DeDollarization Watch: Chinese Businesses Avoid Ruble

21st Century: 卢布宽幅震荡 中企汇率风控谁在套保，谁在裸奔？

“Chinese companies are doing business in Russia. There are two main difficulties. First, the exchange rate fluctuates greatly, and the company lacks the means of hedging. The second is unfamiliar with local laws and regulations.” Recently, the Russian Express CEO CEO Yu Hang accepted 21 Century Economic Report reporter said in an interview. The sharply volatile ruble exchange rate has increased the risk of trade with Russia. Last year, the ruble against the US dollar, in just one month in April, depreciated by nearly 10%. After one year, the depreciation rate is about 20%. It is so difficult to grasp the rhythm that individual companies may even have a "waist" in trade with Russia.

...However, Yu Hang believes that although the cross-border trade between China and Russia has increased by a large margin, the overall scale is still small. The challenge between Sino-Russian trade is in factors such as exchange rate fluctuations with Russia. In recent years, Russia’s exchange rate has been showing wide fluctuations. For large enterprises, there are certain means of hedging, while most SMEs are in a “naked” state. The fluctuation of exchange rate may erode profits in an instant.

"Since the second half of last year, the amount of our denim garments exported to Russia has shrunk dramatically. Now it is basically 100,000 US dollars in shipments per year, which is less than half of that in 2017, mainly due to large exchange rate fluctuations and risk comparison. It is difficult to control. In 2018, the ruble depreciated a lot, especially in April, the ruble fell nearly 10% against the dollar, the ruble fell, leading to a passive increase in the price of exports to local products, affecting sales. In addition, the depreciation of the ruble also affected some The benefits of local import enterprises, individual businesses have difficulties in operating, and the situation of payment in arrears, so we are more cautious about large exports.” On April 16, Guangzhou Xintang a denim apparel manufacturer Chen Ming (a pseudonym) for the 21st century economy The reporter said.