The Influence on Mining Industry of RMB Exchange Rate

Date: 2011-03-12       Source: Kefid Machinery

RMB exchange rate issue has provoked much discussion; many western countries put pressure on China to appreciation. They want to use the RMB appreciation to cover their trade deficit with China, while the Chinese government has repeatedly pledged to keep the RMB Exchange rate stability.

From the economic point, currency appreciation is good for import but it will take disadvantage to the export, and the appreciation is also likely to result in inflationary pressures.

RMB appreciation will affect the export trade, mining machinery is no exception. Let us take a simple example, Zhengzhou Kefid Machinery Co.,Ltd will export a jaw crusher to Kenya, and the price of the equipment is 99,999 USD. If the appreciation of the RMB exchange rate is 1 USD = 8 yuan, then we can get through the bank 799,992 yuan. Once the exchange rate change to 1 USD=6 yuan, this can only get 599,994 yuan. This will reduce the company’s profit. The situation is not only in the mining machinery industry, but also in every industry that related to export trade.

Kefid Machinery Co., Ltd reckons that the mining equipment market has great potential, both national and abroad. So they will pay more attention to their product quality and spare no effort to study and develop more new type products. They can make the RMB appreciation be another chance to be stronger. They do not have the cheapest mining equipment, but they will recommend the customers the most suitable ones. They always believe that the customers will choose the most suitable equipment not the cheapest, so they never to win the market by the price.

They think the high quality product and best after sale services are the magic weapons to be the winner in the fierce market competition. Kefid will be win not for the price but for the quality and service.

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