In the new year, container shortages, container explosions, dumping of containers, and port hopping continue all over the world, and freight rates are also rising crazily. In particular, freight rates on the European-Mediterranean route have skyrocketed. At the same time, the exchange rate has surged, and foreign trade export companies continue to be under pressure!
Onshore RMB against the U.S. dollar closed at 16:30 on January 7 at 6.4567, up 48 points from the previous trading day.
It is worth noting that in 2020, the RMB exchange rate showed a trend of first declining and then rising. At the beginning of last year, affected by the new crown epidemic, the RMB exchange rate fell for a time. As of May 29, the central parity rate of the US dollar against the RMB was at 7.1316, falling below the low since March 2008. But since then, the RMB has started to soar. In 7 months, the RMB has rebounded by more than 7,600 points. At the same time, the U.S. dollar index fell all the way and was still falling during the session.
Export companies “suffered big losses”?
The RMB exchange rate has been fluctuating a lot recently, and those involved in foreign trade are a bit heartbroken. When business was not good, they couldn’t make money. But now that business is good, due to exchange rate fluctuations, they have lost money and made less money. In recent years, it has not been easy to do import and export business. The goods here cannot be shipped, and the funds cannot be returned. After finally sending it out, the RMB is reaching new highs every day, and the meager profits have been greatly lost due to exchange rate changes.
If the offshore RMB rises above the 6.44 mark on the 4th and the lowest price is 6.4362, people who exchanged U.S. dollars earlier may have fainted in the toilet crying. If someone exchanged it half a year ago If you hold US$100,000 so far and exchange it back for RMB, you will lose RMB76,000.
For companies, the impact of RMB appreciation is different. For companies that mainly rely on imported raw materials, RMB appreciation will lead to lower production costs and increased profits; companies engaged in import trade will also benefit from the enhanced purchasing power of RMB and increased import volume.
However, for export enterprises, the relative depreciation of the US dollar will lead to a reduction in sales revenue denominated in RMB during foreign exchange settlement, resulting in exchange losses. Theoretically, the appreciation of the RMB will lead to a decrease in the price competitiveness of export products, further leading to a reduction in orders. However, due to the current serious overseas epidemic situation, many foreign orders have been transferred to China, and the negative impact of this round of RMB appreciation on orders is relatively small.
How will the RMB move in 2021?
Looking forward to 2021, analysts believe that there is still room for appreciation of the RMB exchange rate against the US dollar.
According to the China Securities Journal, Hu Yuexiao, chief macro analyst of Shanghai Securities, believes that based on the internationalization of the RMB and changes in the balance of economic power, the RMB exchange rate trend will be “stable but slightly rising” in the long term. constant. The latest changes in the epidemic have once again increased the importance of China’s economy in the world economic structure, and the appeal of RMB assets to overseas investors has further increased; China’s economic growth will continue to lead the global economy in the next 2-3 years; China is one of the world’s major economies One of the few countries that implements normal monetary policy.
According to China News Network, Liu Ligang, Managing Director of Citibank Research and Chief China Economist, said that the appreciation of the RMB in 2020 will be mainly driven by market forces and that China’s capital market will further open up. , foreign capital’s increased allocation of RMB assets, the gradual widening of interest rate differentials between China and foreign countries, and the weakness of the U.S. dollar index have all supported the rapid appreciation of the RMB this year, and these conditions and phenomena will continue next year. It is expected that the RMB exchange rate will rise to around 6.3 in June 2021, and may rise to around 6 by the end of the year.
Zhu Haibin, chief economist of JPMorgan Chase China, believes that this round of RMB appreciation is driven by China’s economic fundamentals. It is expected that the RMB will still maintain a strong trend in 2021, at least this year. The round of RMB appreciation period will last until the first half of this year. By the end of 2021, the exchange rate of RMB against the US dollar will rise to about 6.25 yuan.
CITIC Securities predicts that the U.S. dollar index will fall below 85 in the third quarter of 2021, the RMB will rise to 6.2 against the U.S. dollar, the U.S. dollar will enter a medium- to long-term depreciation stage, and foreign capital will trend towards increasing allocations to China assets.
Wang Youxin, a researcher at the Bank of China Research Institute, pointed out that the three factors supporting the strengthening of the RMB exchange rate, including domestic and overseas economic recovery performance, monetary policy trends and the trend of the US dollar index, will not change in the short term. China The economy will continue to accelerate its recovery, and monetary policy will gradually shift toward normalization. The U.S. dollar index will continue to maintain a weak trend due to the sluggish economic recovery and loose monetary policy in the United States. Therefore, there is a high probability that the RMB will continue to remain strong in 2021.
Wang Chunying, deputy director and spokesperson of the State Administration of Foreign Exchange, recently pointed out that there are still many uncertainties in the development of the new coronavirus epidemic and the external environment. Financial institutions and enterprises must establish a “risk-based approach”. Awareness of “sexuality” and good management of business risks.
The exchange rate continues to fluctuate, so take good risk control!
Professionals suggest, “Calculate the cost of each order and launch an exchange rate quotation based on the required cost.” The exchange rate has been changing recently, and companies should adjust the price frequency according to the order cycle. , recommend��Set to 1-3 months, and combine the analysis of future exchange rate trends to formulate a price that is more conducive to competition.
In addition, different products have different profits, and different quotation strategies are adopted in different cycles. Use different currency quotes, combining hard currency and soft currency. “Of course, enterprises must maintain exchange control and protect their legitimate interests.
1. Pay attention to international trade risks
Economic globalization has encountered countercurrents and economic and trade frictions have intensified. Based on considerations such as factor costs and trade environment, companies must promptly adjust their industrial layout and global resource allocation.
“In the current external environment of rising trade protectionism, sluggish world economic conditions, and shrinking global markets, we should give full play to the advantages of the domestic ultra-large-scale market, prosper the domestic economy, and unblock the domestic large-scale market. Circulation adds impetus to China’s economic development and drives the world’s economic recovery. “Enterprises must improve the modernization level of industrial and supply chains, vigorously promote technological innovation, accelerate research on key core technologies, and increase domestic share.
2 , Pay attention to the escalation of trade risks
Although the country has issued a series of policies to encourage small, medium and micro enterprises to go global, companies still need to proactively adapt to new trends and changes in foreign trade. Many companies go global. During the process, there are deficiencies in corporate governance, organizational management structure, policy formulation, process management, etc., and due to unfamiliarity with the politics, economy, culture, religion, and laws of the host country, friction with local enterprises, communities, and governments increases. These It is not conducive for enterprises to go global.
When enterprises invest overseas, they must correctly perform domestic legal procedures such as investment project approval, overseas company registration approval, cross-border guarantee registration, and foreign exchange fund registration; It is necessary to conduct corresponding due diligence on the legal environment of the host country to ensure that investment and subsequent business activities comply with local foreign investment regulations and comply with the origin requirements of the exporting country.</p
