Global buyers reluctant to use yuan but may do so in the future
More than 80 percent of those who participated in a recent Global Sources buyer survey said they are not using the yuan to settle purchases with China makers. Nearly half of them indicated that this is the case because the yuan is not circulated in their home nations.
In countries where the yuan is readily available, other factors limit its use, such as high currency exchange fees (22% of respondents) and being unable to carry out overseas interbank fund transfers (16%). Other buyers were put off by a lack of information in conducting yuan-based transactions.
Although the China government began a yuan trade settlement trial to over 67,000 exporters in December 2010, many manufacturers are reluctant to participate. “Our sources do not quote in yuan, always in the US dollar,” said Douglas Shanks, a US-based buyer of packaging materials and products.
Because of the difficulties in conducting yuan trade settlements, only 9% of respondents indicated they were amenable to this sort of transaction, with 54% saying they would increase sourcing from other countries instead.
However, almost 40% of surveyed buyers said that in the future they would be willing to transact using the China currency. One-third of importers who are willing to use the yuan come from the EU, mainly Ireland, Italy, Germany and Sweden. Another 22% come from the US and 18% from Central and South America.
The Global Sources survey was based on buyer responses from China’s main export markets, mainly the EU and the US. Additional respondents were drawn from Latin America, the Middle East and Asia. In all, 385 buyers from various industries – including electronics, home products, gifts and premiums, garments and textiles, and hardware –were interviewed.
James Jakoplic is a writer for Global Sources, a leading business-to-business media company and facilitator of trade with China. They have experience in all industries, from Electronics to Garments & Textiles.