Quoting from [amartha]:


The central bank Wednesday set the yuan's mid-point against the US dollar at 6.8128, with the Chinese currency hitting a new post-revaluation high for a fifth straight day.



Exporters and manufacturers, especially the smaller ones, are groaning under pressure created by the rising yuan, with many of them being forced to shut shop.



What's you condition now? SME?

Reduction in the currency means there is over circulation of the money as compared to the reserves and prior to Nixon's presidency, is pegged to the gold bullion.

• Value of assets become lesser. Real estates, fixed and variable assets.
• Money in the pocket becomes small and lower buying power.
• Returns of low risk and low return stocks, bonds have become negative.
• Consumer price index, which is indicative of inflation rises.
• Imported goods becomes more expensive, and exported goods cheaper.
• Businesses look for short-term gains, due to the drop in future value of the currency.
• Unemployment rates will go up, as companies cash in their assets and buy stocks in other currencies.
• Consumer Cost Index (CPI) will increase, due to more expensive imports.

Quoting from [James 007]:

Quoting from [redlands]:


As a buyer here in Australia I find it difficult to understand the need to quote a price in anything other than RMB. I personaly do not purchase in EURO and see no reason why I should be quoted in a currency from a third country. If needed I can convert RMB to AUD . But to convert EURO to AUD is a hassle as it costs more for me to buy EURO then send via T/T than it does to just send RMB.

Dear Sir,


We have been buying from Chinese suppliers quality hand-held instruments and our supplier has complained about the drop in the US Dollar versus the Yuan.


We suggest they quote in RMB, but there is restrictions by the Chinese Government not to deal with export in RMB. There is no explanation for this Rule, however we also suggested the EURO, and one supplier did quoted in the EURO, but was priced way up compared with other suppliers of the same product from India. So, there is also a threat of loosing the deals to the competitors who continue to quote in US Dollar Currency if you were to switch over to the EURO.


All financial institutions, banks and governments know that the US Dollars have been declining and will be going downhill in the near future, as the signs of recessions and economic lack lustre fills the American bourses.


Watch it over in YOU-TUBE by clicking icon. 


Thank you for reading my post.

Quoting from [Street Smart]:

You are right. The US Dollar will continue to drop, if you buy them, you will lose much money, keep your RMB, which is much stable, with high reserves and strong fundamentals.

I pretty much agree with SS! Be practical! That means, quote in a stable currency (like your own RMB), look for stable clients/customers (I for one don't look for any new business with the US), etc.

Above everything, don't be "traditional"! The US has been THE traditional market for many. Forget about them! There are more than 200 other countries in the world, and many of them are much more stable than the US (if you care to look behind the curtain SS has just pushed to the side for you).

The situation even reminds me of an old saying among salesmen: "Some will, some won't, so what? Next!" That means, if a prospect won't (or can't) buy from you, look for the next prospect. Don't worry, don't whine, just continue! And that's what you have to do now regarding this "new" (in reality, not all that new) situation with the US and its dollar.

Quoting from [Street Smart]:


These are the hard facts, and there are people in high places do not want you to know the facts. Everything seems okay if nothing happens, nobody complains, but then the bubble bursts, first the Internet bubble in 2000, then the NASDAQ bubble and lately the Housing bubble in 2008. Bubble bursts when the dollar is compared with other currencies and to its real value, such as the price of oil, and other commodities, which causes the increase in consumer spendings, like paying US$4 for a gallon of Gasoline. You hear it from people of authority, like the Comptroller of US Government, the G.A.O. David Walker. The tsunami of baby-boom pensioners taking Social Security funds start in January 2008, this is a to the bubble. The other pricks are: the expensive war in Iraq, the Health care subsidiary for medicine and the moving out of industries and businesses to India and China, resulting in loss of jobs.

Click icon to watch this video clip "The Collapse of the Dollar." Folks, pray for the American people, because they are going into poverty, not of their own, but of the mis-management of their country's money. America is in $700 billion trade deficit yearly, and there is $11 trillion dollar overhang. Their war in Iraq costs $3 trillion, and not $50 billion, as calculated by the Nobel prize laureate economist, Dr. Joseph Stiglitz. It is immoral to do this. America has to do something about it before it is too late. $53 tillion to pay interest, and spend less, earn more, restrict imports and cut expenses. "America is mortgaging our future generation, our children and grandchildren, it is immoral"... David Walker.

Quoting from [Deepak Bakso]:

Malaysia has large resources of Natural Gas and Petroleum Oil and is the biggest exporter of palm oil in the world. Historically, Malaysia exports commodities such as rubber and tin, and has been the dominating producer of such commodities till this day.

Speaking of which, the "power" of the US dollar was mostly that a lot of international trade was quoting and paying in dollars. For that they were printing more and more money, selling it for real money to other nations. Now people have begun to quote and pay in alternative currencies, and that is another factor that is sending the dollar downwards.

Despite of what it might look like, the US doesn't have very much value on its own. As an example, out of their population of 300 million, only about ten million are working in their factories. So how much real value could they possibly produce?

Not quoting and paying in dollars anymore is like pulling the carpet from under the legs of the US.

Quoting from [Shrjisheng]:


I think there is a common misconception with Chinese SME's as they do not always get the right information. The Chinese gov't has restricted the open selling of the RMB, not quoting in RMB. We have been dealing with RMB quotes less VAT from our suppliers for 2 years now. It prevents them from fluffing the numbers and protects them against any fluctuations. Of course when we pay, we cannot pay in RMB since we cannot buy it, but we can pay in USD at the current exchange rate on the day of the transfer. Most, if not all banks, can TT the funds in 2 business days and will automatically convert USD (or whatever currency you are paying in) to RMB. A couple of steps to take to be sure there isn't any issue:


1) be sure that your factory agrees to absorb any fluctuation for the between the date you TT and the date they receive it. If necessary, explain to them that you are bearing the 15, 30, 60 days of fluctuation before the TT, so they can help with the 2 days as part of business partnership.

2) find a currency to hedge against the CNY movement. And keep some reserves in these currencies. The SGD has been the most stable in comparison. The Euro, JPY, CAN, AUD all have more depreciation, than appreciation in comparison to the SGD as based on a month to month comparison for the last 3 years.


3) consider paying early to reduce your risk to fluctuation


These are basic guidelines. DO NOT GET A QUOTE IN EURO UNLESS YOUR BUSINESS IS BASED IN EURO. It just doesn't work.


As for the suggestion to make a standard Asian currency, this cannot happen for a long time. The only reason it has worked in Europe is because the countries have all developed to the same position. There is too much disparity between Asian economies to tie them together. An example would the be historic exchange rates for the JPY and NTD. In boom time, as China has seen the last 10 years, a lot of money is going in and the currency gains strength, now, however, the currencies stabilize and the economy goes through a shrinking period before stabilizing. Further, there needs to be a higher level of standardization of the banking practices. It just isn't time for that.

Quoting from [germex]:

I pretty much agree with SS! Be practical! That means, quote in a stable currency (like your own RMB), look for stable clients/customers (I for one don't look for any new business with the US), etc.

Above everything, don't be "traditional"! The US has been THE traditional market for many. Forget about them! There are more than 200 other countries in the world, and many of them are much more stable than the US (if you care to look behind the curtain SS has just pushed to the side for you).

The situation even reminds me of an old saying among salesmen: "Some will, some won't, so what? Next!" That means, if a prospect won't (or can't) buy from you, look for the next prospect. Don't worry, don't whine, just continue! And that's what you have to do now regarding this "new" (in reality, not all that new) situation with the US and its dollar.