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The limited number of suppliers in question and not a practical policy makes it difficult for the yuan trading settlement industry for a viable option for export manufacturing in China.
More than a year after the yuan commercial pilot program was launched in settlement life, and very few suppliers are China pricing in local currency.
Producers and buyers are willing to accept payment in yuan. On the part of policymakers to eliminate currencyLosses if the yuan gains against the dollar. For customers of such export is quoted remain stable, regardless of how fast the yuan appreciates.
But the current policy makes it impractical to do for both parties. Companies in China to export the majority of buyers in the United States and the European Union, in which the yuan is not widespread. You can not see how their customers who have already made in U.S. dollars used, first, it would change the yuan, although it is notin their countries of origin. Often customers in South and Southeast Asia, who are willing to make the yuan, but most Chinese manufacturers have some customers in these regions.
Mike Bellamy, Executive Director of Passage Maker and board member of the China Sourcing Information Center, said it could be the countries with most buyers, operations yuan, if individuals are not alone in the house and their company could open an account in yuan. It would bealso help, if not conversion fees are too high.
In addition, HSBC chief economist Qu Hongbin said China for action over the next few months are needed to facilitate offshore yuan of investment. This includes accelerating the development of offshore yuan products, including a deliverable forward market in Hong Kong and a mini-QFII scheme. Unlike the full version of the program, qualified foreign institutional investors, can mini-QFII fund managers in Hong Kong to invest abroadYuan deposits in the stock markets of mainland China.
Qu believes that China must also implement liberal, opening up the domestic market continues to widen the yuan, including access for foreigners to invest. depositors should be able to transfer funds from yuan accounts in their countries of origin.
U.S. dollar transactions dominate
To increase the chances of Yuan, China, the government expandedReporting in June 2010 are at least 1,000 companies in 20 provinces and open to all countries around the world, rather than limiting it to the members of ASEAN. The suppliers have been recording on the basis of their level of export credit and selected the long years of experience.
Despite this movement, most exporters are not yet market transactions in yuan. Consumer electronics manufacturer Konka Group Co. Ltd has few customers in Southeast Asia. International Business Division President Chang Dong believes that it wouldbe difficult to convince buyers outside the region will pay in yuan.
Timely Electronics Ltd. Managing Director Albert Mak said the company asked its customers if they are willing to make the yuan already incorporated in August 2009 when it was in the pilot program. But none of the customers of the mobile phone provider, many of which are in Africa and South America were willing to do so. Early buyers are more willing to increase quoted in U.S. dollars to take over. They believe that theThe rate for the yuan against other currencies will be affected significantly by the policies of the government, making it difficult to project how much the yuan will appreciate over a period of time.
Statistics for 12 months to June 2010 show that total settlements recorded in the Yuan period, only 9 percent or 1.98 billion came from exports. Some of the successes of other industries including telecommunications company ZTE was the first in Shenzhen, Guangdong Province,China Yuan get remittances from Hong Kong about the Bank '.
HSBC and its first UK cross-border transaction processing traffic yuan, a month after the program extended coverage.
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