Coping With RMB Appreciation: Zhejiang Textile Enterprises Have Brilliant Ideas.

With the global economic recovery this year, the "Santa Claus" on the other side of the ocean is more Gu Yiwu than last year.

It was an exciting thing, but it made Liu Zheng unhappy.

"RMB appreciation is too fast now, and we dare not do some bigger orders."

According to the latest data from China foreign exchange trading center, the central parity of RMB against the US dollar in September 21st was 6.6997, breaking the 6.7 pass.

This means that for Zhejiang's foreign trade export enterprises, if we want to survive in such exchange rate fluctuations, we must change.

Give up small bills

In June 19th of this year, when China restarted the reform, many Zhejiang exporters began to worry about their jobs.

After that, the oscillation rate of RMB against the US dollar increased, but the maximum increase was only 0.9%.

After the adjustment in August, the increase was narrowed to 0.3%.

However, since September 9th, the central parity of the RMB against the US dollar has changed the trend of broad oscillation before, and has appreciated 9 consecutive trading days, rising by 910 basis points.

"In the September 21st RMB to us dollar exchange rate intermediate price as a count, in more than 3 months time, Renminbi pairs

"Now we pay attention to the production and operation of enterprises every day, and we must keep an eye on them every day.

Liu Zheng said, as Christmas gifts export is a traditional item of Yiwu's small commodities, everyone has been doing so many years, the market has experienced full competition, and the profit space has been very limited.

"Now that the exchange rate has changed so much, it is likely that it will be profitable when signing the bill, but it will become a loss at the time of settlement."

"Therefore, we are now taking small bills, even if the customer is a big list, we also ask the other side to cut into a few small bills, really can not only watch business slip away."

Liu Zheng said that the big bill means that the delivery time is long. In the period of RMB appreciation, the longer the time is, the greater the loss.

Therefore, shortening the cycle of every business is the first thing they need to do.

RMB settlement favored

Relative to some

In June this year, almost the same time, the two exchange rate reform was launched in RMB. China's cross-border trade settlement of RMB was extended to all countries and regions from China, Hong Kong, Macao and ASEAN.

At the same time, Zhejiang and other 18 provinces and cities are closely followed by Shanghai and Guangdong, and have also become pilot areas.

According to the Zhejiang branch of the Bank of China, cross border trade RMB clearing business is popular for Zhejiang, a major export province, from the first day.

On the first day, the Bank of China Zhejiang branch handled many RMB settlement business of Zhejiang products international, Fortis Group and other enterprises.

Since September, with the increase of RMB exchange rate, more enterprises have realized the benefits of RMB settlement in cross-border trade, and the volume of business in Zhejiang has also increased dramatically.

Cai Guisen, chairman of Zhejiang Hong Zhen group, which is mainly exported to the mold, believes that the settlement of cross-border trade by RMB is of great significance for Zhejiang, a big exporters of Zhejiang, as well as a large number of private export enterprises.

At present, the import and export enterprises usually use the US dollar for valuation and settlement, and the resulting exchange rate risk is mainly borne by domestic enterprises.

If the export commodity is locked in foreign currency price, the depreciation of foreign currency will lead to a decrease or even a loss in the profits of enterprises, especially for the large scale complete sets of equipment products with high technology content and long construction period. The exchange rate fluctuates greatly, and the exchange rate risk faced by enterprises is bigger.

If RMB trade settlement is used, enterprises can avoid hedging by avoiding financial risks such as forward selling and trading.

Cai Guisen said, "80% of our products are exported. Because the production cycle is relatively long, the exchange rate between the contract and the payment will be relatively large."

Moreover, at present, the RMB is in a medium and long term appreciation channel. Therefore, export enterprises like Hong Zhen group need to avoid exchange rate risk and enjoy the benefits of appreciation through cross-border trade RMB settlement.

Transfer market to find a way out

All along, hanging on a tree is one of the rules that many Zhejiang businessmen can survive.

In the face of such a turbulent environment of foreign trade, some small businesses have accepted passively, and those with bargaining power have adopted RMB settlement, and many enterprises are seeking to pfer the battlefield.

Zhang Mianfu is a real Yiwu businessman. Over the years, he has been working hard to establish a bridge between Yiwu's small commodities and the external market.

"Now that the cost of foreign trade is high, through the Internet, we can largely reduce the cost burden of foreign trade enterprises which are originally very profitable."

Zhang Mianfu told reporters that because of the recent appreciation of the renminbi mainly against the US dollar, the other currencies such as the euro have not changed a lot, and some have even depreciated. Therefore, many of the gift manufacturers in Yiwu are beginning to avoid the US market and vigorously expand the business of some non US dollar economic zones such as Europe and Russia.

It is understood that since the two exchange reform was launched in June this year, the appreciation trend of the RMB against the US dollar has been established.

Many small and medium-sized enterprises in Yiwu began to develop some emerging markets such as Russia from then on.

"At present, these developments are gradually being pformed into orders.

The number of people going out through our network channels has increased by more than half.

In addition to pferring to other overseas markets, there are more private enterprises in Zhejiang turning their attention to the domestic market.

Taizhou Ting Hai Group is a company that produces outdoor and leisure home products. Their products were basically exported before, but gradually shifted their attention to China since 2007.

"At that time, we felt that with the development of economy and society, the domestic market would be a huge cake."

Chen Nengsen, chairman of Zheng te group, said that after several years of efforts, they not only opened up a vast market in China, but also reduced the impact of exchange rate changes on enterprises.

"If our market is still abroad, then the exchange rate fluctuation is so large that I am not so calm.