Ministry Of Commerce, Foreign Trade Administration, Brewing External Management Policy Adjustment, Loosening Up Enterprise Capital Chain

A related official of the Ministry of Commerce told reporters that there is still controversy over the issue of relaxing the financing of pre paid goods. "On the one hand, we should consider loosening the capital chain for foreign trade enterprises, and on the other hand we are worried about the problem of hot money inflow".

The official further pointed out that "orders for small and medium-sized enterprises belong to such a category of 100 thousand dollars per single, and now the foreign trade environment is in a downward state. In our research, the most common problem of the enterprise is the shortage of capital chain." If we cancel the loan control of US $100 thousand per unit, the liquidity of enterprises will be improved effectively.

An official of the Guangdong administration of foreign exchange told reporters that "the RMB exchange rate has been relatively stable in recent months. The attitude of the State Administration of foreign exchange has shifted from preventing the influx of international hot money to preventing the massive outflow of capital."

Hot money inflow control steering

An official of the Beijing Municipal Bureau of Commerce confirmed to reporters that "before we have suggested to the Ministry of Commerce many times, the impact of the backlog of funds and the backlog of funds on the capital chain of enterprises is very large, especially in small and medium-sized enterprises, where money is suppressed and funds can not be recycled."

At a meeting of the Ministry of commerce at the beginning of this year, the Zhejiang Provincial Department of foreign trade and economic cooperation also put forward that "the amount of advance payment per unit below 100 thousand dollars is relatively small, which in fact has little effect on hot money, but on the contrary, it has a greater impact on the operation of export enterprises." In response, officials of the Ministry of Commerce responded that they would actively consult with the safe.

Advance payment means that the date of collection is earlier than that stipulated in the contract, or the actual date of collection is earlier than the actual date of export declaration.

When a general export enterprise uses TT (wire transfer method) to collect money in advance, the foreign merchant will remit the advance payment (usually 20%-50%) according to the contract agreement between the two parties, but the payment can only stay in the bank foreign exchange account of the export enterprise, and can not be used for foreign exchange settlement. After the issuance of the goods, the export enterprises can only use the certificates produced by the customs to make settlement.

"Enterprises can not use this prepayment, especially when SMEs are strained in the capital chain, these advance payments are often life-saving money." Zhang Xudong, director of textile export enterprises and Liaoning Zhonghui Industrial Development Co., Ltd., told reporters. Zhang Xudong explained that less than US $100 thousand accounted for a large part of the orders of export enterprises, because even if the list was like $1 million, the customers usually placed the order quarterly.

On the other hand, the expectation of RMB appreciation is also changing.

"RMB has been forecast to rise by 10% during the year, including the international investment institutions such as Goldman Sachs and big Morocco," the official of the Guangdong administration of foreign exchange said. "However, the current situation is quite different from that a few months ago."

At present, in the overseas non capital delivery market (NDF), the depreciation expectation of RMB against the US dollar has already appeared. In October, the NDF quotes for each period were expected to depreciate.

Insiders pointed out that "when the RMB appreciation expectations, all kinds of capital will try to enter and stay in China, including advance payment and deferred payment and other means. The renminbi is expected to depreciate. When capital wants to flow out of China, it will take advance payment and delay in remittance.

Untie enterprise capital chain

According to an official from the Department of foreign trade and economic cooperation of Guangdong Province, "in the 1-9 months of this year, the total export value of the country is 10740 billion US dollars, for example, if the 70% orders are 100 thousand dollars, and 70% of them use 30% of the advance payment, it will involve about 157 billion 900 million dollars in advance payment."

He further pointed out that the significance of the advance payment is not how large the amount is, "because the liquidity of SMEs is generally only around 1 million yuan, and the loosening of advance payment provides the most urgent cash flow for these enterprises, which is very important for the turnover of small and medium-sized enterprises."

After the collapse of the capital chain, the Guangdong provincial Party committee and the provincial government organized relevant departments to carry out urgent investigations.

An official involved in the survey told reporters: "the capital chain of enterprises is very intense. They are unable to borrow money from banks, and they also need to pay the deposit of the account books. Once the customer extends payment or abandoning the bill, these enterprises are often in danger of failure.

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