The Game Of Bargaining Power Of Textile Export Products: "We Use Renminbi To Settle Accounts".

The benefit of one side must be at the expense of the other side. For overseas businessmen accustomed to settling accounts in US dollars, how much is it feasible to allow them to sacrifice part of their interests to accept the requirements of Chinese enterprises?

"Fortunately, all the orders we received were settled in RMB, and overseas merchants basically agreed."

Received a reporter's call, Zhejiang Shenli knitwear Co., Ltd. executive vice president Yao Liang excitedly said.

The company's foreign trade colleague has just returned from Hongkong to participate in a fair held at the same time. Due to the high added value of the hosiery produced by the Shenli knitted product in the R & D and design process, it has greater initiative in the negotiation process.

In order to avoid losses caused by fluctuations in the RMB exchange rate, and refused to use US dollars and RMB settlement, after the RMB broke seven, it became a realistic choice for some foreign trade enterprises to take orders.

However, the benefit of one side must be at the expense of the other side. For overseas businessmen accustomed to using US dollars to settle accounts, how much is it feasible to allow them to sacrifice part of their interests to accept the requirements of Chinese enterprises?

"This may be a business game between strength and strength among enterprises."

Yao Liang thinks this.

Mr. Liu, general manager of a foreign trade clothing company in Guangzhou, who has just returned from the Canton Fair, has personally felt the winter of foreign trade enterprises.

Some people advised him not to take part in the Canton Fair this year, but he still wanted to see it.

"Before I came, I had already prepared myself. The spectators who came to see the exhibition were almost the same as I imagined, but there were very few effective customers, and the negotiation process was more difficult than I imagined."

Mr. Liu told reporters.

At the Canton Fair, Mr. Liu prepared two quotations: one for Southeast Asian customers and the other for European and American customers.

The price quoted for the former is lower than that of the latter.

Mr. Liu's explanation is that for Southeast Asian customers, he will use Renminbi to settle accounts, and the other side will accept it. But European and American customers are accustomed to settle in US dollars. At present, the RMB exchange rate with the US dollar is even higher.

Mr. Liu calculated a book to reporters. According to the current appreciation rate of RMB, the RMB exchange rate breaks by one percentage point, and the turnover of every dollar of foreign trade enterprises will be reduced by 10 Fen.

At the current exchange rate, compared with half a year ago, their company's use of US dollar settlement would reduce their income by 5%, while using RMB or Euro settlement could earn 3-3.5% more.

Therefore, in order to reduce exchange rate risk, at the beginning of the year, Mr. Liu began to take two steps: first, raise the price; first, change the way of settlement.

"In fact, the price increase is just like the wound licking blood for us."

Mr. Liu said that overseas businessmen have become accustomed to the cheap Chinese goods, and the price increases are very strong. Some customers are losing.

Changing the way of settlement is not accepted by most foreign businessmen.

In particular, American businessmen, if he buys Chinese products in Renminbi, means that he has to bear the risk of RMB exchange rate, which is obviously more difficult for foreign businessmen who are still in active position in trade relations.

"RMB settlement is definitely an effective way to reduce risk at present.

But I think it is only regional and temporary, and does not have universal significance.

Although Shenli knitted in Renminbi at Hongkong exhibition has not been rejected by customers, Yao Liang insists that this way can not help China's foreign trade enterprises to get out of difficulties in a wider range.

He said, from the present point of view, it is only a few cases, depending on the negotiations between the two enterprises, some can be talked about, and some can not be reached. In fact, it is a commercial game to see which side is stronger.

Yao Liang enumerated three situations that might accept RMB settlement: first, small orders, small customers, their bargaining power was not strong enough, requiring Chinese enterprises to place orders; two, foreign trade companies' pfer customers, they generally did not have direct import and export rights, in the current poor export situation, in order to make the order go smoothly, they had to shoulder some of their exchange rate losses; three, the order enterprises had their own research and development capabilities and high added value of their products, and they had a relatively large advantage in negotiations, basically able to price their own products, so most foreign merchants would accept the choice of what kind of settlement method.

Shandong Xinguang knitting industry is one of the most powerful foreign trade enterprises in China. Because of the research and development of high-end products in the past two years, some products are simply unable to produce and have strong bargaining power, which is less affected by the appreciation of the renminbi.

Xu Bingxin, the company, told reporters that in fact, raising prices or changing the way of settlement is only a temporary solution.

He believes that labor-intensive textile and garment enterprises are very difficult to have bargaining power. Only those who are strong enough to ensure the quality of products can be negotiated.

When some enterprises talk about this problem a little bit, they go to Vietnam.

During the interview, reporters also learned that some textile and garment export enterprises in Zhejiang began to readjust their industrial structure and compete for market bargaining power by technological innovation and brand advantage. For example, Zhonghua home textile and Jin Chan home textiles, the average unit price increased by 5%-10%, and Ningbo's Fig costumes also achieved a substantial increase in profits because of the creation of their own brands.

Yao Liang said, all enterprises now face the same big environment, and the cost competitiveness of the whole country is decreasing. Pure processing is difficult to persist without cost advantage.

As an export enterprise, as long as it can produce an important product in the international market, it can make it to a large extent the risk of revaluation of the RMB.

For example, he said, if an enterprise can have a profit of 30%, the exchange rate risk is bigger, that is, 10%, the enterprise can also have a profit of 20%.