As the RMB depreciates, will domestic service companies become big winners?

Recently, the eight-year appreciation trend of the RMB has come to an abrupt end and has embarked on the path of depreciation. As we all know, in the past few years, due to the appreciation of the RMB, the domestic textile and apparel industry had a difficult time. This plunge seems to have given the market hope of recovery.
As we all know, the textile and apparel industry is highly dependent on exports. Industry insiders said that judging from the overall situation of domestic textile and garment enterprises, the proportion of exports and domestic sales is roughly 50:50. The continuous appreciation of the RMB has indeed put many export enterprises under heavy pressure. On the one hand, the depreciation of the RMB against the US dollar will help textile companies reduce costs, improve product competitiveness, and obtain more orders. On the other hand, it will help obtain exchange gains.
“Theoretically, depreciation is good for us, but it is not very decisive. Now the delivery time of products has generally been shortened by one-third. Some products may have been 50 days before, but now only 35 days. So the exchange rate is The impact of fluctuations is actually not that big.” Yu Yongjun, general manager of Jiangsu Lianfa Textile Co., Ltd., a leading domestic textile enterprise, said in an interview with reporters. “In fact, when signing agreements with some large customers, we often add some additional agreements, including cotton price fluctuations and exchange rate price fluctuations. If the fluctuation range exceeds the scope of the agreement, the price will be adjusted.”
Industry insiders believe that due to the rise in labor, raw material and capital costs, the favorable exchange rate is still unable to offset the rise in comprehensive costs of the domestic clothing and textile industry, far exceeding the negative impact of comprehensive costs in Southeast Asia and Africa. In fact, in recent years, it has become the norm for major textile companies to expand overseas. Many listed textile and apparel companies, including Bosideng, Lianfa Group, and Shandong Ruyi, have acquired or established subsidiaries overseas.
“When the RMB appreciated in the past, many companies were indeed anxious, and even many corporate bosses came to us, hoping that we could propose to the relevant ministries and commissions to take relevant measures to maintain the stability of the exchange rate. So now devaluation is theoretically good for companies, but I personally think that when this kind of two-way fluctuation becomes the norm, it will actually be a greater test for enterprises.” Jiang Hui, president of the China Textile Import and Export Chamber of Commerce, told reporters that fluctuations in the RMB exchange rate may make it more difficult for some small and medium-sized enterprises to do business. “For companies, they still hope to maintain stability, because locking the exchange rate is beyond the control of ordinary entrepreneurs.”