But they just have limited exposure in yuan so they would rather have dollars,” said Brown. We’ve had discussions about paying in local currency. “Historically they desperately wanted dollars and it has just continued. Some of the thousands of British managers who regularly deal with China say this is due to the difficulty of changing established practices, the Chinese firms’ need for dollars to pay off debt and other international dues and a lack of faith in the current value of the yuan, now in the throes of its second major devaluation since last August. But its visibility in the day-to-day economy in the West is next to nil. “We have tried but there is no appetite,” says Brown, who has 19 years of experience in working closely with Chinese suppliers.įlows among some of the major banks and speculative financial investors have surged, and the yuan is an increasingly heavily used trading currency in Asia. It also jars with the big headlines over the past year proclaiming the emergence of the yuan as a major currency, and London as its main international trading hub. This is a familiar experience for hundreds of small and medium-sized British companies which deal with Chinese factories and firms. He thought using the local currency for the purchases, worth several million pounds every month, would be a selling point with his Asian partners, a sign of good faith and presumably easier to do. A bank clerk counts Chinese yuan banknotes at a branch of Industrial and Commercial Bank of China in Huaibei, Anhui province, June 8, 2012.
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