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RMB Settlement Is The Threshold Of Spinning And Clothing Trade.

2009/1/13 11:35:00 20

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First of all, if RMB is settled, what about export tax rebates?

Second, what if my clients do not have Renminbi deposits?

Third, if the exchange rate of the RMB is settled on the day of the dollar, it is not very different from the current foreign trade system. It is difficult to avoid the risk of exchange rate fluctuations.

The current financial policy is obviously incapable of settling the renminbi as a means of trade and not changing its non convertibility under capital account.

Only with supporting policies can our enterprises operate in detail.

At the moment when textile enterprises are generally encountering the cold winter of export, the news of RMB settlement experiment between Guangdong and Yangtze River Delta region and China's Hong Kong, Macao, Guangxi and Yunnan trade with ASEAN has aroused widespread concern of entrepreneurs.

In fact, since 90s of last century, RMB has been widely used in border trade in Heilongjiang, Xinjiang, Guangxi, Yunnan and other places as a means of trade settlement.

At that time, some scholars in the academic circles discussed the ways and conditions for the development of RMB to the international currency.

At that time, there was a positive point of view that, after 10~15 years of efforts, the RMB was settled freely.

In 1997, the financial crisis in Southeast Asia made the reform of financial system the core of practice, and the topic of RMB temporarily withdrew from the focus.

Today, textile enterprises are concerned not with border trade but with textile trade with Hong Kong, Macao, Taiwan, Southeast Asian countries, South Korea and Japan.

"It sounds good, but it's not easy to really put it into practice."

Zhen Zhongming, chairman of Yixing Lok textile printing and dyeing Co., Ltd. thinks, "first, if we use RMB to settle accounts, what about export tax rebates?

Second, what if my clients do not have Renminbi deposits?

Third, if the RMB exchange rate is settled against the US dollar, then it is not very different from the current foreign trade system. It is difficult for us to avoid the risk of exchange rate fluctuations.

"We certainly expect the export orders to be settled in RMB, which can fundamentally avoid the risk of exchange rate fluctuations.

Exchange rate risk exists objectively. If RMB is settled, exchange rate risk may be entirely borne by international buyers.

So, though we are looking forward to it, it is impossible to implement it in a short time. "

Lin Zhongyi, chairman of Jiangsu Changzhou moonlight Textile Co. Ltd.

"The current financial policy is obviously incompetent to settle the renminbi as a means of trade and not to change its non convertibility under capital account."

Dan Jianming, chairman of Zhejiang Mei Xinda Textile Group, said, "this matter must be operable. It is estimated that the government will also introduce a series of policies. Only when policies are matched, can our enterprises operate concretely."

As China's influence has increased and trade has expanded, the renminbi has become a means of settlement.

"In fact, the government is on the way to pilot a neighboring country."

Zhang Yunling, a researcher at the Asia Pacific Research Institute of the Chinese Academy of Social Sciences, said: "currency swap such as China and South Korea, Sino Russian trade double currency settlement is not accidental, and financial support reform is imperative."

"It needs to be emphasized that the settlement of Renminbi as a means of trade has not changed its non convertibility under capital account."

Long Guoqiang, Vice Minister of the Ministry of economic and trade development of the State Council Development and Research Center, said: "the short-term role of the policy is to allow exporters to avoid exchange rate risk. In the long run, it can help the renminbi develop towards the direction of regional currency."

As the textile enterprises are concerned about, the non convertibility under the capital account is the threshold that the RMB becomes a regional currency.

In this regard, long Guoqiang believes that the process of RMB going to the international currency has two important points: first, the ratio of RMB should reach the equilibrium exchange rate in the market; second, the RMB should be convertible in the capital account market.

At present, we should start with trade and gradually cut into the capital market, because opening capital account should take a prudent development path.

The present situation proves that such caution is necessary. In this global financial tsunami, China's financial industry is relatively safe, and its currency has not been seriously affected, which is closely related to China's current financial system.

"The significance of this matter is not only to expand the border trade, but also to prove that the government has acted and is actively promoting the process of RMB internationalization."

Li Daokui, a professor at the school of economics and management of Tsinghua University, said: "the scale of investment in the capital market is calculated by trillions of dollars. If we can deepen financial reform and use Hongkong infrastructure to engage in Renminbi denominated bonds, the proceeds will be far greater than that of trade."

As for the question of "how to use Renminbi to do trade settlement and how the other party does not own renminbi", Li Daokui put forward a solution to establish a matching trade settlement mechanism.

He believes that the answer to this question can be explored in multiple ways.

For example, when trading with neighbouring countries, in the context of crisis, when the other party is short of Renminbi, it can consider providing renminbi to neighboring countries by means of RMB loans, or whether it can protect the interests of both parties and maintain stability under the global exchange rate fluctuations, which can become a way of exploration in the future.

Li Daokui believes that the most important significance of RMB internationalization is that RMB can be invested as a commodity in the future market.

At present, there are only two kinds of treasury bonds issued in China. One is the RMB issued by the mainland, the other is the US dollar bonds issued abroad. The issue of RMB overseas bonds may be the future trend? Script src=>