The appreciation of Chinese Yuan cuts down the profits from fireworks exporting and makes a pressure for fireworks enterprises.
The balance of fireworks export is USA dollar, then exchange the US dollar into Chinese Yuan. Two years ago, one US dollar can exchange 8.26 Chinese Yuan, but now, one US dollar can't even exchange 7.7 Chinese Yuan. When negotiate around meeting table, the foreign customers admit the fact of Chinese Yuan appreciation, but they are not willing to add any purchase cost for fireworks and force the fireworks enterprises to undertake the price difference. It is calculated that the average export price of every case fireworks is about 30 to 40 US dollars, but because of the appreciation of Chinese Yuan, thereby, the profit of Chinese fireworks enterprises has approximately decreased 20 Chinese Yuan after exchange. In general, the profit margin of fireworks enterprises has been cut down about 5%. As the labor intensive industry, the profit margin is not more than 10% even though those fireworks enterprises which are good at management.
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