First of all for export enterprises, many orders are priced in dollars, so since the foreign exchange reform, the RMB appreciation has been gradually eroding the level of corporate profits. If yuan against the US dollar is down, it will have a positive effect on corporate performance. At the same time, it will greatly increase their own competitiveness.For import businesses, devaluation, obviously, to some extent, improves the corresponding import costs. In order to reduce the corresponding losses, we recommend importing companies to do some corresponding derivative products to avoid exchange rate fluctuations.General Administration Customs released, on August 8th, for the first seven months, China's import and export value reached 13.63 trillion yuan, down 7.3% over last year. Among them, exports 7.75 trillion yuan, a slight decrease of 0.9%; imports 5.88 trillion yuan, down 14.6%; trade surplus 1.87 trillion yuan, expanding 1 times.At that time some scholars believed that in the past few quarters, the yuan against the US dollar remained stable, while the dollar continued strength, other large foreign country currency generally depreciated, China's export performance was dragged down to some extent.In addition to the RMB, the Turkish lira also depreciated, recently, a domestic boiler plant director said, they were negotiating with a Turkish buyer about the boiler exports to Turkey, but due to lira against euro down by nearly 20%, the Turkish buyer decided to buy their own country’s boiler, and Chinese products have price advantage no longer.
(www.chinainout.com)
On September 13, "The Hindu" quoted government sources as saying that India and China has agreed, under the Regional Comprehensive Economic Partnership (RCEP) Agreement framework, tariffs of half the goods in bilateral trade between India and China would be exempted. The government source said that the two countries have agreed on 42.5% of the bilateral trade of goods exempted from customs duties, "No industry hopes Chinese goods into India with zero tariff, so we’re nervous, but it must take such a pragmatic step, because we will also be able to have zero-tariff access to the Chinese market. "The above-mentioned report also said, concerning the specific arrangements for bilateral tariff exemption measures, it would be completed in the tenth round of negotiation of RECP in October this year in Busan, Korea.Regional Comprehensive Economic Partnership Agreement negotiations lasted nearly three years, and made key progress in the Third Ministerial Conference held in Kuala Lumpur in August this year.At the meeting, the participants agreed on the bid patterns of trade in goods, and agreed to strive to complete the substantive negotiations before the end of 2015 and to resolve other technical issues in the year 2016 as soon as possible."The Hindu" argument is that India's Commerce and Industry Ministry has launched consultations with India Industries on which field tariff can open, which needs to be protected, the implementation period of tariff exemptions will be 10 years.The director of Institute of World Economy of Academy of International Trade and Economic Cooperation Liang Yanfen in an interview with Post reporters pointed out that the economic impact of some of the goods exempted from customs duties depends on the specific product category, "it is unlikely to suddenly exempt sensitive product tariff, some categories that has little effect on both may be chosen."Some analysts believed that the tariff reduction would help the goods to enter each other's market. That would have a lot of influence on India. In early May this year, the Federation of Industry and Commerce in India said, China and India signed a free trade agreement, in the short term, it would benefit China, India will be at a disadvantage, because of the high tariff in India. (www.chinainout.com)
World Economic Forum 2015 Annual Meeting of the New Champions (also known as the ninth Summer Davos Forum) will be held from September 9 to 11 in Dalian, China. The Summer Davos Forum is themed by "depicts the new growth blueprint".Premier Li Keqiang attended the 2015 Summer Davos forum and met the entrepreneurs. In his reply to a question raised by entrepreneurs, he noted that RMB doesn’t have the basis of the continued depreciation, the Chinese economy is in a reasonable range, we have more adequate foreign exchange reserves, and surplus in trade in goods is increasing, which indicates that the RMB exchange rate maintains basically stable at a reasonable balanced level.Li said, I would like to explain the fact that since the current government was established, the RMB real effective exchange rate has risen by 15%, due to the sharp decline in the currencies of many countries against the dollar, the trend of the international market led us to adjust the RMB exchange rate quote mechanism. The real effective exchange rate of RMB against the US dollar during this government is still in a relatively substantial growth. Frankly, after the slight pullback of RMB exchange rate, RMB exchange rate has remained stable.Li Keqiang said that we didn’t want to stimulate exports through devaluation of the RMB, which was not in line with the direction of our restructuring, we didn’t want the "currency war" to happen in the world. For example, after the slight pullback in the yuan exchange rate, I have asked the relevant departments and enterprises specializing in export business, they said they wanted to maintain the basic stability of the RMB exchange rate on a reasonable and balanced level. Because if there is a continued devaluation of the market's expectations, he can not get a single commander. How could it do good to China’s export?Li said that, we all know, China's commodity trading accounts for a large proportion, this year 1-8 months, China imported 220 million tons of crude oil, an increase of 10% over last year, soybean imports rose by 7%, imports iron ore was essentially flat with last year’s, more than 600 million tons, but the commodity import prices went down, some fell by 40%, 50%, which also had an impact on us. Tariffs went down, China's fiscal revenue was under pressure, but the price was not that we can decide, imports did not come down, imports declined due to the price reduction, Who should be responsible? I think we could have a discussion. We all know that if the international market commodity prices have rebounded, we could also have more import tariffs, our finance minister here, he would feel happy. Of course, I'm more happy that we can contribute to improving people's livelihood. Meanwhile, PPI will have changes, which benefits corporate profits and the operational efficiency improvement, of course, we need to work together to solve the problem. (www.chinainout.com)
On September 10, 2015 Summer Davos was held in Dalian China. When the new BRICS Development Bank Vice President Leslie Masiduopu was in the interview with Hexun, Leslie said the new development bank would actively cooperate with the Asian investment bank to explore new business models, in addition, the new development bank investment would focus on the energy sector.When it comes to the relations with AIIB, the Masiduopu said AIIB was a very important institution to Asian Development Bank, it’s not been long since their establishment, but their establishment intent was similar, "We are absolutely not in competitive relations, we’ll cooperate in many respects in the future.” He said he has met with the AIIB governor Jin Liqun, the two sides would work together to find faster and more efficient ways in the future, and explore new business models.Masiduopu also said that the new development bank had intention to invest in many areas, but would likely focus on energy, especially clean energy. He believed that the development of clean energy would bring many opportunities to the enterprises in the BRIC countries, therefore, the new development bank would give top priority to the energy investment sector. Besides, the infrastructure investment like road and railway would be carried out. Masiduopu said that the current investment did not yet start, but the new development bank has already looked for and established a number of projects. (www.chinainout.com)
Big news from Davos, China will open the door of domestic foreign exchange market to the foreign central bank, which is another move following China’s central bank’s opening inter-bank bond market to three foreign institutions, Premier Li Keqiang expressed in a speech of Davos.After the Federal Reserve guided to raise interest rates of the dollar, as well as China's central bank announced the yuan central parity adjustment and triggered the global currency turmoil, in the background, the Chinese government made further adjustments on the foreign exchange market.I believe that the move needs to be discussed in four areas:First, the introduced objects are the central banks of other countries. The in the foreign exchange market, the central banks in general, have no strong intention of speculation, and they are likely to hold RMB in the long term, and the move is completely different from opening to speculators, and the move won’t cause greater volatility in currency markets.The second is to further promote the internationalization of RMB. In the past few years, the central bank reached agreements of currency exchange with other countries, and some countries have also established an offshore RMB trading center, but it’s far from the real reserve currency of the RMB, and this time central banks of other countries enters into foreign exchange market, which is indeed a start of internationalization of the RMB. Third, to help stabilize the currency. Under the background of US dollar interest rate raise expectations, Chinese government has taken initiatives to open RMB, which could slow the dollar outflow speed, make US dollar liquidity more stable, prevent the impact of the dollar outflow, and also reduce the central bank’s pressure on the exchange rate stabilization.Fourth, to help drive down long-term domestic interest rates. The offshore dollar enters China, then will be converted into RMB, and will be used to buy long-term government bonds, which will help drive down Treasury rates, as well as undervalue RMB interest rates, in the long run, it can reduce business lending rates, and benefit Chinese real economy.In addition to the above sense, RMB could take global circulation, and then grow into the world's main reserve currency.From the analysis of financial markets, the internationalization of RMB can reduce the long-term interest rates and the cost of corporate loans, while RMB settlement can reduce the exchange costs, boost the real economy, and benefit companies, the stock market or therefore rises sharply. (www.chinainout.com)
达沃斯传来重磅消息，中国将向外国央行打开境内汇市大门了，这是继7月份央行下文对三类外资机构开放银行间债市后的又一举措，李克强总理在达沃斯论坛上发表演讲时做出表示的。在美联储引导美元加息后，以及中国央行宣布调整人民币中间价并引发全球汇市动荡的背景下，中国政府再就汇市开放做进一步的调整，意味儿深长。笔者认为，此举在四个方面需要讨论：一是此次引入的是各国央行。央行进入汇市一般而言，投机性不强，长线持有人民币的可能性较大，与完全向投机者开放汇市不同，此举并不会引起汇市较大波动。二是可以进一步推进人民币国际化。在过去几年，央行与各国达成了人民币与各国货币互换协议，有的国家还建立了离岸人民币交易中心，但是，离真正的把人民币纳入储备货币还有更远的路要走，而此次引入各国央行进入中国汇市，是真正迈开了人民币国际化的步子。三是有助于稳定人民币汇率。在美元加息预期的当下，中国政府采取将人民币开放的举措，可以减缓美元外流速度，甚至因各国央行参与人民币买入而使得国内美元流动性变得更加稳定，防止了美元大幅外流造成的冲击，也减轻了央行维稳汇率的压力。四是有助于压低国内长期利率。境外以美元进入我国后，会兑换成人民币，并买入长期国债，这有助于压低国债利率，同时压低人民币利率，从长远看，可以降低实体企业贷款利率，利多中国实体经济。除上述意义外，人民币借此可以在全球流通，进而成长为全球主要储备货币。从金融市场分析，由于人民币国际化后，直接的效果就是降低了长期利率，降低了企业贷款成本，同时，中国对外贸易由于使用人民币结算，降低了汇兑成本，对实体经济有着显著的提振作用，反映到公司业绩上，存在长期利多，股市或因此大幅上涨。（中国进出口网）Big news from Davos, China will open the door of domestic foreign exchange market to the foreign central bank, which is another move following China’s central bank’s opening inter-bank bond market to three foreign institutions, Premier Li Keqiang expressed in a speech of Davos.After the Federal Reserve guided to raise interest rates of the dollar, as well as China's central bank announced the yuan central parity adjustment and triggered the global currency turmoil, in the background, the Chinese government made further adjustments on the foreign exchange market.I believe that the move needs to be discussed in four areas:First, the introduced objects are the central banks of other countries. The in the foreign exchange market, the central banks in general, have no strong intention of speculation, and they are likely to hold RMB in the long term, and the move is completely different from opening to speculators, and the move won’t cause greater volatility in currency markets.The second is to further promote the internationalization of RMB. In the past few years, the central bank reached agreements of currency exchange with other countries, and some countries have also established an offshore RMB trading center, but it’s far from the real reserve currency of the RMB, and this time central banks of other countries enters into foreign exchange market, which is indeed a start of internationalization of the RMB. Third, to help stabilize the currency. Under the background of US dollar interest rate raise expectations, Chinese government has taken initiatives to open RMB, which could slow the dollar outflow speed, make US dollar liquidity more stable, prevent the impact of the dollar outflow, and also reduce the central bank’s pressure on the exchange rate stabilization.Fourth, to help drive down long-term domestic interest rates. The offshore dollar enters China, then will be converted into RMB, and will be used to buy long-term government bonds, which will help drive down Treasury rates, as well as undervalue RMB interest rates, in the long run, it can reduce business lending rates, and benefit Chinese real economy.In addition to the above sense, RMB could take global circulation, and then grow into the world's main reserve currency.From the analysis of financial markets, the internationalization of RMB can reduce the long-term interest rates and the cost of corporate loans, while RMB settlement can reduce the exchange costs, boost the real economy, and benefit companies, the stock market or therefore rises sharply. (www.chinainout.com)
German 7-month exports and imports rose to a record, indicating that foreign demand remained strong and the German domestic demand was also good, although China's economy slows down.German Federal Statistical Office (FSO) on Tuesday (September 8th) released data showing that 7-month exports monthly growth rate after seasonally adjustment increased by 2.4% to 103.4 billion euros; imports rose by 2.2% to 80.6 billion euros. Both breaks the compiled record in 1991.German’s 7-month import and export data exceeded expectations, economists interviewed by Reuters had forecast 0.7% growth in exports, 0.5% growth in imports. However, economists warned that caution was necessary.In these seven months, before seasonally adjustment, Germany’s exports to euro countries rose by 5.5%, exports to non-euro EU countries grew by 6.9%, exports to non-EU countries increased by 6.4%.Bayerische Landesbank (BayernLB) economist Stefan Kipar said that Germany’s booming trade with the United States, Britain and the euro zone's lowers the negative factors of the weakness in emerging markets and China. He noted that foreign trade and domestic demand is likely to provide the impetus for economic growth in the third quarter.German economic growth slowed early in 2015, but in the second quarter, the economy rebounded slightly to 0.4%, due to the foreign trade. Foreign trade is the traditional factor to promote economy, although in the past two years, private consumption has been the main driving force of economic growth in Germany. (www.chinainout.com)
