Japanese firms have intensified a cautious attitude toward a second revaluation of the renminbi.One trading firm operates a spinning factory in Shanghai and exports yarn to Japan.Last year,prices of acrylic staple yarn and polyester staple yarn moved up,but a sufficient shift of higher costs to selling prices of yarn was impracticable.When calculating the cost of transporting yarn to Japan,customs duty and miscellaneous expenses,the same yarn made in Japan will cost relatively less and exports to Japan were cut to half last year.If the renminbi should be revalued in this environment,profitability will become even worse and the production in Shanghai will no longer generate profits.
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