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Thread: "Made in China" - Developing Trend - Quotations in RMB, not US$

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    Full Member yuemax's Avatar
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    "Made in China" - Developing Trend - Quotations in RMB, not US$

    Hi all,

    Over about the last six months, I've seen it more and more that Chinese suppliers are quoting in RMB, and not US$ anymore. They are hedging their pricing as the US$ slips, and as the RMB gradually strengthens.

    For our caps business, they still quote US$, but give us a weekly updated price on pending samples and orders. Scary how fast the dollar is slipping (I get paid in US$, and every month it's less and less

    Just be aware of this, if you have quotes in $, that on PO time, or final payment time, things might be very different (esp if the quote is older than a few months!).

    Cheers
    Max
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    Ensuring Quality from China: www.TopInspection.com
    Custom Fitted Caps: www.PandadStuff.com

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    AndyD (28-Sep-11)

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    Hi Max , i have a sourcing , QC and logistics partner in Hangzhou China, he is South African living in China for the past 10 years , i think this forum will help as we all experience similar issues from China , Lets hope the Rand stays strong it is good for imports , Cheers Andre

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    Bronze Member robinsonwang's Avatar
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    Quote Originally Posted by yuemax View Post
    Hi all,

    Over about the last six months, I've seen it more and more that Chinese suppliers are quoting in RMB, and not US$ anymore. They are hedging their pricing as the US$ slips, and as the RMB gradually strengthens.

    For our caps business, they still quote US$, but give us a weekly updated price on pending samples and orders. Scary how fast the dollar is slipping (I get paid in US$, and every month it's less and less
    Max
    Would this be a block for you to buy goods from China?

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    Site Caretaker Dave A's Avatar
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    Probably not a block, but certainly a change that's worth being aware of. It's very problematic when a supplier changes prices without any notice, especially when it's unexpected and you've commited to a price to a client already.
    The trouble with opportunity is it normally comes dressed up as work.

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    Full Member yuemax's Avatar
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    Hi DaveA,

    Yes, it really can throw a spanner in the works.

    If you are in it for the long run (importing, that is...), it may be good to register a Hong Kong LTD entity - it edges you that much closer to mainland China's legal system.

    Any and all contracts need to be both in Chinese and English. Chinese courts will not entertain an English only contract. Be sure that the proper people on the supplier side sign and CHOP the contract (not the tea-lady - don't laugh, I've heard of this as a tactic to void contracts!).

    L/C is safe option regarding payment amounts, as the banks are in it from the beginning, and the supplier is bound by this.

    For high-value orders, hedge your currency.

    Cheers
    Max
    --

    Ensuring Quality from China: www.TopInspection.com
    Custom Fitted Caps: www.PandadStuff.com

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    Dave A (14-Oct-11)

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    Diamond Member Blurock's Avatar
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    Changing to RMB is an indication of the closer ties between RSA and China. Not altogether a bad idea as the RMB is more stable and imports with long lead times may not be adversely affected by currency fluctuations. I am told that there is also a 10 - 15% saving on the conversion rate.

    Has any of our importers had experience in this regard?
    Excellence is not a skill; its an attitude...

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    Diamond Member wynn's Avatar
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    For years I have argued that the 'Dollar $' was a paper currency and just because the US was the single largest importer world wide didn't make the dollar allmighty.
    Foreign exchange should be tied to a currency basket, that that should stabalise exchange rates!! just because RMB is stable at the moment doesn't mean it will stay that way.
    "Nobody who has succeeded has not failed along the way"
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    Full Member yuemax's Avatar
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    Quote Originally Posted by wynn View Post
    Foreign exchange should be tied to a currency basket, that that should stabalise exchange rates!! just because RMB is stable at the moment doesn't mean it will stay that way.
    Over the last few months, there has been a gradual "slide" in the RMB - there's no way it'll move dramatically in any given direction - the central government here would not ever allow that, due the impact on manufacturing, and also China's US$ bonds they have been buying.

    I can see them diversifying and buying more EURO's and other currencies.

    Cheers
    Max
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    Ensuring Quality from China: www.TopInspection.com
    Custom Fitted Caps: www.PandadStuff.com

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    Diamond Member wynn's Avatar
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    Quote Originally Posted by yuemax View Post
    Over the last few months, there has been a gradual "slide" in the RMB - there's no way it'll move dramatically in any given direction - the central government here would not ever allow that, due the impact on manufacturing, and also China's US$ bonds they have been buying.

    I can see them diversifying and buying more EURO's and other currencies.

    Cheers
    Max
    In todays M&G
    Chinese whispers
    In mainland China, the Shanghai Composite Index dropped 2.3% to 2 383.49 while the smaller Shenzhen Composite Index lost 2.9% at 1 010.46. The government announced that growth declined to 9.1% in the three months through September, down from 9.5% the previous quarter.
    "Nobody who has succeeded has not failed along the way"
    Arianna Huffington

    Read the first 10% of my books "Didymus" and "The BEAST of BIKO BRIDGE" for free
    You can also read and download 100% free my short stories "A Real Surprise" and "Pieces of Eight" at
    http://www.smashwords.com/books/view/332256

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    Site Caretaker Dave A's Avatar
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    Down to nearly 9% growth - they must be miffed
    The trouble with opportunity is it normally comes dressed up as work.

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