How does RMB devaluation affect import & export of instrumentation industry?

On the evening of September 15, the exchange rate of the offshore RMB against the U.S. dollar fell below "7" intraday, with the lowest depreciation to 7.0183. At the same time, the exchange rate of the onshore RMB against the US dollar was also approaching the "7" mark, with a minimum depreciation of 6.9962. Today, the central parity of the RMB against the US dollar was reported at 6.9305, down 204 points, and the central parity depreciated to the lowest since August 18, 2020.

What is the reason for this round of RMB devaluation? Zhong Zhengsheng, chief economist of Ping An Securities, believes that there are two triggers for the recent depreciation of the RMB exchange rate: on the one hand, the US dollar index recently hit a 20-year high; further intensified.

The devaluation of the renminbi is good for exports

First of all, it is conducive to the increase of exports, and the devaluation of the domestic currency is reflected in the appreciation of the foreign currency in the exchange rate. Assuming that the original 100 US dollars can be exchanged for 600 yuan, and now it can be exchanged to 700 yuan, that is to say, 100 US dollars can buy more things in our country, our products are relatively cheap, and the price reduction can usher in sales. promote.

For my country's instrumentation industry, the devaluation of the RMB is conducive to the export of Chinese instrumentation products, expand overseas markets, and enhance the influence of Chinese instrumentation brand.

Instrumentation is the means and equipment for people to measure, collect, analyze and control various information in the objective world. It is the basic tool for human beings to understand the world and transform the world. The instrumentation industry has a wide range of applications, involving environmental protection, life and health, production safety, product quality, energy conservation and efficiency enhancement and other industries.

At present, the product categories and varieties of China's instrumentation industry are relatively complete, the layout is relatively reasonable, and it has a considerable technical foundation and production scale. From January to June 2022, the total import and export volume of my country's instrumentation commodities reached US$51.5 billion, a year-on-year increase of 2%. Among them, the export value was 21.5 billion US dollars, a year-on-year increase of 3.71%.

For enterprises engaged in the export trade of instruments and meters, the "Break 7" of RMB will help reduce the price of export products denominated in foreign currencies, increase product exports, increase corporate income, improve product competitiveness, and expand overseas markets.

Therefore, for domestic instrument companies, on the one hand, they can seize the opportunity to seize the market under the advantage of price; on the other hand, companies need to continuously increase technological innovation, catch up with the advanced, and strive for the interests of domestic users.

The devaluation of the renminbi is not conducive to imports

With the continuous development of energy saving and consumption reduction, low carbon economy, private production industry, strategic emerging industries and the country's increasing emphasis on food safety and environmental protection, it has brought new opportunities for my country's instrumentation industry. The China Business Industry Research Institute predicts that in 2022, the main business income of enterprises in my country's instrumentation industry will reach 992.4 billion yuan.

Although the achievements in the development of my country's instrumentation industry are obvious to all, in terms of high-end instruments and meters, my country is still dominated by imports. From January to June 2022, the total import and export volume of my country's instrumentation commodities reached US$51.5 billion, a year-on-year increase of 2%. Among them, the import value was 30 billion US dollars, a year-on-year increase of 1.03%.

Since most of the imported instruments are denominated in US dollars and settled in US dollars, as the RMB "breaks 7", the imported instruments purchased in RMB means a price increase. In terms of high-end instruments and core components, domestic companies can only pay more to purchase imported instruments due to the lack of domestic substitute products, resulting in increased costs, restraining the demand for domestic scientific research instruments, and hindering my country's scientific and technological progress.

However, the "Break 7" of RMB will not only restrain imported instruments and meters, but also facilitate import substitution and expand the advantages of domestic enterprises in competition with foreign enterprises. On the premise that domesticinstruments and meters meet the needs of use, users will turn to domestic instrument and meter products to promote the development of domestic high-end instruments and meters and achieve import substitution.

In today's globalized trade, the US dollar still affects the global economy. We can only weigh the pros and cons, choose the best plan, and minimize the possible impact on us, and the devaluation of the renminbi is not necessarily a bad thing!