Exchange Rate Fluctuations In This Year'S Survival Portrait Of Foreign Trade Enterprises

The international monetary market is complex and changeable, and the US dollar index is strong. Standing on 100 points, the emerging market currencies have depreciated. The same vehicle has not fluctuated greatly in the cost of raw materials, but the export earnings doubled before and after a year. This is the "positive" result of the exchange rate fluctuations experienced by Wang Rui (alias) company.

Wang Rui is an executive of a listed car company. The export business of the company has made him feel intuitively about the vicissitudes of the exchange rate market this year.

This year, affected by the devaluation of RMB, the company's direct export revenue to Ethiopia has increased by 7 million yuan.

In fact, Wang Rui is just a microcosm of the impact of foreign trade enterprises in the exchange rate fluctuations.

It is an indisputable fact that RMB devaluation is favorable to export. However, as a factor affecting foreign trade, the impact of exchange rate fluctuation should be considered in a global perspective.

Although the renminbi has depreciated against the US dollar, it has appreciated the currencies of many emerging countries including Russia, Brazil, India, Egypt and other countries. The impact of exchange rate on trade is more complicated, which brings many challenges to foreign trade enterprises.

"A car exported to Ethiopia costs about $10 thousand. In August last year, it changed to RMB 62 thousand yuan, excluding raw materials, manufacturing fees, labor costs, and net profit of about 7000 yuan. After 8. 11, the price of raw materials has been basically flat, and the RMB exchange rate has fallen 10% to 6.9 up to now.

Brings good.

The car company sells nearly 1000 units a year in Ethiopia, based on rough estimates. This year's revenue is 7 million yuan more than that of last year.

In addition to Ethiopia, the car company has sales in more than 100 countries including Russia, Brazil, Uruguay and other South America, Middle East and Africa.

According to its semi annual report, the exchange income in the first half of this year was 170 million yuan, a substantial increase of 162 million yuan compared with 8 million in the same period last year, and the net income after the deduction of exchange losses in the first half of the year was as high as 100 million yuan.

According to the calculation of the depreciation rate from last year to the present (10%, 7 gross), the most direct impact of the book is that the US dollar in exchange for the US dollar recovered by export is more than 10%, while the accounts receivable for us dollar settlement is 10% more than that at that time.

However, the contribution of these book revenues to the company did not raise the net profit of the company. Compared with the first half of last year, the profit of the company decreased by 12%. In the three quarter of this year, it dropped by 30% to 180 million.

"The impact of the exchange rate is hard to judge. The devaluation of the renminbi will have an impact on exports, but not necessarily after export, there will be a great deal of revenue, and it depends on the currency of the importing countries."

The total cost of the production of a single car by the car company in Ethiopia is about $14 thousand.

The recent devaluation of Ethiopia has brought pressure on corporate earnings.

Wang Rui told the economic watch that the car was priced at $312 thousand last August according to the $15 thousand price of the car at esse, and in November this year, if it remained at the price, the company had to exchange only $14 thousand for the exchange.

If the same profit is to be maintained, the car will be sold for 333 thousand yuan Bill.

Trade is a two-way market. For Wang Rui, the most ideal situation is that the RMB depreciates against the US dollar while the export country's currency appreciates against the US dollar. The worst case is that the renminbi appreciates against the US dollar while the export country's currency depreciates against the US dollar.

"The trouble is, our currency will appreciate, and the foreign exchange settlement will be reduced. I hope to sell 16 thousand dollars, and if Bill depreciates, for them, the same price will be replaced by the dollar, which will not make ends meet."

The most troublesome situation occurred in 2012-2013 years, when the appreciation period of the RMB was negative for exports. It was at that time that the group set up a working group on exchange rates. Wang Ruizheng was one of the seven members of the group.

The team made some long-term settlement operations, locking costs.

In addition, the local currency is also facing some pressure of devaluation or appreciation for countries with relatively large export volume, such as Russia and Brazil. The working group will also study the corresponding solutions.

Wang Rui feels that the foreign trade business has been getting worse and worse over the past two years.

In the first half of this year, its overseas business income was about 1 billion 700 million yuan, down nearly 40% compared with the same period last year.

The export market of this car company is mostly the third world countries. Affected by the decline of commodities and geopolitical instability, Brazil and Russia's economic downturn, their currency depreciation and foreign exchange reserves have been dragged down. In the past two years, the export of these two countries is also decreasing. Wang Ruitan said, the biggest problem for him is the foreign exchange reserves of these countries, the exports are all settled in US dollars, and their clients are not smooth enough to replace US dollars.

"When exporting the state, it will be graded according to the imported products. The medicines and foodstuffs belong to the first level, and it is very easy to exchange dollars, while the non essential commodities such as automobiles need to line up for foreign exchange."

Taking Ethiopia as an example, our assembly capacity in the local factories still has potential for improvement. But Ethiopia has relatively small reserves of dollars, and there are many restrictions for its subsidiaries to replace US dollars after the expansion of production capacity. Holding Bill is of little use to our company, but increases.

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Carlos from Columbia has been established in China's foreign trade enterprises for 6 years.

Carlos did not have his own factory. His company acted as an intermediary to help them find cheap and good products in China according to the needs of South American customers.

Its sales products are varied, including auto parts, sports products, sofa and so on. As long as customers have needs, Carlos will help them find the best option in China.

In the past ten years, South American foreign trade agency like this has sprung up in China.

Carlos came to China to set up a foreign trade company based on such a judgement that no country in the world is more suitable for foreign trade than China, and no international market offers better business opportunities than China.

Stimulated by massive infrastructure projects, the 2010 import and export trade has rebounded strongly and will be left behind by the weak recovery after the 2008 subprime crisis.

Carlos seized business opportunities, but in the past six years, the market is changing, and the exchange rate is also affecting the lifeblood of foreign trade enterprises.

In June 2010, the central bank announced that it would further promote the exchange rate reform and enhance RMB flexibility. In that year, the exchange rate of RMB against the US dollar was about 6.76, which has appreciated in 2005 and appreciated by 24% in 2005.

Now the value of the renminbi is 6.8 to 6.9 against the US dollar, which is about 10% lower than last year.

"Depreciation is certainly good for us, which means that the price we buy from China is cheaper.

But things are not so simple.

The change of exchange rate should be based on a global perspective.

In China, last year was 6.3, and now it is 6.9, but in the past three years, the depreciation rate of many South American countries is between 25%-40%.

The depreciation of the renminbi helps us balance the losses caused by the depreciation of the South American currency, but this is not enough.

Carlos said.

In the past, the price difference between the PVC hose made in China and the PVC hose made in Brazil was over 35%. However, when the value of Brazil's Real almost depreciated 35%, some former customers in China were more inclined to buy in their own country, and the order of PVC hose bought by Brazil customers from Brazil was sharply reduced.

Though many times the quality of Chinese products is better, the high taxes and fees are not yet available.

Fortunately, however, in the past year, the South American currency has undergone a round of correction, and the exchange rate has gradually stabilized, and the customers have returned to Carlos to place an order.

But Carlos has come across a new problem: the price of raw materials has been rising, pushing prices soaring.

"What is going on is crazy now. Even a small company like me has been rising, and I have been watching the prices every day, and the prices of products have been rising. This has led to the fact that the prices given by Chinese factories are not so competitive, so I have already lost several orders."

Recently, Carlos found that the price of sofa accessories - U sofa nail increased by 10%. This year he exported 5 containers to South America, and the total export volume was around 150 thousand dollars. If metal prices continue to rise, Carlos believes that this product may not even finish 20% this year.

South American countries also have the ability to produce such things. Local companies can also save taxes and pportation fees on local purchases, which is cheaper than buying in China.

For the most exported commodities this year, whether it is profitable or not, Carlos is sure to say "no".

The problem before Carlos is that in the Internet era, information is very pparent. Customers often want you to sell products at factory prices, and their profit points can only be won by quantity. Only when the quantity is large enough, can manufacturers give them.

Discount.

Natural selection and survival of the fittest.

In the face of uncertainties in future sales, Carlos is also looking for changes.

One of them is to set up a branch in Chile.

In Carlos's view, the relationship between Chile and Ecuador and China is closer than that of many other South American countries, and there are more business opportunities for him.

In contrast to Brazil and Chile, Brazil has imposed a high tax on goods imported from China between 35%-50%, while in Chile most of the tariffs on Chinese imports are less than 5%, and a portion of them are tax-free.

On the premise that the world's main economies are more likely to embrace and warm up, and the regional market is more recognized by the local people than the global market, these more open markets will be excavated by Carlos next year.

Another strategy is to form alliances with Chinese factories to deepen their links with Chinese factories in terms of product design, payment methods and logistics services, so that they can understand the needs of South American customers and help them better sell products in China.

Carlos's business is located in Guangzhou, and he has cooperation with sixty or seventy factories in the southern region.

And in his view, like these factories, he must adapt to the changes in the new era.

"Although our profits are declining, we are also trying to find ways to survive."

Tension (alias) is the head of overseas business division of a capital construction enterprise. Its projects involve many fields such as new energy, pportation, real estate and so on.

Since last year, the newly signed contracts for overseas projects have achieved good results and have been laid out in countries such as India and Pakistan.

Projects signed with these countries are useful in both US dollars, euros and local currencies.

Take India's project as an example, the construction settlement will be done by rupee settlement and the supply will be settled in US dollars.

The strengthening of the US dollar means that the support cost of tension at the supplier side is increasing.

In terms of construction settlement, the RMB has continued to strengthen the rupee exchange rate for the past five years, and has remained at the level of 1:5 to 1:6 for 2012-2014 years. In recent two years, the renminbi has appreciated sharply to 1:9 to 1:10.. "In the past, a manager in India was asked to be 50 thousand rupees. Two or three years ago, the exchange rate was about 1:6, equivalent to 8000 yuan.

Later, with the change of exchange rate, the yuan is now about 1:10 yuan to the rupee, or the wages of 50 thousand yuan to India employees. If we convert it into RMB, as long as 5000 yuan, our wages will be doubled. "

This is the tension of exchange rate fluctuations.

The most intuitive impact.

In addition, there has been a great change in project receivables.

"For example, the contract of 10 billion yuan rouble signed at that time was changed to RMB 1 billion 500 million yuan, but after the project was finished, it was found that only 1 billion yuan was left in the project, which made everyone's confidence in this project hit."

However, the impact of this settlement is lagging behind. It takes a year or two to digest the engineering cycle. It usually takes several years, and no one can tell when the exchange rate changes.

Now, tension is pushing forward the construction of the international team of overseas companies. For him, this is a measure of hedging exchange losses.

In addition to the core leadership positions such as CFO and CEO, which are assigned by the Chinese head office, the middle managers and technicians will try their best to recruit locally.

In the first half of this year, the head office conducted statistics on overseas staff and found that almost half of the number of foreign employees abroad.

In addition to recruiting local staff, he also tried to recruit foreign students in China to understand both local culture and overseas working environment.

In terms of means of payment, tension has also begun to promote the payment of mixed currencies. On the one hand, it will reduce the money exchange and earn profits locally, and some of them will pay for local wages and purchase products.

On the other hand, in some Southeast Asian countries, increasing the proportion of RMB settlement will reduce the loss of RMB against the US dollar.

"For us, we do not want to see a huge fluctuation in the exchange rate. We still want to see that the renminbi can be stronger, which is more stable relative to the exchange rate of various countries, so as to reduce exchange losses in infrastructure projects."

More relevant information, pay attention to the world clothing shoes and hats and Internet cafes.