree of weakness will help stabilize exports and stabilize economic growth.

"Adjusting the exchange rate may not change the general public. But for importing and exporting companies, it will bring direct benefits." Professor Li Richan of Xi'an Jiaotong University, said that the depreciation of *** will be mainly enhanced by US dollars. Currency export business competitiveness is a good thing for domestic companies to expand their external needs and expand overseas markets, and the related industrial chains will benefit.

"However, the fall in the exchange rate will also affect the spread of import and export companies." An analyst said that for imported companies, the price of imported goods will rise to a higher level, and to a certain extent, may affect The market share of imported companies.

According to expert analysis, the biggest benefit of devaluation is export enterprises. At present, most of the export enterprises are settled in U.S. dollars. If immediate settlement is adopted, then the company's earnings will increase as the exchange rate changes. In the long run, the devaluation of *** will also have a price advantage for the exported goods.

However, there are also listed company figures that although the exchange rate downward movements are positive for the industry, most companies have previously taken a series of measures to hedge against exchange rate risks, such as import hedging, the US dollar and forwards, and so on. Whether or not the company's performance can be improved depends on the competitiveness of its products in the international market. The positive impact of exchange rates on corporate performance must be specifically analyzed.

Impact on the printing industry
In addition to the depreciation benefits of exports, there will also be some negative impacts such as increased debt repayment pressure of the aviation industry, and the impediment of foreign investment in housing enterprises.

For printing companies, the cost of importing printing equipment will increase. At the same time, due to devaluation, printing companies may be more inclined to purchase home-made equipment in order to reduce costs and bring certain business opportunities to national brands. For companies with more export business, it will help to better open up foreign markets.

In addition, major raw materials such as paper-making companies and some large-scale equipment are imported, and they are generally settled in foreign currencies. Therefore, the depreciation of *** will also increase the exchange loss of the company.