Posted On: February 29, 2012
From China Daily USA
BEIJING - Chinese exporters should encourage payment in the yuan, or renminbi, to cut costs, improve efficiency and act as "first movers" for internationalization of the currency, according to a new survey.
Although nine out of 10 Chinese exporters prefer to pay in the national currency, more than 40 percent of them are reluctant to ask their overseas customers to do so, according to the report released by Western Union Business Solutions, part of Western Union Co, on Tuesday.
The convenience of currency conversion and lower exposure to exchange-rate fluctuations are the main reasons why payment in yuan is a better option, said the survey, which was based on telephone interviews with more than 1,000 Chinese exporters.
In early 2011, the People's Bank of China announced a list of exporters to allow them to settle trade in yuan with counterparties globally and enjoy tax rebates.
The list included 67,000 companies, both local Chinese and multinational corporations.
However, "Chinese exporters are afraid to offer such an option, even though it's an easier and less expensive way to settle transactions than using the US dollar or the euro, because they think they will be rebuffed," according to Alfred Nader, vice-president of corporate strategy at Western Union Business Solutions.
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