Export Enterprises Expect Cross-Border Trade RMB Settlement

In the Yangtze River Delta region, the appreciation of the renminbi almost led to all.

SMEs are more influential.

"The appreciation of the renminbi will definitely have a negative impact on exports, and the most direct one is the decline in profit margins."

Li Yi, general manager of Ningbo Mei Jie International Trade Co., Ltd., told reporters in an interview with China economic times.

In order to maintain profits, his company usually uses some methods such as forward settlement and sale, strengthening the management of foreign exchange collection, shortening the time of foreign exchange collection, increasing the exchange rate risk clause in the contract, sharing risks with customers, and strengthening the training of the exchange risk management of the company's salesmen.

"Of course, the final solution depends on improving the added value of products, improving the efficiency of production and management, and developing diversified markets."

Xu Xiwen, a business manager of a foreign trade company engaged in the export of consumer goods, told our reporter that the orders received by the company are mostly short orders, and customers generally do not care about the exchange rate.

"Therefore, we have to leave some room for ourselves, and the quotations are in accordance with the 6.5 report, which usually takes Guan Bannian to 3 months.

So when the list is ready, the exchange rate may not reach that level, so it will not lose.

If the courage is bigger, follow the 6.6 newspaper.

She told reporters that their companies are small and generally do not adopt "financial derivatives" such as lock rates. "Only companies that export millions or tens of millions of dollars will do so."

"Factory production usually takes 1 months, and now the exchange rate changes too fast. This time from 6.8 to 6.6 is less than a month, so we will never catch up."

Xu Xiwen said.

For the appreciation of the renminbi, the quotation will be raised and some customers will be lost.

Xu Xiwen said: "products with simple technology, low technology content and relatively sensitive prices may turn to cheaper countries such as Southeast Asia, but most of them will not turn around for a while, because they involve a multi-mode process such as mold production and production, not to say that they can turn around."

Using financial instruments to avoid exchange rate risk

According to the reporter's understanding, under the pressure of exchange rate pressure, some export enterprises in the Yangtze River Delta have adopted measures such as exchange rate locking or increasing the exchange rate clause in the contract; some export enterprises have actively increased imports to offset the effect of exchange rate appreciation.

However, restricted by various conditions, there are few enterprises that take the above measures. In general, it is difficult to grasp the exchange rate changes in the future, which has affected the enterprise's order and the profit and loss of the contract.

Zhang Qionghua, director of the Finance Department of the Ningbo Municipal Foreign Trade and Economic Cooperation Bureau, told an interview with our reporter that the rapid appreciation and fluctuation of the RMB exchange rate has relatively little direct influence on the measures such as the forward exchange rate locking and the export enterprises with import business.

However, most of the smaller export enterprises in Ningbo have not yet taken any measures against exchange rate risk, causing their exchange rate risk to be completely open.

Zhang Qionghua suggested that enterprises can combine their own realities and adopt bank hedging tools to lock in the exchange rate cost and income. They can also use the characteristics of exchange rate fluctuations in the daytime to seize the opportunity to purchase foreign exchange, settle foreign exchange, sell foreign exchange, remit foreign exchange and collect foreign exchange. They can also include the risk factors in the product cost through signing contracts, take account of exchange rate factors in the profit expectation, strive for settlement in the local currency, develop imports, increase the intensity of technological research and development and product upgrading so as to increase the added value of products and so on to mitigate the impact of exchange rate changes.

In order to avoid exchange rate risk, a large number of enterprises have launched various kinds of financial derivatives, such as multi currency settlement and so on, to pfer exchange rate risk; properly adopt foreign exchange forward trading, hedging and other means to lock down exchange rate risk; and even through appropriate US dollar loans, reduce interest expense and exchange loss.

According to the data of Ningbo branch of Bank of China, in October, the amount of forward selling and foreign exchange contracted by the bank reached 700 million US dollars, accounting for 18% of the total business volume of the bank in 1-10 months.

The above data show that under the situation of increasing exchange rate fluctuations, the awareness of Ningbo enterprises to avoid exchange rate risks by means of financial instruments has been enhanced. In particular, some enterprises are good at grasping the timing of exchange rate fluctuations and increasing their ability to control exchange rate risks.

However, because of the pressure of potential RMB appreciation, many enterprises have realized that financial means alone can not avoid exchange rate risk.

"Almost every day we have goods packed and shipped, and the exchange rate is changing every day. Locking the exchange rate is a good way, but not the best.

If we fall, we will remain the same, then we will lose. "

Xiao Wang, a foreign trade salesman of China base import and export company, told reporters.

Expect cross border trade RMB settlement

The appreciation of RMB directly weakens the price advantage of products, and it is more urgent for enterprises to increase the added value of products and inject the core competitiveness to fill them.

Ding Haibin, deputy director of the Ningbo Municipal Bureau of foreign trade and economic cooperation, said in an interview with our reporter that this year, under the expectation of RMB appreciation, many enterprises in Ningbo have taken timely measures to control cost and cost management in various links such as procurement, production, sales and capital operation, so as to improve their core competitiveness.

Some enterprises have also increased the frequency of negotiation with merchants, including negotiating price increases, requiring customers to pay in advance, and so on. In the process of trade, many enterprises have already had excellent bargaining power.

With the increase of exchange rate fluctuations, export enterprises' expectations for RMB settlement in cross-border trade have also increased significantly.

A previous survey conducted by the Ningbo City Central sub branch showed that 75% of the 283 Ningbo import and export enterprises were looking forward to the early settlement of cross-border trade in Ningbo.

In June 22nd this year, Ningbo officially became a member of the second batch of pilot cities for cross border trade settlement of RMB, and the list of pilot enterprises was reported to the relevant state departments at the end of July.

"The import and export trade can be settled in RMB, which is a great benefit to Ningbo's foreign trade enterprises. Its exchange cost is expected to be greatly reduced, and trade facilitation will also be significantly improved."

Zhang Qionghua, director of the Finance Department of Ningbo foreign trade and Economic Cooperation Bureau, said.

"Ningbo is included in the pilot scheme for RMB settlement in cross-border trade, and the expansion of overseas areas from Hong Kong, Macao and ASEAN to all countries and regions is a real positive.

Now the exchange rate is changing every day, hoping that the list of pilot enterprises can be announced as soon as possible. "

Zhang Jianming, the head of a clothing company in Zhejiang, told our reporter that the export volume of the company in the past few years was more than 1 million US dollars, but now it has been afraid to take up a large foreign trade order.

"If the settlement is made in US dollars, the enterprise will not only pay the service fee to the bank, but also bear the risk of the fluctuation of the US dollar exchange rate.

"Cross border trade RMB settlement is indeed conducive to enterprises to avoid exchange rate risk and save exchange costs, but there is still a problem of customer acceptance.

The acceptance of the renminbi in Southeast Asia and other places is good, but in many places, the acceptance of the renminbi is far from the US dollar and the euro.

Xu Xiwen believes that the most effective way is to keep the exchange rate unchanged.

But long term appreciation is not a solution.

It is better for us to determine the appreciation timetable and at what time the exchange rate will reach the level, so that we can have some ideas in mind, and we can quote according to the fulfillment of our order.

Instead of being forced by others, there is no omen of appreciation, we only lose ourselves. "

Dr. Mei Xinyu, a researcher at the Ministry of Commerce and international trade and Economic Cooperation Research Institute, told reporters that cross border trade in Renminbi valuation and settlement is feasible for some foreign trade. At present, more should be for developing countries' customers and for our market position.

In view of the fact that we have invested more and more Renminbi in overseas loans through RMB credit and RMB investment, the space for RMB denominated settlement is expanding.

Because of the appreciation of the renminbi in recent years, the prospect of further appreciation has been well received, which has further stimulated the motives of overseas enterprises and residents to hold Renminbi. However, some overseas enterprises and residents are willing to earn Renminbi but are unwilling to pay the renminbi.