China's toymakers are cautious about accepting big orders from clients based in United States and Europe out of fear that an appreciating yuan may crimp profit margins, reports the South China Morning Post.
Quoting Lin Songli, an analyst with Guosen Securities in Beijing, the Post says that low profitability and long payment periods make manufacturers vulnerable to currency fluctuations.
Manufacturers have been affected by currency gains as foreign buyers continue to expect low prices. "If the yuan rises to six to the dollar, we're doomed," Simon Pan, general manager of Zhejiang Huangyan Hongfan Toys Factory, told the Post.
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