Strong RMB would hit exporters

A Chinese trade organization says a rise in the value of the yuan would be a disaster for labor-intensive exporters of the country.

It made the statement after consulting more than 1,000 exporters in 12 industries on whether they could cope with a stronger exchange rate.

Zhang Wei, vice chairman of the China Council for the Promotion of International Trade, said exporters in labor-intensive sectors such as garments and furniture worked on margins as small as three percent.

So a rise in the yuan "would be disastrous", and these firms would face the "immediate risk of going bust".

He said while external pressure on China to push up the yuan is intense, domestic pressure to hold the currency down is even greater. He added that only a minority of Chinese firms hedge exchange rate risk, and firms need more time to adjust their product range.