Opportunities and Challenges of Cross—border RMB Settlement Business Brought to Yunnan SMEs.doc

1、1Opportunities and Challenges of Crossborder RMB Settlement Business Brought to Yunnan SMEsAbstract. It is not difficult to see from the records of the current literature， and there was rare discussion about Yunnan SMEs. Perhaps this is related to the degree of regional economic development. With th

2、e continuous expansion of Chinas economic openness， as well as the continuous improvement of the overall economic strength of ASEAN， through the development of the capital market system designed to promote the provinces small and medium enterprises， the immediate question worth to be considered. The

3、 first need for cross-border RMB settlement business is to expand awareness and to deconstruct the opportunities and challenges of Yunnan SME. Key words： Cross-Border RMB Settlement； SMES； Opportunities； Challenge Introduction SMEs play an important role in the development of regional economies in Y

4、unnan， at the same time， with the location advantages of Yunnan Province， inevitably faces the problem of how to enter the ASEAN market in factor endowments conditions 2driven. Practice shows that based on commodity exchange and direct investments on the basis of the strategy of going out， always fa

5、cing the impact of capital market. This influence is mainly in RMB clearing business conduct. Solely on the content of the cross-border RMB settlement seems most important for small and medium enterprises lies in financing the project， which for the implementation of “going out“ strategy is the most

6、 critical. It is easy to see from the records of the current literature， there was rare discussion about Yunnan SMEs. Perhaps this is related to the degree of regional economic development. With the continuous expansion of Chinas economic openness， as well as the continuous improvement of the overal

7、l economic strength of ASEAN， through the development of the capital market system designed to promote the provinces small and medium enterprises， the immediate question worth to be considered. Knowledge of Cross-Border RMB Settlement Business Here， you first need to expand cross-border RMB settleme

8、nt business awareness of opportunities and challenges to deconstruction Yunnan SME awareness. Cross-border trade RMB settlement business connotation. 3Cross-border RMB settlement by countries allows designated qualified enterprises on a voluntary basis to RMB declaration and settled in RMB trade bal

9、ance. Types of business， including import and export letters of credit， collections， remittances （including advances from customers prepayments and cash on delivery） and a variety of billing methods. Popular to speak up， it is a means of payment in foreign trade and investment in RMB. It is the impo

10、rtant start to “going out“ of RMB. The status quo of cross-border trade RMB settlement business. In 2008， the State Council decided to expand the pilot in some areas of trade in goods. April 8， 2009， the State Council executive meeting decided to pilot RMB settlement of cross-border trade in Shangha

11、i， Guangzhou， Shenzhen， Zhuhai， Dongguan， outside the geographical scope is tentatively scheduled for Hong Kong， Macau， and the ten ASEAN countries （Indonesia ， Malaysia， Singapore， Thailand， the Philippines， Vietnam， Laos， Myanmar， Cambodia and Brunei）. On July 2nd， it approved by the State Council

12、， the “cross-border trade RMB settlement pilot management approach“ is officially announced. On July 6th of 2009， cross-border trade RMB settlement pilot was officially launched in Shanghai. In 4April 28th， 2010， the State Council decided to increase the Shandong and other 18 provinces （autonomous r

13、egions and municipalities directly under the Central Government） for the pilot areas， six ministries jointly issued the Ministry of Commerce， General Administration of Customs of the Peoples Bank of China， the Ministry of Finance State Administration of Taxation Bureau of China Banking Regulatory Co

14、mmission notice concerning the enlargement of the issues related to the cross-border trade RMB settlement pilot. At present， Hong Kong is the main the RMB settlement outside except region， since the pilot began proportion has been in more than 50%. The peoples bank announced in November 2003， announ

15、ced to provide clearing arrangements for banks in Hong Kong offering personal RMB business， and subsequently launched RMB business in Macau. February 11， 2010， the Hong Kong Monetary Authority issued a “supervisory principles and operational arrangements of RMB business in Hong Kong interpretation，

16、clear as long as it does not involve the cross-border movement and within the main body of RMB funds in Hong Kong Bank in accordance with local laws and regulations， regulatory requirements and market factors to carry out RMB business. Since the pilot project began in accordance with the data of the

17、 National Bureau of Statistics 5to the end of 2010， 11 banks total of 274.511 billion yuan cross-border trade RMB settlement business. The cumulative domestic agent bank sold 6.354 billion yuan net. It shows that the RMB settlement business outside in the last few years has been the rapid developmen

18、t， is accelerating the pace of reform for the foreseeable future time is bound to RMB settlement business outside the spring. Examine the Financial Needs of Yunnan SMES SMEs as the main body of the market economy， its internal provisions it is bound to the pursuit of enterprise value. Realize it or

19、not， the enterprise value of enterprises inside and outside the two aspects of the role. The inherent requirements of the study SME financing， it is mainly for the corporate environment within the discussion. All in all levels to inspect the following， only. It is reasonable to raise funds to carry

20、out the production preparation. One of the inherent requirements of the corporate finance， it is to enterprise production ready funds. However， along with the market structure， the dynamic evolution of the product marketing system， its own capital stock is difficult to promote the effective function

21、ing of the organization resources. Therefore， the introduction of exogenous funds will 6become an important task in corporate financial management. “Reasonable“ embodies two aspects： （1） the amount of capital stock of exogenous reasonable； （ 2） exogenous capital financing channels with reasonable st

22、ructure. A reasonable allocation of funds for production and sales. After the integration of the internal and external funds through corporate financial management will be faced with the problem of how the rational allocation of funds. Available by Marx total circulation of capital formula to achiev

23、e conditions： From a static perspective， the funds allocation consequential coexists sex， pushing the total funds. To this end， funding constraints produce a reasonable allocation of funds through the financial management， the sale of the inherent requirements of the other financing. Thus， in accord

24、ance with the corporate aspects of the flow of funds， it is divided into such three stages： （1） capital reserve. Funds to prepare， including the introduction of exogenous capital， endogenous financing. （2） The use of funds. The use of the funds includes the use of the whole process of enterprise pro

25、duction， sales. （3） The capital return. Corporate capital after the completion of the commodity functions， capital G （G+ g） the total amount of back to 7business cycle. The three stages of control due to the impact of product market environment， enterprises based on the life cycle of the product mar

26、ket， and always funds configuration. The Opportunity Brought to Yunnan SME According to the above understanding and study of the opportunities brought about by the Yunnan SME from the following summary. Reduce the cost of exports， promote enterprise exports. Many export enterprises in the past in or

27、der to avoid exchange rate risk during the settlement often needed by bank derivatives trading and the use of financial instruments to lock in the exchange rate risk. However， use of these derivative products， such as forward foreign exchange， will produce a small fortune in transaction fees. Direct

28、ly using the RMB as a settlement currency， the enterprises can reduce the cost expenditure. Enterprises no longer need to carry out the currency exchange， also no longer need to use the various types of exchange rate hedging instruments， effectively reduce the settlement cost. According to statistic

29、s， the export enterprises to use RMB settlement can be roughly about 3% to 5% of the cost savings. Export letter of credit， for example， the banks to open letters of credit required to pay 1.5 points， foreign exchange require the 8expenditure of a point， in addition to foreign exchange hedge， but al

30、so separately pay the costs. Corporate trade capital and production funding currency can help enterprises more efficient cash management. The RMB settlement another advantage is to reduce foreign exchange costs of the two enterprises in the course of trade. This is because Chinas neighboring countri

31、es and trade between the region and China， mostly using the U.S. dollar as a settlement currency， its domestic U.S. dollar circulation. Therefore， the settlement is usually twice after the local currency of one U.S. dollar a currency “exchange. One exchange and save costs， you can reduce the use of

32、the yuan for cross-border trade settlement. Reduce the exchange rate risk of foreign trade enterprises. For a long time the traditional pattern of U.S. dollar-denominated businesses is very inconvenient. Not only cumbersome， purchase foreign exchange settlement process is very cumbersome， Also In ad

33、dition to the bank to pay the fees. The past two years， with the continued appreciation of the yuan， increased the risk of exchange rate changes， coupled with exchange costs up to come and go， so some SMEs overburdened. Linked to the U.S. dollar has been abandoned since 2005 RMB， the yuan has been a

34、ccumulated about 9appreciation of 20% appreciation of the RMB relative depreciation of the dollar and the euro makes a large number of export enterprises suffered losses， the exchange rate becomes violently makes a lot of foreign trade enterprises therefore not orders. Aokang Group in Wenzhous expor

35、ts in 2008 is $ 52，000，000， an increase of about 5%， but the exchange rate losses of more than 10 million yuan. Foreign trade enterprises and surrounding areas RMB pilot as an international settlement currency for international settlement of trade partners bear the foreign exchange risk can be large

36、ly eliminated； it is very beneficial for export enterprises. RMB is the local currency of a domestic enterprise. Challenges for Yunnan SME Yunnan SME challenges can be summarized as a greater impact on small profit margins and long single product. SMEs unstable trade relations， smaller profit margin

37、s， companies do not have the bargaining power， general orders the day of the exchange rate settled. Therefore， with the fluctuations of the U.S. dollar， the trade will be a great exchange rate risk. If the exporting country is able to accept RMB settlement， SME export transaction costs and risk will

38、 decline. At the low end of the value chain of low value-added product itself quote 10meager profits， little room. Textile enterprises in Shaoxing， did not adhere to the exchange rate settled by the time of signing the contract， the end of last year， received a total of $ 450，000 orders， not to wait

39、 until 3 months after delivery had shrunk nearly 70，000 yuan. The textile industry has always been a way of saying， for every 1% appreciation of RMB， and corresponding vendors profit will be reduced by 4% to 6%. Labor-intensive textile products， consumer goods and more such a case， for higher-margin

40、 products， the small change of the exchange rate are not the meeting losses. However， some take the high road， the original use of the exchange rate risk prediction mechanism to quoted companies， experts believe that the significance of RMB settlement. “Because these enterprises had had their own ex

41、change rate risk aversion mechanism， less risk of the trade， coupled with products focused on Europe and the United States and other developed countries， to be implemented in these countries， cross-border trade RMB settlement is clearly not so easy.“ In summary， the above will constitute the authors discussion on the theme of the article. Conclusion The current international situation， international