The Four Runway Helps Smes Compete With RMB Appreciation.

Since the RMB exchange rate floating mechanism has been implemented for more than two years, small and medium-sized enterprises, which export, import and domestic and foreign economic cooperation, have been greatly affected, especially bringing risks to some export enterprises.

In fact, if we make good use of financial channels and tools, small and medium-sized enterprises can also run against the appreciation of the renminbi.

Dai Qiaolin is the financial manager of a local luggage export enterprise.

She told reporters that the export volume of its enterprises is about 1 million dollars a year. Over the past year, the change in the exchange rate of RMB against the US dollar has brought hundreds of thousands of yuan loss to the enterprise.

"Every day we go to see the middle price, and every time we fall a little, the profit and loss in our financial statements increase a little."

Many export processing enterprises such as Dai Qiaolin services are not very profitable, and exports are important businesses. The appreciation of the renminbi has undoubtedly reduced the profit margins of these enterprises.

Chen Hongzhang, a finance department of another export trading company, told reporters that the company mainly sold auto parts. Before the RMB exchange rate reform, the company was booming.

Now, companies are hesitant to face many orders.

Chen Hongzhang said that the time limit for the export of the company's exports is usually three months. According to the current middle price, every dollar exported will lose a few cents compared with the previous one.

For small and medium enterprises with export, import and domestic and foreign economic cooperation, the change of exchange rate has a great impact on them, especially RMB appreciation has brought risks to some export enterprises.

Circumvention of exchange rate risk through financial channels and tools is very common in the international foreign exchange market.

However, since the RMB exchange rate floating regime has been implemented for more than two years, this way of avoiding risks is still very low in Chinese export enterprises.

In fact, if we make good use of financial channels and tools, small and medium-sized enterprises can also run against the appreciation of the renminbi.

Zhejiang, a stone export and sales manager, has just returned from the United States last month. He said that the biggest impact on import and export enterprises is that imports are made in euros and exports are settled in US dollars.

"This is a very frightening thing," he said. Now the renminbi is appreciating against the US dollar, while it has depreciated slightly against the euro. It is doing business with euro imports and US dollar exports.

In the past, small and medium enterprises all focused on the RMB against the US dollar, only knowing that the renminbi was in the unilateral rising market against the US dollar. In fact, the RMB had fluctuated to other major currencies, the renminbi has appreciated substantially against the Japanese yen and Hong Kong dollar, but there has been a slight depreciation on the euro and the pound.

In fact, not only the renminbi, but also the currencies of major Asian countries have appreciated a bit against the US dollar, of which Thailand baht, Philippines peso and Malaysia git have appreciated more than the renminbi, while the Korean won and the India rupees are equivalent to the appreciation of the renminbi.

In the export business of small and medium-sized enterprises, even though there is pressure on RMB appreciation, it is not easy to raise prices. However, if the import and export SMEs change the traditional value of the US dollar, they can also avoid the risk of RMB appreciation.

Especially now, the fluctuation of RMB against the euro and sterling is relatively small, and is still in a state of devaluation. Under such circumstances, exporters should try their best to strive to use the euro and Sterling currencies in export contracts, especially in European orders, in order to avoid exchange losses caused by the appreciation of the Renminbi.

"Borrowing from US dollars" is commonly used by import and export trading companies to avoid exchange rate risks.

According to the annual export volume of a small and medium-sized textile company in Shanghai, the company will lose hundreds of thousands of yuan in every appreciation of two points.

According to the person in charge of the company, their customer orders in foreign countries are generally large, and they basically refuse to make concessions on the price. Therefore, they cannot raise export prices on the basis of RMB appreciation.

For the textile industry with a low profit margin, the exchange rate risk faced by a large textile exporter is self-evident.

In order to avoid the impact of RMB appreciation on exchange rate risk, the company borrowed part of the US dollar loan from domestic foreign banks in a recent 5 million yuan project loan.

"Borrowing money from the US dollar" is a way to avoid exchange rate risk. It means borrowing dollars from banks. When a company needs to pay off the US dollar loans after a certain period of time, because the RMB keeps rising and the US dollar depreciates, enterprises can repay us dollar loans with less RMB.

Although the interest rate of the US dollar is relatively high, the impact of RMB appreciation can completely offset the losses caused by the higher interest rate of the US dollar than the RMB.

In fact, "borrowing money from the US dollar" is commonly used to avoid exchange rate risk in import and export trading companies, which is equivalent to "early settlement of foreign exchange".

That is to say, after a period of time, the company needs to pay off the US dollar loan, and the company can pay less RMB.

For example, before the RMB exchange rate reform, a small and medium-sized enterprise borrowed $1 million from the bank and borrowed it into the US dollar, then converted into 7 million 860 thousand yuan at the time of 1 yuan to 7.86 yuan.

During the period of borrowing, the appreciation of the renminbi can only be exchanged for us $7.12 to US $1, which means that only 7 million 120 thousand yuan will be spent on the purchase of US $1 million to repay the principal of the bank, which has made a net profit of 740 thousand yuan.

There are more than one way to avoid exchange rate risk with time difference. Forwards and forwards, both for importers and exporters, are effective and worth preserving.

For small and medium enterprises with long-term foreign exchange receipts, three to six months' revaluation period will bear a greater appreciation risk. Therefore, they may take the form of export commercial invoice discounting to bank financing, and make the expected foreign exchange settlement in advance.

Forward sale and settlement refers to the signing of a forward contract for sale and purchase with the customer, and it is agreed that the settlement and sale of foreign exchange will be made in the future.