Why Do Wenling Shoe Companies Try To Settle Their Foreign Trade RMB Settlement?

Experts recommend that general enterprises pass

In June last year, the State Council approved the inclusion of Zhejiang Province in the pilot province for cross border trade RMB settlement, Wenling.

RMB settlement in cross-border trade refers to the direct use of RMB settlement in foreign trade and the no longer use of foreign currency, which not only can greatly reduce exchange rate risk, but also greatly enhance enterprise's ability to resist risks and international competitiveness, and is well received by business owners.

Then, after the launch of the new deal, did they taste the benefits of "saving money" for foreign trade enterprises engaged in shoe-making production? Many owners said that literally understanding the RMB as a foreign currency settlement currency could reduce the economic losses caused by the depreciation of the US dollar, but the actual operation was "empty bamboo basket."

In July 14th, the author made a special visit to several foreign trade enterprises in Hengfeng street.

Pilot enterprises: there is still a gap between the new policy and the reality.

The streets of Hengfeng, Wenling, mainly consist of traditional shoemaking, with more than 2000 enterprises and nearly one hundred thousand people.

With the acceleration of the appreciation of RMB, the profit margins of foreign trade enterprises have been severely challenged. Many enterprises have shown that some export contracts are in fashion and profitable, and when foreign exchange is settled, they may be reduced to nothing because of the appreciation of the renminbi.

The street has its own export rights business, and has declined to 19 from more than 30 out of seven or eight years ago.

"In the past two years, because of the impact of rising raw materials, increasing the cost of hiring workers, appreciating the renminbi, and restricting the land elements, our current product profits are also decreasing.

Cross border trade can be settled in RMB. We certainly welcome it. "

Located in the shoe gathering area of Hengfeng, Taizhou Thai River Shoes Co., Ltd. is the first enterprise to apply for cross-border RMB settlement in 19 foreign trade enterprises in Hengfeng. Chairman Wang Jianglin is very optimistic about this new policy.

Wang Jianglin calculated the bill to the author: if the price of shoes signed by the enterprises and foreigners before the financial crisis was 4 dollars and a pair, according to the exchange rate of 1 yuan to 7.78 yuan, then the money on the enterprise account was 31.12 yuan, but when we delivered the goods in two or three months, according to the exchange rate of 1 yuan to 6.82 yuan, the actual amount to us was only 27.28 yuan. The difference between the exchange rate reached 3.84 yuan, that is to say, our profits were less than 3.84 yuan a pair. The larger the quantity, the larger the difference, the smaller the profit space.

"We certainly hope foreigners can use us yuan to settle accounts, but the actual operation is still very difficult. Foreigners are also very smart. When they sign an agreement with us, they still require us to settle in US dollars. We have no way to do that. Enterprises need to survive, workers need to feed, they can only settle in US dollars."

Wang Jianglin said.

Foreign trade enterprises: RMB settlement is relatively stable through foreign trade companies.

Influenced by trade barriers, most foreign trade enterprises in Hengfeng have chosen to export products continuously through the intermediary agency of foreign trade companies.

Wenling xinwanli shoe industry Co., Ltd. is one of them located in xhuang village.

Lin Yungen, general manager of the company, told the author that it is cumbersome for enterprises to apply for cross border trade RMB settlement procedures.

In the past, enterprises concentrated on producing high and middle grade shoes. Customers were brought in through the Canton fair or business people. The materials were also imported from Guangzhou. The cost was relatively high, and high school shoes were required for quality, material and so on. But now the dollar is depreciating, the people's currency is strong, the production orders signed with foreigners are affected by the exchange rate, and there is not much profit left.

"Two or three years ago, when the financial crisis happened, sometimes a pair of shoes lost one or two yuan. Now the high-end shoes are not done. They are pferred to the middle and low grade shoes, and all the export trade is given to foreign trade companies. Although the profits earned are not directly doing business with foreigners, this kind of trade disputes are not only reduced, but also more stable in the settlement of loans."

Lin Yungen said.

Like Xin Wanli Shoes Co., Ltd., after trying to cross border trade RMB settlement failed, Taizhou Tai Jiang Shoes Co., Ltd. also chose to export products through foreign trade companies.

It is understood that in the streets of Hengfeng, in addition to a few foreign trade enterprises set up sales abroad, most of the enterprises with self export rights are exporting their products through the platform of intermediary companies.

Foreign Trade Bureau: foreign products with strong points and competitiveness are suitable for RMB settlement.

Why is this good new deal difficult to promote in many foreign trade enterprises in Hengfeng? The author interviewed Wenling Changhai Ping, a comprehensive science and Technology Bureau of the foreign trade bureau.

He said that Hengfeng shoes belong to the medium and low grade, not the strong products. At present, many parts of the country are in production. Foreigners can choose their customers according to their way of thinking or interest needs. In this way, the depreciation of the US dollar is beneficial to them. If they are settled in RMB, their interests will be lost.

Jiang Haiping said, for the time being, if the enterprises directly set up or competitive products in foreign countries are more suitable for RMB settlement, the fluctuation of the exchange rate of other currencies will not affect the actual income of Chinese manufacturers.

If Taizhou Shilin shoes company has set up sales in Ukraine, their pactions can be directly settled in Renminbi, thereby reducing the intermediate links of the audit. This year, the company has declared cross-border trade RMB settlement.

Speaking of why foreign trade companies are not affected by the exchange rate, Jiang explains that this is mainly a contract signed by foreign trade companies and customers, which means that no matter how many percentage points the US dollar exchange rate falls, the order price of customers will be settled at the exchange rate at that time.

For the introduction of the new deal, Jiang said that the next step will be to increase the publicity of RMB settlement in cross-border trade, so as to enable more enterprises to enjoy the benefits of "saving money".