"The exchange rate is rising again, the competitiveness of China's manufacturing is weakening, and it is approaching the warning line of corporate survival." Huang Fajing told reporters that some orders will form a regional transfer, for example, will turn to Vietnam, India and other countries and regions, "and the factory is relocated, is a A very complicated thing."
Huang Fajing is a leading company in China's lighter industry. The chairman of Wenzhou Rifeng Lighter, more than 90% of its products are exported to Europe, America and Japan.
According to the data of the China Foreign Exchange Trading Center, as of October 19, the central parity of the US dollar against the renminbi continued to rise. On October 19, the central parity of the yuan against the US dollar was 6.6553 yuan. This is an improvement over the previous day. In the early period, the central parity of the US dollar against the RMB was 6.6541. According to the exchange rate of 8.11 at the time of exchange reform, the cumulative increase has reached 17.93%.
A bargaining force of the exchange rate struck Huang Huang, and finding a coping mechanism became his ongoing "battle."
Is “Exchange Rate Security Lock†secure?
"The rise of the renminbi is not a day or two. The company is basically relatively used."
However, Huang Fajing also turned around at the same time. "It just looks like a boots that can't fall. I don't know where this reserve price is."
The days when the exporters such as Huang Fajing had a lingering fear occurred on July 21, 2005, and the China Exchange Reform was launched. At the same time, the trading price of the US dollar against the RMB has been adjusted to 1:8.11. Compared with the previous period, the RMB actually appreciated by 2%.
Huang Fajing said that the orders around the import and export sides were first manifested in a field game that began to be intensive. In this traditional industry, Huang has been engaged in international trade for nearly 20 years, and his conditional reflex is to adopt the negotiation rule of “reconstruction to zeroâ€.
Previously, the original order price negotiation once a year was increased to one or two months after the exchange reform. Even under the current situation, negotiations have to be restarted for half a month or a week. "This is a game. We have to increase the price a bit every time we negotiate."
The Chinese manufacturing advantage is slowly losing, and the Chinese distributors on the chain of Huang Fajing are decreasing. At the beginning, the orders were basically from overseas Chinese. At present, in Huang Fajing's customer base, this group has basically disappeared.
“Profits fluctuate between 3% and 5%.†Huang Fajing introduced.
The conditioned condition of yellow is also the initial strain of many companies. Along with this, another way of circumventing was explored: the establishment of an exchange rate “security lockâ€.
For example, Huang Fajing has negotiated a stable interval with the order customer. For example, if the exchange rate fluctuates within the range of 1%, the rise and fall will be borne by both the supply and demand sides. Once the floating rate exceeds 1%, both parties to the risk bear 50% each. "Basic rules are easier to accept."
At the same time, Huang Fajing and the surrounding business owners also tried a method of using futures to hedge hedge transactions.
Huang Fajing produces lighter metal shell series. For example, he received an order for a lighter equivalent to $200,000 in August and delivered it in October. Among them, metal materials such as copper or zinc are needed, which is 60,000 yuan per ton. Therefore, he bought the copper futures of the October contract at the corresponding order price in August, and the distribution price of the raw materials under the price order price. This is basically not affected by the exchange rate.
RMB settlement and bank-enterprise linkage
"But these are all expedient measures after all." Huang Fajing is seeking to stabilize or favor his own currency to price, in addition to improving the quality of his products. "I have tried the RMB or the Euro."
Zhu Hong, director of the Finance Department of the Shanghai Municipal Commission of Commerce, said that as of September 30, the national settlement of cross-border trade in RMB had reached 33 billion yuan. However, the proportion of export trade only accounts for 1.9 billion yuan.
"This is an international inertia resistance. Under such a general trend, it will take time for customers to accept it in the export field." On June 17, this year, the six ministries and commissions issued the "Notice on Expanding the Pilot Program for Cross-border Trade in RMB Settlement" , marking the official expansion of the pilot. Domestic cross-border trade pilots began to move from Guangdong and Shanghai to coastal cities such as Zhejiang.
Taking the Wenzhou area as an example, the Ryan Sea Sun Group is one of the first companies to try. “Many customers are unwilling to take on this risk and refuse to use RMB settlement.†Wang Feng, head of finance at Haiyang Sun Group Co., Ltd. said.
In negotiations with foreign companies, foreign investors insisted on using RMB settlement. “After all, the quality of the products determines the ability to bargain.†Thus, in the three months after the implementation, Haiyang handled 8 businesses with an accumulated amount of more than 2,600. Ten thousand yuan.
“Cross-border RMB settlement is not in good condition.†The relevant person from the construction bank Wenzhou Branch told the reporter. The pilot list of export enterprises must be reported to the Ministry of Commerce for approval, and Wenzhou has reported more than 400. After the time is ripe, the company will use the renminbi for export declaration, and the foreign exchange will be renminbi. If it is not written off, it can be directly refunded.
But this information has not spread to businesses. “Is there such a good thing?†The vice president of finance of Zhejiang Yifang Electric Appliance Group heard the news. This is more like a kind of popularity dominated by banks. Jin Haiyan, deputy manager of the International Business Department of Agricultural Bank of China, introduced the use of RMB cross-border settlement. Domestic enterprises can not only effectively avoid foreign exchange rate risks, but also reduce the cost of foreign exchange purchases by domestic import and export enterprises and the cost of foreign exchange settlement of export enterprises. The foreign exchange transaction costs associated with locking in exchange rate risk. At the same time, it is also beneficial for enterprises to speed up the settlement and improve the efficiency of capital use.
“After handling cross-border RMB settlement business, the rough estimate is 2% to 3%.†Wang Feng, head of finance of Haiyang Sun Group Co., Ltd. introduced.
According to the main areas for conducting RMB settlement of cross-border trade, it is currently concentrated in Hong Kong and Macau. The European and American markets are still a difficult point. "Because of the low bargaining power of enterprises, it is still difficult to carry out RMB settlement business in these areas." Huang Fajing believes that this analysis.
Sink Mixers
Our range of Kitchen taps and Sink Mixers are available in a gorgeous choice of designs. Choose from a range of contemporary or traditional Sink Mixer Taps or Kitchen Sink Mixer. For the ultimate flexibility, also take a look at our range of Kitchen Sink Mixers. Our Kitchen taps and Sink Mixers combine exceptional quality design with real value for money. Selected products in the range also include clever flow limiting devices to help save water. Taps with lever handles have also been designed to be easy to use and some of our ranges are suitable for low pressure.
Sink Mixers, Kitchen Sink Mixer, Kitchen Sink Mixer Tap, Single Lever Sink Mixer
ZHEJIANG KINGSIR VALVE CO., LTD. , https://www.kingsir-valves.com