Composite Fabric,bonded fabric,Lamination Fabric Lamination Fabric News The RMB officially becomes the world currency! Textile partners “laughed” in the middle of the night

The RMB officially becomes the world currency! Textile partners “laughed” in the middle of the night

[168TEX News] On the last day of November 2015, the RMB once again attracted great attention from the market. Exciting news came from Washington on the other side of the ocean – the RMB was successfully &…

[168TEX News] On the last day of November 2015, the RMB once again attracted great attention from the market. Exciting news came from Washington on the other side of the ocean – the RMB was successfully “entered into the basket”. The IMF officially recognizes the renminbi as the world’s major reserve currency, joining the U.S. dollar, euro, yen and pound sterling as the fifth currency in the SDR currency basket. It is understood that SDR is the abbreviation of Special Drawing Right in English. It is allocated by the International Monetary Fund (IMF). It is a unit of account that can be used by the IMF and other international organizations. Its inclusion also means that the RMB It has become a truly world currency.
Textiles and clothing will benefit most from the RMB becoming the world currency
Apart from those who speculate in foreign exchange, foreign trade companies are most concerned about exchange rates. From the continuous appreciation of the RMB in the past few years to the recent continuous depreciation against the US dollar, the fluctuation range of the RMB exchange rate is gradually increasing. For many foreign trade companies, in 2015, the risk of exchange rate fluctuations has gradually become a hurdle that stands in front of them. Among these export-oriented enterprises, textile and garment enterprises undoubtedly account for a considerable proportion. For many textile and apparel companies whose profits have been swallowed up by the foreign exchange settlement process, the export “big red envelope” of RMB becoming the settlement currency will be one of the most direct means to stimulate their performance growth.
In early trading today, the A-share textile and apparel sector was stimulated and agitated. As of 10:30 on the 1st, except for 8 of the 39 stocks in the textile manufacturing sector that were suspended, nearly 22 stocks generally rose. Blum Oriental, Kairuide, Sanfangxiang and other stocks hit the daily limit. Jiaxin Silk, Meizinda, Lutai A, Weike Essence, etc. all rose by more than 3%. The overall increase of the sector reached 1.47%, which was the highest trend in the two cities. One of the strongest sectors.
In RMB settlement, the central bank gave a big red envelope to textile companies
In terms of exports, the use of RMB for settlement is major good news for Chinese export companies, because it not only reduces the exchange rate risks of Chinese export companies, but also greatly reduces exchange costs and simplifies customs clearance and tax refund procedures.
So, specifically in the textile industry, what benefits does using RMB for settlement bring to China’s foreign trade textile companies?
1. Can avoid exchange rate risks

If foreign buyers agree to use RMB for trade settlement, export companies will no longer charge US dollars. Under this circumstance, whether the US dollar appreciates or depreciates, it has little to do with us, and the risk of exchange rate fluctuations does not belong to us. During the economic crisis in the past few years, the exchange rate of the U.S. dollar fluctuated sharply. Foreign trade textile companies were most worried about the rapid depreciation of the U.S. dollars in their hands, so they always hurriedly converted them into RMB as soon as they received the U.S. dollars.
Case: The appreciation of the RMB has affected almost all foreign trade export companies. Because the order is signed first, the old exchange rate is used, and payment is made after the goods arrive. The settlement is based on the new exchange rate. RMB appreciation means shrinking profits. If people’s settlement is used, this problem will be easily solved. Taking a domestic textile manufacturer exporting to Japan as an example, “Customers usually place an order first, such as 100,000 US dollars, and may add an additional part in the mid-term. Stocks are prepared for production according to the order, and the goods are shipped according to the specifications required by the customer. RMB to US dollar The exchange rate ‘dropped’ from 6.22 to 6.4, and the settlement of an order of 100,000 US dollars would have a difference of more than 20,000 yuan. Before the exchange rate fluctuated, I had just settled an exchange of 75,000 US dollars. Who would have thought that after three days, the interest rate would be so low Such a drastic change. We received 15,000 yuan less!”
2. Save exchange costs
As mentioned in the above point, if we collect RMB from foreign buyers, there is one less link to convert US dollars into RMB, which not only reduces the exchange rate loss, but also saves a handling fee, so the overall exchange cost also decreases. . In addition, Chinese companies do not need to use financial instruments to avoid exchange rate risks, and this cost is also saved.
Case: A manager of a trading company is quoted as saying: “Over the years, the RMB has continued to appreciate and the exchange rate has fluctuated greatly. Using US dollars for settlement has greatly increased our exchange rate risks. Yes, many export companies choose some foreign exchange destinations. Financial instruments such as futures trading and hedging are used to avoid exchange rate risks, but the cost of using these financial instruments is also very high. At the same time, using financial instruments requires high professional knowledge, and many small and medium-sized enterprises do not have this awareness and experience. Using RMB Settlement solves this problem very well;”
3. Simplify export customs clearance procedures and reduce customs clearance costs
If you use foreign exchange settlement, each down payment must go through export verification procedures and export tax refund procedures. If RMB is used for settlement, the enterprise no longer needs to submit a write-off form as before, nor does it need to go to the customs to print the foreign exchange certificate copy of the export goods declaration form. Export goods can still enjoy tax refund and tax exemption. Export companies can declare directly in RMB, which greatly simplifies customs declaration procedures and saves customs clearance costs for export companies.
According to the author’s understanding, at present, large-scale Chinese enterprises are mainly used for settlement in RMB. These enterprises often provide more attractive prices and financing to trading partners in exchange for the other parties to settle in RMB, thus eliminating their own exchange rate risks. Now as the renminbi becomes the world currency, ChinaThe proportion of foreign trade denominated in RMB will become higher and higher, and more small and medium-sized Chinese companies will inevitably use RMB for settlement with foreign companies. Therefore, in the foreseeable future, the demand for RMB in the international market will gradually increase, the RMB exchange rate will be supported in the future, and RMB will become one of the most commonly used payment currencies in countries around the world. At present, my country’s textile industry is generally facing diversified challenges such as rising costs, intensified market competition and shortage of funds. The problem of overcapacity has long existed. The international recognition of RMB as the world currency will also create a good competitive environment for the growth of domestic textile enterprises’ export performance.

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Author: clsrich

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