Shaoxing Textile Enterprises Look Forward To: Cross Border Trade RMB Settlement
"Ningbo can carry out RMB settlement in cross-border trade." Mr. Wang is the head of a knitted fabric export enterprise. Before he was engaged in foreign trade export in Ningbo, these days, the most heated argument with his business partners is RMB settlement. "RMB settlement can enable enterprises to avoid exchange rate risk to a large extent."
After the four cities of Shanghai and Guangdong province became the pilot of RMB settlement for cross-border trade last year, the pilot scale of RMB settlement for cross-border trade has expanded significantly after a year. The pilot area will cover 20 provinces and cities in China's coastal areas and the mainland.
In June 23rd, Hangzhou, Ningbo and Wenzhou had entered the "cross-border trade RMB settlement" city, which made Shaoxing textile export enterprises eagerly look forward to it.
RMB
Clearing to eliminate exchange rate risk
"Now that enterprises are not afraid to pick up the bill, they are afraid that the exchange rate will fluctuate and they will not get profits." Qian Qing, a clothing export enterprise operator, told reporters that last month there was an American list, the exchange rate came one after another, and there was little profit left.
Now export business, prices have been very low pressure on foreign businessmen, coupled with unpredictable exchange rate risk, enterprises will be careless.
"To carry out cross-border trade RMB settlement is like a foreign card with a credit card to consume, and export enterprises can not only save the cost of foreign exchange, but also have a headache for exchange rate risk."
Insiders told reporters that at present, foreign trade enterprises are facing two difficult problems, one is the price rise of raw materials, the other is exchange rate changes.
In order to carry out cross-border trade RMB settlement, enterprises' quotations can be implemented step by step, thereby reducing the cost of pricing caused by exchange rate changes.
My county textile
Exit
Widespread concern of enterprises
In this cross-border trade RMB settlement pilot expansion policy, more export enterprises have noticed the "pilot enterprise standard relaxation".
It is learnt that besides the import enterprises in the pilot areas, the approval conditions for export pilot enterprises have also been clearly defined, and trade in services has also been included in the pilot area.
People from the county's foreign trade and Economic Cooperation Bureau said that this is a good news for our county's export enterprises.
Enterprises in our county enter
Exit
Most of them are settled in currencies such as US dollars, euros and Japanese yen. For export companies, if the two sides take Renminbi as the settlement currency, they can also save foreign exchange costs and lock in the exchange rate risk.
In the wake of the financial crisis, the losses caused by the large fluctuations in the exchange rate of some settlement currencies are still fresh in many enterprises.
"The renminbi is the local currency of domestic enterprises, because the contract price is consistent with the main currency of the enterprise operation, and enterprises can know the cost and revenue of the paction before signing the contract, so as to improve the effectiveness of trade decision-making and prevent exchange rate risks, especially for long and thin products."
Mr. Wang is optimistic about the operation of cross border trade RMB settlement pilot.
Shaoxing is applying to join the pilot area {page_break}
In June 24th, the reporter learned from the Central Bank of Shaoxing branch of the people's Bank of China that the city has applied to the Zhejiang people's Bank of China for a request to join the pilot area for cross-border trade RMB settlement.
According to the insiders, it is a matter of time for Shaoxing enterprises to enjoy the new policy of RMB settlement in cross-border trade.
Professor Li Shengxiao, Dean of the school of economics and management, Shaoxing University believes that under the present circumstances, if we choose foreign currency pactions, we can enjoy export tax rebates. If we choose RMB pactions, we can avoid exchange rate risks, and the two options are trade-offs.
But in the long run, for foreign trade enterprises, the use of renminbi pactions is the general trend.
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