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Declining euro hurts China's export

Declining euro hurts China's export
0 CommentsPrint E-mail CCTV, June 10, 2010
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The euro has been on a downward trend since the end of last year. The depreciation has not only left European consumers' wallets smaller, it has also hurt China's exports.

The EU is China's biggest market for machinery and electrical products. But as the euro continues to weaken, some Chinese exporters are seeing their orders cancelled.

This company in Shenzhen produces set-top boxes. Its orders have shrank by a third since April of this year, due to the euro's decline.

Gan Weicai, Senior Sales Manager, Int'l. Department, Skyworth Group, said, "Our sales in the European market grew steadily every month previously. But since April, as import costs rose, some customers have cancelled or delayed their orders."

At the beginning of the year, one euro could be exchanged for 9.8 yuan, but now it's only worth 8.15 yuan. The depreciation of the euro has hampered profit margins for China's labor-intensive industries. Some Chinese exporters require deals to be settled in US dollars. As European customers are forced to use more euros to buys dollars, some have reduced or cancelled orders.

Analysts say in the long run, the depreciation of the euro will hurt European consumers' wealth and purchasing power, ultimately revealing the severity of the impact on Chinese exports.


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