US Debt Crisis Increases Industry Export Risk

In early August, US President Obama formally signed the bill to raise the debt ceiling approved by the two chambers, while standard & Poor's downgraded the long-term government bond rating of the United States. The two incident showed the alarm bell of American debt credit.

Will the global market wealth shrink, the purchasing power decline and the US dollar depreciation trend strengthen due to the US debt crisis? Will it further inhibit the growth of China's textile and clothing exports in the second half of the year?

In August 3rd, US President Obama formally signed the bill to raise the debt ceiling approved by the two chambers. At this point, the US debt crisis ended.

Although the US debt crisis of the ups and downs has eased slightly, the global market has been relieved for a while, but the US continue to "eat the grain" and the consumption mode of its "happy credit card" has once again been questioned. The essence of its massive issuance is to shift some of the burden onto the global market, laying a bigger hidden danger for the global economy. The US recovery will be blocked, and the risk of the two world bottom will be increased again.

Influenced by factors such as shrinking global market wealth, decreasing purchasing power and strengthening the depreciation of US dollar, the factors that inhibited the growth of China's textile and clothing export were re regulated in the second half of this year.

Wealth shrinks and market purchasing power is limited.

In August 5th, standard & Poor's lowered the rating of us long term government bonds from AAA to AA+ and maintained its credit outlook negative.

After being downgraded by the S & P, the US national sovereignty credit has sounded the alarm bell for us debt credit and triggered the shock of global stock market.

On the 8 th of this month, the New York stock market lost a lot of blood, and the three major stock indexes all fell down. The Dow fell 634 points, fell below 11000 points, and the S & P and Nasdaq dropped by nearly 7%. The shock of the stock market also reflected the lack of confidence of global investors in the US economic prospects.

The US debt default will have an impact on the lives of the American people, and the United States will no longer enjoy the advantages of the lowest and minimum interest rates.

Interest rates will rise, interest rates such as credit cards, student loans, housing loans and auto loans will all rise. This also means that the cost of living of "happy card" consumption habits of American residents will continue to increase, and the withering of the economy during the economic crisis, such as active spending cuts and the return of frugality, will be repeated again.

U.S.A

In fact, the data show that in the second quarter of this year, the growth rate of real consumption expenditure of domestic residents in the US has slowed down.

According to the US Department of labor data, the two quarter of US residents actually

Under the influence of the slowing down of clothing consumption and consumption, the United States from the whole world

The pressure on US dollar depreciation has increased, and the price competitiveness of our export products has weakened.

In the case of the US dollar being an international reserve currency, it is difficult to shake up the situation. The controlled depreciation of the US dollar is favorable to the US.

Whether the US President Obama has doubled exports in five years or reduced the external debt burden, the weak dollar is in the interests of the United States.

And the overall outbreak of the risk of the United States debt, more from the side to confirm the weak dollar policy is very important to "dilute" debt.

Before the financial crisis, the US Treasury bonds were not purchased by the Federal Reserve. However, after the financial crisis broke out, the Fed began to buy the debt directly, which means "monetization of debt".

It is easy for us to judge that the depreciation of the US dollar will be a long-term trend.

The pressure of the depreciation of the US dollar will further accelerate the passive appreciation of the RMB.

According to the data of the state foreign exchange trading center, in August 16th, the central parity rate of RMB against the US dollar was 6.3925, and then reached a new high level since the exchange rate reform.

The exchange rate of RMB against the US dollar has entered the "6.3" era, which will continue to weaken the competitiveness of China's textile and apparel export prices for the products that are subject to higher cost and higher export prices.

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In our analysis, we have repeatedly pointed out that RMB appreciation will accelerate international orders to Vietnam, India, Pakistan and other neighboring countries. Not only will China's textile export enterprises suffer losses from foreign exchange settlement, loss of profits, export orders, and other losses, but also affect the ability of the industry to absorb social employment, and the domestic market competition situation of textile and apparel products will continue to aggravate as the export rate slows down.

The US debt crisis has pushed the risk to the global creditors. Affected by this, the pace of global economic recovery will slow down, and the purchasing power level of the international market will be weakened.

At the same time, the US dollar depreciation trend has been strengthened, which will further inhibit the growth of China's textile and clothing export in the second half of this year.

Here, we should remind the vast majority of textile exporting enterprises to diversify their export markets, speed up the pace of product innovation and development, actively increase the added value of products, and choose financial instruments to avoid trade risk, so as to guard against the consequent trade risks.