Chinese Jewelry Enterprises Under Macro – Jewelry, Macroeconomic – Jewelry Industry
February 5, 2012 business & economy news
Grandson in the “Art of War” said: “those who do not seek eternal, not to seek a moment, not the overall situation are not sufficient to seek a field.” This sentence under the current China macro-economic, jewelry enterprise in China is extremely applicable.
Long ago, our jewelry in China is too huge corporate profits, whether in manufacturing, wholesale or retail businesses that end jewelry industry is very optimistic about the earnings outlook. However, with China’s rapid economic development, we suddenly found that the industry has quickly entered the integration phase, more competitive, our profit margins are steadily falling. China’s jewelry business in the end how it? Professionals who may be puzzled by this phenomenon, perhaps Siege is still luck of foreign investors find it worthwhile, if we really interpret what the Chinese jewelry industry under the macroeconomic phenomenon, part of the answer may be found. Under China’s current macroeconomic
of jewelry business, we must first look at China’s current macro monetary policy and inflation, although the impact of the development of China’s jewelry industry, a lot of macroeconomic factors, but today we learned from these two line to find out the status of jewelry industry source, as it might be easier to find the answer. Monetary policy in all of us will remember the key word: tight, tight monetary policy means that banks must raise the required reserve ratio, which is funding for the troubled in the jewelry industry, bank loans financing even more hopeless. This is a critical period in the development of the jewelry business is a fatal blow, which is a lot of jewelry enterprise Ji Xiang “listed” one of the root causes.
Moreover, China’s current exchange rate policy has become the focus of monetary policy, the Chinese yuan against the U.S. dollar continue to “rise” and the internal and continuously “devaluation” of the jewelry industry, the impact is huge. We heard in 2007′s “The Return Panyu” message on the jewelry industry in China’s far-reaching impact, we all know Panyu jewelry processing trade accounted for 60% to 99.8% in the area of processing trade jewelry way export. However, with the sharp appreciation of the RMB against the U.S. dollar, the profit form a single, just to make modest processing fee processing enterprises have been a huge problem. Rather than return flight Panyu jewelry business is “an elegant turn,” might as well say that it is export-oriented processing enterprises in the “quite upset”, perhaps this statement may be closer to the truth, because many of the export garment industry and the domestic processing industry are met to this problem. RMB appreciation not only to China’s production brought much good jewelry business, wholesale business and retail enterprises also suffer.
With the appreciation of the yuan in the global economy driven mainly by China and India where a large number of “hot money” into China. “Hot money” inflows on China’s current economy is that profit is less than disadvantages, because the money was not to invest, but to speculation, which triggered many of the problems China’s economy. When the massive 2007 “hot money” into the stock market and real estate, the sudden push to the stock market and real estate invertors become “profitable.” The stock market soared and so a lot can be used for jewelry enterprises to invest in a large transfer of funds took place, while real estate investment also led to rising profits of the development of Commercial Street boom. For a time, in the land of China with the housing boom and the rise of emission from a large number of new shopping centers and malls, which much of the retail jewelry to break the original pattern of relative balance. Jewellery retailers face a lot of new shopping malls and commercial streets there is a very complex feelings, or else very reluctantly in the case of new retail outlets to prevent competition, or else in case of rising marketing costs to increase investment to maintain market share . Even more frightening is the number of new investors is the so-called “windfall” to attract, but more and more, has joined the growing confusion “terminal enclosure war.” Market capacity has not changed profoundly significant increase in the number of operators jewelry does this mean?
Investors caused the increase in “channel Wars,” to rent the original gates of the shops do not even hot, otherwise it will be difficult to make high-quality shopping centers into more lofty, increased competition and higher operating costs for the entire jewelry Retailers immediately into the “low-interest door” and a dilemma. Increase in the retail business should have been able to enlarge the market well, but because “rose gold” and “low competition” and so everything becomes not like. Retail terminal “puffiness” quickly led to wholesale companies and producers of “hypertension”, a large number of retail credit operations with non-standard enterprise funds triggered a wholesale chain fracture, 2007, the wholesale power companies have a lot of money collapse jewelry industry has become “explosive information”, but also to just develop the Chinese jewelry industry is hurt. This phenomenon both industry irregularities, development of the industry is relatively more reasons too fast, too fast in which the relative development of the industry and promote the appreciation of the yuan much related. According to Amazon about a butterfly wing incitement, it may lead to a place far away an earthquake or a storm in the “butterfly effect” theory, the RMB appreciation, “hot money” into China on the “hot money” immediately pushed the influx of real estate, real estate heat fueled the rise of malls and shopping streets, shopping centers and malls led to the rise of the irrational expansion of retail outlets, which eventually led to the sudden slowdown in the industry, 2007 and 2008, lower than expected sales of jewelry is a good proof.
