Local tyrantsThere is a shortage of oilUS dollars,
Transactions and purchases are limited to anywhere.
There is no way out at all costs,
FlowersRMB will relieve the urgent needs.
After the beginning of this year, almost all textile companies, whether they are receiving orders well or not, have made the judgment that foreign trade will decline in 2023. Why will foreign trade get worse?
Because of competition?
There is a voice in the market saying that domestic textile companies are not doing well because of competition from Southeast Asian countries such as Vietnam. This is indeed part of the reason, but it is only part of it.
In fact, Vietnam’s textile exports are not doing well at this stage. Preliminary data from the Information Technology and Statistics Department of Vietnam’s Ministry of Finance and General Administration of Customs show that Vietnam’s textile and clothing exports in January 2023 It was 2.25 billion billion, a year-on-year decrease of 37.6%.
In recent years, it is not that there are no Chinese companies investing and opening factories in Vietnam, but the phenomenon of making a lot of money has not appeared. Instead, they have encountered many things that have never been encountered in China.
Therefore, competition with Southeast Asia may be one reason for the deterioration of foreign trade this year, but it is by no means the main reason.
Both money and no money
A friend who is engaged in foreign trade in Yiwu told the editor that he has received several customers from the Middle East since the beginning of the new year. They have a strong intention to buy goods because the goods are indeed high-quality and low-priced, but they are suffering from the lack of US dollars on hand. This situation is happening more and more.
Countries like Iran and Iraq are rich in oil resources and are not short of money. However, due to US sanctions, the amount of foreign exchange they can use is very limited. The US dollar-settled SWIFT system has become a political tool to some extent, artificially creating a scarcity of US dollars.
In addition, this is also related to the Federal Reserve raising interest rates. After the Federal Reserve raised interest rates, on the one hand, consumers in European and American countries began to tighten their money and their spending power was significantly reduced; on the other hand, some countries needed to consume a large amount of U.S. dollars in order to stabilize their exchange rates. If U.S. dollar reserves cannot withstand it, the result will be an exchange rate collapse. Like Thailand during the financial crisis in 1997, the economy collapsed and the country lost a lot of wealth. In this case, foreign trade merchants will naturally not have many US dollars on hand.
RMB: Internationalization? I was also “forced”
On one side there is demand and on the other side there is overcapacity, but the US dollar, the medium of exchange in the middle, hinders this. What to do if you want the transaction to be completed and everyone to get what they need? Of course, it is to replace the U.S. dollar with a brand new medium.
On the 22nd, the Central Bank of Iraq issued a statement saying that it would allow trade from China to be settled directly in RMB, which caused another stir. . The bank also said in the statement that as part of the plan, it may increase the balance in its renminbi account with Bank of China in the future.
Just like after Huawei was sanctioned, foreign trade companies that have business dealings with China will ask if there are any domestic alternatives for products before cooperation, which in turn promotes the development of domestic manufacturing. As US dollar settlement becomes more and more a political tool, the market becomes more and more concerned about its risks, and the pace of RMB internationalization is also “forced” to take greater and greater steps.
The news about Iraq adopting RMB settlement is 2023 alone. In my impression, this is the fourth time. There are Russia, Saudi Arabia and the Philippines before it.
“Benefiting from” the sanctions and suppression by the United States in various countries around the world, 2022In the first three quarters of 2022, the RMB cross-border payment system (CIPS span>) The amount of RMB payments processed reached 70.63pan>trillion yuan, a year-on-year increase of 21%. In 2023, this number is expected to grow at an extremely exaggerated rate.
Textile companies are ready
Different from U.S. dollar foreign trade, RMB foreign trade is a brand new settlement system, but fortunately it uses local currency, so it is relatively easy for domestic textile workers to change the system. On the other hand, local currency settlement has greatly reduced the costs for textile companies to directly engage in foreign trade, and can save a lot of intermediate links. In a sense, it lowers the threshold for foreign trade, which may be beneficial to textile companies that are interested in expanding overseas markets. This is good news for businesses.
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