Latest News:  
Beijing   Sunny/Cloudy    32 / 19 ℃  City Forecast

Home>>China Business

Yuan settlements gain favor with exporters

By Qiu Quanlin (China Daily)

08:23, June 06, 2012

Two foreigners choose ceramic products at the spring session of the China Import and Export Fair in Guangzhou on April 23, 2012. Guangdong has recorded about 1.1 trillion yuan in cross-border settlement in the Chinese currency over the past three years. [Photo/Xinhua]

A growing number of Chinese exporters expect wider use of the yuan in trade settlements to avoid rising exchange-rate risks, after watching export profits dwindle in recent years.

"We aim to use the yuan in trade settlements with clients. But most buyers from Europe and the United States are unwilling to accept price quotations we offer in yuan," said Tang Lu, a sales manager with Hunan Xianfeng Ceramic Industry Co.

Tang said, transactions settled in yuan currently account for only a small portion of exports for the company, which is based in Liling city, in Hunan province.

During the spring session of the China Import and Export Fair, China's largest trade event held twice a year in Guangzhou, capital of Guangdong province, only a few clients from emerging markets such as Brazil and the Middle East agreed to transactions settled in yuan, Tang said.

Yuan-denominated international trade has grown since China introduced a program using the currency in July 2009 in a number of provinces. The program expanded nationwide last year, when yuan-denominated trade exceeded 2 trillion yuan ($317 billion), sources with the Ministry of Commerce said.

Currently, cross-border yuan clearance is conducted through the Hong Kong and Macao branches of Bank of China, or agency banks of overseas participants.

Transactions using the yuan in cross-border trade reached some 581 billion yuan in the first quarter of this year, up 61 percent year-on-year, according to the ministry.

However, Chinese exporters are still finding it hard to clinch deals in yuan with overseas buyers, especially those from developed markets such as Europe and the US.

"We have to keep our clients by respecting their preference to use the dollar in trade settlement. But you know, the rising exchange rate has made it hard for us to maintain a sustainable profit," said Wang Liyu, a sales manager at Shanghai Toys Import and Export Co.

"Most clients from developed markets show little interest in cross-border yuan settlement in trade," Wang said.

The rising exchange rate, combined with sluggish demand in Europe and the US, has resulted in a downturn in business growth for the Shanghai-based company for the past two years, Wang said.

Liu Jianjun, a spokesman for the China Import and Export Fair, said most sales deals clinched at the fair were settled in dollars.

"We believe that some deals were settled in yuan, which is good for Chinese exporters to avoid exchange-rate risk," Liu said.

The stable value of the yuan is making it a new choice for Chinese exporters and investors as they strengthen their foreign trade and business ties, Li Rongcan, assistant minister of commerce, said at a recent forum on cross-border yuan business held in Guangzhou.

Guangdong, one of the first provinces to implement cross-border settlement in the Chinese currency, has recorded around 1.1 trillion yuan in such international trade and investment deals over the past three years, accounting for 30 percent of the country's total, according to Li Simin, vice-president of the Guangzhou branch of the People's Bank of China.

"Cross-border yuan settlement plays an increasing role in helping Chinese exporters ward off exchange-rate risks and reduce transaction costs," Li said.

The Ministry of Commerce will work closely with bank authorities to optimize the yuan settlement business and simplify supervisory measures to benefit more Chinese exporters, Li said.

"We are also promoting the use of the yuan in international investment settlement, as more and more companies in China and around the world choose to pay and be paid in the currency," Li said.

The China International Payment System, which will handle cross-border yuan payments and boost convertibility of the currency, will be established in one or two years, sources with the central bank said.

The system will make yuan clearance safer and more efficient for cross-border trade and investment settled in the currency, helping to promote wider use of the yuan in international settlements.

Email|Print|Comments(Editor:厉振羽、张洪宇)

Leave your comment0 comments

  1. Name

  

Selections for you


  1. Valuable royal jewelries to shine in Taipei

  2. Partial lunar eclipse observed in Beijing

  3. China Pole Dance Championships kick off

  4. What a beautiful dish

Most Popular

Opinions

  1. SCO is strategic choice for members
  2. Conditions not ripe for farm land privatization
  3. 'Going Global' a win-win game for both sides
  4. China is a strategic and reliable partner
  5. Anti-monopoly push may fail to woo private capital
  6. Real benefits of high trade volume remain elusive
  7. Construction boom could hinder economic growth
  8. Much-needed cooling awaits China
  9. Why is Washington so scared of Confucius?
  10. Chance to peacefuly resolve Iranian nuclear issue

What's happening in China

Jiaolong Deep Sea Post Office opens

  1. Deepening reform of IPO system urgent: CSRC
  2. CSRC:greater efforts to combat insider trading
  3. Chinese economy on course to stabilize in May
  4. Ancient books set record of highest auction price
  5. Boy's case isolated, bird flu outbreak unlikely

China Features

  1. Maritime spat between China and DPRK
  2. The 24 solar terms
  3. High ticket prices, unaffordable landscapes
  4. Huangyan tensions
  5. 2012 Russia-China joint naval exercise

PD Online Data

  1. Spring Festival
  2. Chinese ethnic odyssey
  3. Yangge in Shaanxi
  4. Gaoqiao in Northern China
  5. The drum dance in Ansai