At Shanghai's largest international trade fair, Chinese exporters say that they can only bear a maximum of 2.3% gain in the yuan, reveals Bloomberg.
Bloomberg says that the maximum appreciation exporters can bear this year is 2.3%, based on the median response of 10 companies interviewed by Bloomberg News at the East China Fair. Three said 1% was as much as they could stand and two said 5%, with the remainder of respondents falling between those levels.
“A one percentage point gain in the yuan will lead to a one percentage point or more drop in our profit margin, which is only 5 to 7%,” Huang Yifan, president of J & F Garden & Gift Product Manufacturer Co. told Bloomberg. Huang says the yuan shouldn’t appreciate beyond 6.6 per dollar this year.
The feedback from the exporters is putting pressure on the central bank to limit appreciation sought by the U.S. and Europe which claim that an undervalued yuan gives Chinese companies an unfair advantage.