What are the pros and cons of the RMB exchange rate?

After the rapid fall in the central parity of the yuan against the US dollar in November, economists' expectations for the end of the yuan-dollar exchange rate were lowered to 6.92 from 6.82 in the previous month. For the first time, I gave my opinion on the central parity of the RMB against the US dollar at the end of 2017. Over 80% of economists believe that the exchange rate will be “breaking 7” at the end of 2017, with an average forecast of 7.15. More than 3% of the depreciation is expected to exceed the spread of risk-free assets of the two countries. This means that the pressure of substantial depreciation of the RMB still exists, so what impact will it have on hardware companies?

Pros and cons of domestic companies
As foreign goods become more expensive for us, we will reduce the purchase of foreign goods. This will force foreign goods to cut prices, but before this goal is achieved, the domestic market will automatically slow the import of foreign goods, and we will use more products produced by domestic companies. From this perspective, the depreciation of the renminbi is beneficial to our domestic enterprises.
On the other hand, the depreciation of the renminbi will increase the cost of domestic companies' raw materials, spare parts and energy supply from abroad. From this perspective, the depreciation of the renminbi has a negative impact on domestic enterprises.

Good for exporting companies
For export-oriented enterprises, the depreciation of the RMB reduces the cost of export products and increases the competitiveness of export products, which is conducive to hardware export enterprises to expand exports, gain greater market share, and bring a little anger to the depressed hardware industry.
But at the same time, we must avoid falling into the strange circle of price competition. It is more important to make good use of this opportunity to enhance competitiveness, and work harder on the quality and grade of products to enhance the long-term competitiveness of products.
The continued appreciation of the renminbi in recent years has brought significant pressure on China's export enterprises. The devaluation of the renminbi can give Chinese companies a breathing space to take advantage of this opportunity to optimize the structure of export products and develop high efficiency, low pollution and high technology. The new content of the product, improve the ability to deal with exchange rate risks.

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