25 Million People In Textile And Garment Industry Will Face Unemployment Crisis

The United States and other western countries have frequently put pressure on China's exchange rate, but the Chinese government is still fighting back with a strong attitude. This is because once the renminbi appreciates, many labor intensive enterprises will be on the verge of collapse, which will lead to a wave of unemployment.

According to experts estimates, only 25 million of the textile and garment industry will face employment impact.

To stabilize employment, the Chinese government must deal with the issue of RMB exchange rate carefully.

Zhou Shijian, senior researcher at the Sino US relations research center of Tsinghua University, pointed out that employment is directly related to social stability, which is the biggest threat to RMB appreciation.

There are about 5 enterprises in scale above the textile and garment industry, and generally have more than 500 workers. If 90% of the 5 families have poor compression capacity, it means that once RMB appreciates, 25 million of the 4.5 000 enterprises will face employment impact.

The 25 million employment crisis does not include other enterprises under the scale, as well as enterprises outside the textile and garment industry.

The internal investigation report of the mechanical and electrical chamber, which has initially completed the pressure test, shows that in general, the appreciation of the renminbi will have a greater impact on the three types of enterprises: large scale equipment enterprises, home appliances, electricians, general machinery and other dominant industries, and shipbuilding, automobiles, steel, mobile phones and other weak potential industries.

The report predicts that if the renminbi appreciates against the US dollar, it will obviously weaken the international competitiveness of industrial enterprises and curb exports.

Therefore, taking into account the current dollar appreciation of the euro, the South Korean won and the devaluation of the main currencies in Eastern Europe, the RMB has actually entered the relative appreciation track, and it is not appropriate to mention the appreciation of the renminbi.