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Chinese export enterprises suffer hair windfall foreign exchange rate shocks

4 consecutive months of falling exports makes the situation about the controversial trend of the RMB exchange rate again.

Yesterday, deputy director of the Policy Research Office of Ministry of Commerce Prince first time at the Institute for Foreign Trade Ministry of Commerce of the thematic meetings on the situation said that at present, most of them at the global currency devaluation, if the yuan pegged to the U.S. dollar alone, then at the U.S. dollar than other currencies Settlement of export, the export exchange rate fluctuations risk.

Exchange rate stability: what currency?

Meeting space, first with the Prince “First Financial Daily” Q & A Journalist quite deep. Our reporter asked him: “So it seems that the current export of stress are not asking for the devaluation of the Renminbi?” He replied: “No! I did not say that the devaluation of that I am talking about (the exchange rate) stability!”

In fact, the Ministry of Commerce for the RMB exchange rate issue has always been to take a steady approach, calling for a stable exchange rate, rather than a simple devaluation. However, a sudden decline in the export situation, making the debate about the RMB exchange rate significantly re-heated. Li Jian, Ministry of Commerce research fellow, told this reporter that encourage exports from the point of view, it is important to change people’s impression that the kind of change will be equivalent to a stable exchange rate pegged to the U.S. dollar exchange rate stability.

“We expect the stability is not pegged to the U.S. dollar’s stability, but a basket of currencies pegged to achieve stability.” Li said, “What is to maintain stability? Are stable against the U.S. dollar, but against the euro, Australian dollar, Japanese yen We are all appreciation. depreciation of those currencies is now faster, then the RMB exchange rate of these currencies is Unstable. ”

Export enterprises affected the exchange rate shock

The current decline in exports, it is easy to make us think that in 1998 during the Asian financial crisis hit China’s export crisis. At that time, the depreciation or appreciation of the RMB are to become parties to the bone of contention. National Development and Reform Commission deputy director of the Institute of Foreign Economic Jiyao completed at the above meeting on yesterday, said that he think the current exchange rate reform is still lagging behind, in 2005 after the reform of RMB exchange rate mechanism and the dollar would like to link, but the reality is also tied up and the dollar together.

Li Jian said that the current dollar-based financial system have been shaken, the U.S. dollar against the emerging economies are weakening influence, so China is now able to take the initiative to seek non-pegged to the U.S. dollar’s exchange rate mechanism reform path.

In reality, enterprises are possible under the financial crisis the exchange rate shocks are a direct feel. Zhejiang International Trade Group Jin Ren Assistant General Manager, told this reporter yesterday that, at present, the international market of exchange rate movements give frequent business caused a lot of risks and uncertainties, particularly in the last year in December and January this year, exports of goods by foreign exchange settlement of the magnitude of price changes, a lot of goods in transit, the corresponding foreign currency exchange rate in a very short few days on the devaluation of 10% ~ 20%, resulting in Chinese enterprises shall very passive node – in accordance with the contract settlement, is clearly a loss . And when large quantities of goods at foreign customs delays due to clearing, the accumulation of Customs confiscated auction, foreign enterprises to buy al-Qaida to 5% ~ 10% of low-priced Chinese goods taken.

“This reality disrupt the normal rhythm of the trade, even if there is Order, enterprise does not dare to take, because the price is expected to have no control.” Ren Kui said.

Balanced intelligence

Industrial Bank funds operations center political commissar, chief economist Lu told reporters recently that if the exchange rate do not adjust, and do not deliberately control on imports for the year very likely the case of single-month deficit. If the second quarter of exports no signs of improvement, when the renminbi exchange rate issue will have to be put on the agenda.

Investment bank foreign exchange trader Liu Dongliang think, the recent depreciation of the renminbi has not yet signs of the market also does not appear on the devaluation. However, he believes that the Central has not ruled out the possibility of any kind.

However, the Chinese People’s University professor of finance at the above meeting up yesterday said that this required a balanced intelligence.

He said that the yuan undervalued some indeed will assist enterprises in the international community to obtain better competitiveness, and ease the stress of the export decline, but other country staring at RMB, if there is devaluation of the yuan of long-term tendency, probably taken by the RMB settlement of bilateral trade disadvantage. Therefore, in practice be able to support foreign trade and exports, and does not affect the expansion of the renminbi at the influence of surrounding areas to find a balance between the goal point, is the need to consider.

Paul Frbiz writes articles about the International trading, providing tips and information about products reviews.He works for http://www.qualitydress.com a useful resource to find products and buyers.

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